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 ********//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 Or

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from to

 Commission File Number 001-34278

 BROADWIND, INC.

 (Exact name of Registrant as specified in its charter)

 Delaware (State of or other jurisdiction of
 incorporation or organization)

 88-0409160 (I.R.S. Employer
 Identification No.)

 3240 S. Central Avenue
 Cicero, Illinois (Address of principal executive offices)

 60804 (Zip code)

 Securities registered pursuant to Section 12 (b) of the Exchange Act:

 Registrant's telephone number, including area code: ( 708) 780-4800

 Title of Class

 Trading Symbol

 Name of Exchange on which Registered

 Common Stock, $0.001 par value

 BWEN

 The Nasdaq Capital Market

 Indicate by check mark whether the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes No

 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No

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

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period to comply with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the Registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes No

 As of June 30, 2023 the aggregate market value of the Registrant's voting common stock held by non-affiliates of the Registrant was approximately $ 66,098,000, based upon the $3.70 per share closing sale price of the Registrant's common stock as reported on the NASDAQ Capital Market. For purposes of this calculation, the Registrant's directors and executive officers and holders of 5% or more of the Registrant's outstanding shares of voting common stock have been assumed to be affiliates, with such affiliates holding an aggregate of 3,536,000 shares of the Registrant's voting common stock on June 30, 2023.

 The number of shares of the Registrant's common stock, par value $0.001, outstanding as of February 29, 2024, was 21,566,364.

 DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the Registrant's Proxy Statement for the Registrant's 2024 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K.

 BROADWIND, INC.

 FORM 10-K

 Page

 ITEM 1.

 BUSINESS

 ITEM 1A.

 RISK FACTORS

 ITEM 1B.

 UNRESOLVED STAFF COMMENTS

 ITEM 1C.

 CYBERSECURITY

 ITEM 2.

 PROPERTIES

 ITEM 3.

 LEGAL PROCEEDINGS

 ITEM 4.

 MINE SAFETY DISCLOSURES

 ITEM 5.

 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 ITEM 6.

 [RESERVED]

 ITEM 7.

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 ITEM 7A.

 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 ITEM 8.

 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 ITEM 9.

 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 ITEM 9A.

 CONTROLS AND PROCEDURES

 ITEM 9B.

 OTHER INFORMATION

 ITEM 9C.

 DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 ITEM 10.

 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 ITEM 11.

 EXECUTIVE COMPENSATION

 ITEM 12.

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 ITEM 13.

 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 ITEM 14.

 PRINCIPAL ACCOUNTANT FEES AND SERVICES

 ITEM 15.

 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 ITEM 16.

 FORM 10-K SUMMARY

 Cautionary Note Regarding Forward-Looking Statements

 This Annual Report on Form 10-K ("Annual Report") contains "forward looking statements"— that is, statements related to future, not past, events—as defined in Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. We have tried to identify forward looking statements by using words such as "anticipate," "believe," "expect," "intend," "will," "should," "may," "plan" and similar expressions, but these words are not the exclusive means of identifying forward looking statements. Forward looking statements include any statement that does not directly relate to a current or historical fact. Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following:(i) the impact of global health concerns on the economies and financial markets and the demand for our products; (ii) state, local and federal regulatory frameworks affecting the industries in which we compete, including the wind energy industry, and the related extension, continuation or renewal of federal tax incentives and grants, including the advanced manufacturing tax credits (which remain subject to further technical guidance and regulations), and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into the United States; (iii) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units; (iv) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow; (v) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary; (vi) our ability to continue to grow our business organically and through acquisitions; (vii) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows; (viii) information technology failures, network disruptions, cybersecurity attacks or breaches in data security; (ix) the sufficiency of our liquidity and alternate sources of funding, if necessary; (x) 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); (xi) the economy and the potential impact it may have on our business, including our customers; (xii) the state of the wind energy market and other energy and industrial markets generally, including the availability of tax credits, and the impact of competition and economic volatility in those markets; (xiii) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (xiv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers; (xv) the effects of the change of administrations in the U.S. federal government; (xvi) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions; (xvii) the potential loss of tax benefits if we experience an "ownership change" under Section 382 of the Internal Revenue Code of 1986, as amended; (xviii) the limited trading market for our securities and the volatility of market price for our securities; (xix) our outstanding indebtedness and its impact on our business activities (including our ability to incur additional debt in the future); and (xx) the impact of future sales of our common stock or securities convertible into our common stock on our stock price. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. We are under no duty to update any of these statements. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results.

 (Dollar amounts are presented in thousands, except per share data and unless otherwise stated)

 ITEM 1. BUSINESS

 As used in this Annual Report, the terms "we," "us," "our," "Broadwind" and the "Company" refer to Broadwind, Inc., a Delaware corporation headquartered in Cicero, Illinois, and its wholly-owned subsidiaries (the "Subsidiaries"). Dollars are presented in thousands unless otherwise stated.

 Business Overview

 Broadwind is a precision manufacturer of structures, equipment and components for clean technology and other specialized applications. We provide technologically advanced high value products to customers with complex systems and stringent quality standards that operate in energy, mining and infrastructure sectors, primarily in the United States of America (the "U.S."). Our capabilities include but are not limited to the following: heavy fabrications, welding, metal rolling, coatings, gear cutting and shaping, gearbox manufacturing and repair, heat treat, assembly, engineering and packaging solutions.

 We were incorporated in 1996 in Nevada as Blackfoot Enterprises, Inc., and through a series of subsequent transactions, became Broadwind Energy, Inc., a Delaware corporation, in 2008. Through acquisitions in 2007 and 2008, we focused on expanding upon our core platform as a wind tower manufacturer, established our Gearing segment, and developed and broadened our industrial fabrications capabilities. In early 2017, we acquired Red Wolf Company, LLC, a kitter and assembler of industrial components primarily supporting the global gas turbine market. In 2020, we rebranded to Broadwind, Inc., a reflection of our diversification progress to date and our continued strategy to expand our product and customer diversification outside of wind energy. Effective with our 2020 rebranding, we renamed certain segments. Our Towers and Heavy Fabrications segment was renamed to Heavy Fabrications and our Process Systems segment was renamed to Industrial Solutions. Our Gearing segment name remained the same.

 We provide large, complex and precision fabrications to customers in a broad range of industrial markets. Our most significant presence is within the U.S. wind energy industry, although we have diversified into other industrial markets in order to improve our capacity utilization, reduce our customer concentration, and reduce our exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, we provide steel towers and repowering adapters primarily to wind turbine manufacturers. Our production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers (1650 tower sections), sufficient to support turbines generating more than 1,100 MW of power. We have expanded our production capabilities and leveraged our 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, oil and gas ("O&G") and other infrastructure markets. We have designed and manufacture a mobile, modular pressure reducing system for the compressed natural gas virtual pipeline market. We manufacture components for buckets, shovels, car bodies, drill masts and other products that support mining and construction markets. In other industrial markets, we provide crane components, pressure vessels, frames and other structures.

 We provide 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. We provide gearbox repair services and have manufactured loose gearing, gearboxes and systems and provided heat treat services for aftermarket and OEM applications for a century. While a significant portion of our business is manufactured to our customer's specifications, we employ design and metallurgical engineers to meet our customer's stringent quality requirements, to improve product performance and reliability and to develop custom products that are integrated into our customer's product offerings.

 We provide supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market. We have recently expanded into the U.S. 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. We leverage 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. We also provide packaging solutions and fabricate panels and sub-assemblies to reduce our customers' costs, improve manufacturing velocity and reliability.

 The following table summarizes the key markets served and product offering of our three segments:

 Segment

 Key Markets Served

 -Wind Power Generation

 -Onshore & Offshore

 -Combined Cycle Natural

 -Surface and Underground Mining

 Oil and Gas Fracking/Drilling

 Gas Power Generation

 -Material Handling

 -Surface and Underground Mining

 -Solar Power Generation

 -Oil and Gas

 -Steel Production

 -Wind Power Generation

 -Construction

 -Infrastructure

 -Infrastructure

 -Wind Power Generation

 -Pulp and Paper

 -Material Handling

 -Marine

 -Waste Processing

 Products

 -Wind Towers/Adaptors

 -Loose Gearing

 -Supply Chain Solutions

 -Industrial Fabrications:

 -Custom Gearboxes

 -Inventory Management

 Mining Components

 -Gearbox Repair

 -Kitting and Assembly

 Crane Components

 -Heat Treat Services

 -Solar Inverter Racks

 Pressure Reducing Systems

 -Solar Powered Shelters/Charging Stations

 Other Frames/Structures

 Pressure Vessels

 Business and Operating Strategy

 We intend to capitalize on the markets for wind energy, gas turbines, O&G, mining, and other industrial verticals in North America by leveraging our core competencies in welding, manufacturing, assembling and kitting. Our strategic objectives include the following:

 Diversify our customer and product line concentrations. In 2023, sales derived from our top five customers represented 65% of total sales and sales into the wind energy industry represented 49% of total sales. This is an improvement as compared to 2019, when our top five customers comprised 79% of total sales and sales in the wind energy industry represented 66% of total sales. To reduce the concentration of our sales, we have focused our product development activities and our sales force on expanding and diversifying our customer base and product lines. We are leveraging existing customer relationships within each of our segments to cross sell our broad portfolio of capabilities. We utilize a stage gate model for new product development, which provides a framework for evaluating opportunities and commercialization. Additionally, we continue to use new customer and product revenues as metrics within our variable executive compensation programs. Our diversification efforts are impacted in part by the end-market demand outlook.

 Improve capacity utilization and broaden our manufacturing capabilities. Subject to labor availability, we have manufacturing capacity available that could support a significant increase in our annual revenues for heavy fabrications, gearing and industrial solutions. We are working to improve our capacity utilization and financial results by leveraging our existing manufacturing capacity and adjusting capacity where we can, in response to changing market conditions. In our Heavy Fabrications segment, we have expanded production capabilities and leveraged our fabrication competencies to support growth in mining, material handling, O&G, infrastructure, and other industrial markets.

 Pursue opportunistic acquisitions as well as organic investments. In addition to existing business and operating strategies, we are endeavoring to identify, and opportunistically execute on, accretive acquisitions and organic investments that will allow us to achieve further growth. Our investment criteria for opportunistic acquisitions as well as organic investments include, among other things, our ability to: improve manufacturing competencies, support our existing capacity utilization strategy, enhance our diversification strategy and/or augment our penetration into renewable markets. Additionally, we are developing new variations of our Pressure Reducing Systems ("PRS") unit which supplies compressed natural gas to regions without established infrastructure as part of the virtual pipeline. We believe that execution of our investment strategy provides significant opportunity to generate stockholder value, through profitable growth and leveraging a significant unrealized economic asset, over $290 million of net operating losses ("NOLs") as of December 31, 2023 which can be used to cover future prospective tax liabilities.

 Streamline front-end processes to operational efficiency. We believe that the proper coordination and integration of the supply chain, consistent use of systems to manage our production activities and "Continuous Improvement" initiatives are key factors that enable high operating efficiencies, increased reliability, better delivery and lower costs. We utilize robust Advanced Product Quality Processes (APQP) to support the introduction of new products. We have developed better supply chain expertise, worked with lean enterprise resources, upgraded and improved systems utilization and invested capital to enhance our operational efficiency and flexibility. We have implemented scheduling software and have expanded our engineering organization to support the growing complexity of our expanded customer base and product lines. We have staffed our operations with Continuous Improvement experts in order to optimize our production processes to increase output, leverage our scale and lower our costs while maintaining product quality.

 SALES AND MARKETING

 We market our heavy fabrications, gearing, and industrial solutions through a direct sales force, supplemented with independent sales agents in certain markets. Our sales and marketing strategy is to develop and maintain long-term relationships with our existing customers, and seek opportunities to expand these relationships across our business units. Our business development team uses market data, including marketing databases, information gathered at industry and trade shows, internet research and website marketing to identify and target new customers.

 CUSTOMERS

 We manufacture products for a variety of customers in the wind energy, O&G, gas turbine, mining, and other industrial markets. Within the wind energy industry, our customer base consists primarily of wind turbine manufacturers who supply end users and wind farm operators with wind turbines, and wind gearbox re-manufacturers who use our replacement gears in their replacement gearboxes. The wind turbine market is very concentrated. According to Wood Mackenzie Power & Renewables 2023 industry data, the top four wind turbine manufacturers comprised approximately 88% of the U.S. market. As a result, although we have historically produced towers for a broad range of wind turbine manufacturers, in any given year a limited number of customers have accounted for the majority of our revenues. Within the O&G and mining industries, our customer base consists of manufacturers of hydraulic fracturing and mud pumps, drilling and production equipment, mining equipment, and off highway vehicles. Within the gas turbine industry, our customers supply end-users with natural gas turbines and after-market replacement and efficiency upgrade packages. Within our other industrial markets served, our customer base includes steel producers, ship builders, and manufacturers of material handling, pulp and paper and other power generation equipment. Sales to GE Renewable Energy represented greater than 10% of our consolidated revenues for the year ended December 31, 2023. Sales to Siemens Gamesa Renewable Energy ("SGRE") and GE Renewable Energy each represented greater than 10% of our consolidated revenues for the year ended December 31, 2022. The loss of one of these customers could have a material adverse effect on our business, results of operation or financial condition. As a result, we have an ongoing initiative to diversify our customer base.

 COMPETITION

 Each of our businesses faces competition from both domestic and international companies. In recent years, the industrial gearing industry has experienced consolidation of producers and acquisitions by strategic buyers in response to strong international competition, although recent tariff and supply chain uncertainties have caused buyers to shift more of their purchases to domestic gear manufacturers.

 Within the wind tower product line of our Heavy Fabrications segment, the largest North American based competitor is Arcosa Inc., which was formerly a Trinity Industries company. Other competitors include C.S. Wind, a South Korean Company, Marmen Industries, a Canadian company, and GRI Renewable Industries, a Spanish company, each of which have production facilities in the U.S. We also face competition from imported towers, although in recent years a number of trade cases have periodically significantly reduced competition from imports.

 Imports from China and Vietnam have declined following a determination by the U.S. International Trade Commission ("USITC") in 2013 that wind towers from those countries were being sold in the U.S. at less than fair value. As a result of the determination, the U.S. Department of Commerce ("USDOC") issued antidumping and countervailing duty orders on imports of wind towers from China and an antidumping duty order on imports of towers from Vietnam. In May 2018, the U.S. Court of Appeals affirmed the decision from the U.S. Court of International Trade and at the same time excluded CS Wind Vietnam from the antidumping order. In April 2019, the USDOC extended the term of these duties for an additional five-year period. Following a renewed surge of tower imports from countries not impacted by existing tariffs, in July 2020, the USDOC issued antidumping and countervailing duty orders on imports of wind towers from Canada, Indonesia, and Vietnam and an antidumping order on imports of towers from Korea. The Indonesia countervailing duty order was later revoked after an appeal to the U.S. Court of International Trade ("CIT"). Then in September 2020, a new trade case was brought before the USDOC and USITC, to assess whether wind towers imported from India, Malaysia, and Spain were being sold in the U.S. at less than fair value. The USDOC and USITC issued affirmative final determinations in all three antidumping (India, Malaysia, and Spain) and two countervailing duty cases (India and Malaysia). The USDOC imposed orders for two cases in August 2021 and the remainder in December 2021. Appeals of several of the USDOC determinations are currently pending at the CIT and the CAFC.

 Within our industrial fabrications product line of our Heavy Fabrications segment, our competitors in a fragmented market include Weldall Manufacturing and AT&F Advanced Metals, along with a large number of other regional competitors. The primary differentiator among fabricators is the range of manufacturing and machining capabilities, including lifting capacity, precision machining, heat treatment capacity and the sophistication of quality systems.

 In our Gearing segment, which is focused on O&G, wind energy, mining and steel markets, we compete with domestic and international manufacturers who produce gears greater than one meter in diameter. Our key competitors include Overton Chicago Gear, Cincinnati Gearing Systems, Milwaukee Gear and Horsburgh & Scott. In addition, we compete with the internal gear manufacturing capacity of relevant equipment manufacturers and face competition from foreign competitors.

 In our Industrial Solutions segment, which is primarily focused on the gas turbine market, we compete with electrical supply distributors. Our key competitors include Gexpro and other small independent companies.

 REGULATION

 Production Tax Credit/Investment Tax Credit

 The most impactful development incentive for our products has been the production tax credit ("PTC") for new wind energy projects, which provides federal income tax credits based on electricity produced from qualifying wind turbines. Legislative support for the PTC has been intermittent since its introduction in 1992, which has caused volatility in the demand for new wind energy projects.

 In December 2020, the Consolidated Appropriations Act of 2021 ("COVID IV"), a $2.3 trillion spending bill that combines a $1.4 trillion omnibus spending bill for federal fiscal year 2021 with $900 billion in stimulus relief for the COVID-19 pandemic was signed into law. As part of COVID IV, the PTC was extended for an additional year, allowing for a 60% credit for projects that start construction by the end of 2021. In order to benefit from the PTC, qualifying projects must either be completed within four years from their start of construction, or the developer must demonstrate that its projects are in continuous construction between start of construction and completion. As a result of COVID IV, the PTC will subsidize wind projects commenced as late as 2021 and completed by 2025, or later if continuous construction can be demonstrated. Included in COVID IV is the addition of a new 30% investment tax credit ("ITC") created for offshore wind projects that start construction by the end of 2025. The provision will retroactively apply to projects that started production in 2016.

 On August 16, 2022, the Inflation Reduction Act ("IRA") was enacted to reduce inflation and promote clean energy in the United States. The IRA modifies and extends the PTC until the later of 2032 or when greenhouse gas emissions have been reduced by 75% compared to 2022. It provides for tax credits up to a maximum of 30%, adjusted for inflation annually, for electricity generated from qualified renewable energy sources where taxpayers meet prevailing wage standards and employ a sufficient proportion of qualified apprentices from registered apprenticeship programs. It also provides a bonus credit for qualifying clean energy production in energy communities.

 The IRA also includes Advanced Manufacturing Production tax credits ("AMP credits") for manufacturers of eligible components, including wind and solar components. Manufacturers qualify for the AMP credits based on the electricity output for each component produced and sold in the US starting in 2023 through 2032. The credit amount varies based on the eligible component, which includes solar components, wind energy components, inverters, qualifying battery components, and critical minerals. Tower manufacturers are eligible for credits of $0.03 per watt for applicable components produced. Manufacturers can elect a direct pay option where they can receive a payment equal to the full value of the tax credits from the Internal Revenue Service anytime during the ten-year period. That election lasts for five years, after which the AMP credits can be used against tax obligations or transferred to third parties in exchange for cash.

 Investment in Infrastructure

 In November 2021, the federal Infrastructure Investment and Jobs Act ("IIJA") was signed into law. The IIJA provides for $548 billion in new infrastructure spending over the next five years and $650 billion in previously allocated funds. The IIJA allocated $62 billion to the Department of Energy for various projects focused on clean energy resources and expanding renewable energy. However the timing of the award of projects funded by the IIJA is uncertain thus the impact on our business is uncertain.

 Occupational Safety and Health Administration

 Our operations are subject to regulation of health and safety matters by the U.S. Occupational Safety and Health Administration. We believe that we take appropriate precautions to protect our employees and third parties from workplace injuries and harmful exposure to materials handled and managed at our facilities. However, claims asserted in the future against the Company for work-related injury or illnesses could increase our costs.

 Environmental

 Our operations are subject to numerous federal, state and local environmental laws and regulations. Although it is our objective to maintain compliance with these laws and regulations, it may not be possible to quantify with certainty the potential impact of actions involving environmental matters, particularly remediation and other compliance efforts that we may undertake in the future.

 BACKLOG

 We sell our towers under either supply agreements or individual purchase orders ("POs"), depending on the size and duration of the purchase commitment. Under the supply agreements, we typically receive a purchase commitment for towers to be delivered in future fiscal quarters, then receive POs on a periodic basis depending upon the customer's forecast of production volume requirements within the contract terms. For our Gearing and Industrial Solutions segments, sales are generally based on individual POs. As of December 31, 2023, the dollar amount of our backlog based on unfulfilled POs and supply agreements was approximately $183 million. This represents a 38% decrease from the backlog at December 31, 2022. Backlog as of December 31, 2023 and 2022 is net of revenue recognized over time as described in Note 2, "Revenues" of our consolidated financial statements.

 SEASONALITY

 The majority of our business is not affected by seasonality.

 EMPLOYEES

 We had 444 U.S.-based employees at December 31, 2023, of which 398 were in manufacturing related functions and 46 were in administrative functions. As of December 31, 2023, approximately 18% of our employees were covered by collective bargaining agreements with local unions in our Cicero, Illinois and Neville Island, Pennsylvania locations. We anticipate that the collective bargaining agreements with our union members will be renewed through contract renegotiation near the contract expiration dates, although there can be no assurance that any such agreements will be concluded. The collective bargaining agreement with the Neville Island union was renegotiated in November 2022 and is expected to remain in effect through October 2026. A four-year collective bargaining agreement in regards to the Cicero, Illinois facility was negotiated in February 2022 and is expected to remain in effect through February 2026. We believe that our relationship with our employees is generally positive. The table below summarizes our employees as of December 31, 2023:

 Number of Employees As of

 Segment

 December 31, 2023

 Corporate

 Total

 RAW MATERIALS

 The primary raw material used in the construction of heavy fabrication and gearing products is steel in the form of plate, bar stock, forgings and castings. The market for tower steel and internal packages has become increasingly globalized. Although we are generally responsible for procurement of the raw materials, our global tower customers often negotiate the prices and terms for purchases, and, through a "directed buy", we purchase under these agreements. We have legal title to the raw materials and pass the raw material cost through to our end customer plus a conversion margin.

 Outside of these directed buys, we operate a multiple supplier sourcing strategy and source our raw materials through various suppliers located throughout the U.S. and abroad. We do not have long term supply agreements with our raw material suppliers, and closely match terms with those of our customers to limit our exposure to commodity price fluctuations. We have made modifications to our supply chain management practices to deal more effectively with potential disruptions arising from these purchasing practices.

 QUALITY CONTROL

 We have a long-standing focus on processes for ensuring the manufacture of high-quality products. To achieve high standards of production and operational quality, we implement strict and extensive quality control and inspections throughout our production processes. We maintain internal quality controls over all core manufacturing processes and carry out quality assurance inspections at the completion of each major manufacturing step to ensure the quality of our products. The manufacturing process at our Gearing segment, for example, involves transforming forged steel into precision gears through cutting, heat treating, testing and finishing. We inspect and test raw materials before they enter the assembly process, retest the raw materials after rough machining, test the functioning of gear teeth and cores after thermal treatment and accuracy test final outputs for compliance with product specifications. We believe our investment in industry leading heat treatment, high precision machining, specialized grinding technologies and cutting-edge welding has contributed to our high product reliability and the consistent performance of our products under varying operating conditions. All of our core operating facilities are ISO 9001:2015 certified. We will continue our efforts to achieve the highest quality standards.

 INFORMATION SYSTEMS

 We utilize standardized information technology systems across all areas of quoting and estimating, enterprise resource planning, materials resource planning, capacity planning and accounting, project execution and financial controls. We provide information technology oversight and support from our corporate headquarters in Cicero, IL. The operational information systems we employ throughout the Company are industry-specific applications that in some cases have been internally developed or modified by the vendor and improved to fit our operations. Our enterprise resource planning software is integrated with our operational information systems wherever possible to deliver relevant and real-time operational data. We believe our information systems provide our people with the tools to execute their individual job function and achieve our strategic initiatives.

 WORKING CAPITAL

 We sell to a broad range of industrial customers. In general, we produce to order rather than to stock. For wind towers, our largest product line, the industry has historically used customized contracts with varying terms and conditions between suppliers and customers, depending on the specific objectives of each party. Our practices mirror this historical industry practice of negotiating agreements on a case- by-case basis. As a result, working capital needs, including levels of accounts receivable ("A/R"), accounts payable ("A/P"), and inventory, can vary significantly from quarter to quarter based on the contractual terms associated with each quarter's sales, such as whether and when we are required to purchase and supply steel to meet our contractual obligations. Customer deposits can vary significantly from quarter to quarter based on customer mix, contractual terms associated with each quarter's sales and the timing impacts associated with customers placing orders for future production. In recent years, our larger customers have increasingly used supplier financing programs, whereby a third-party lender advances customer payments to us net of an interest charge. The combination of customer deposits and supplier financing programs arrangements may significantly reduce our working capital requirements.

 In analyzing our liquidity, an important short-term metric is our use of operating working capital ("OWC") in relation to revenue. OWC is comprised of A/R and inventories, net of A/P and customer deposits. Our OWC at December 31, 2023 was $19,408, or 10% of trailing three months of sales annualized, compared to December 31, 2022, when OWC was $475, or 0.3% of trailing three months of sales annualized. The increase in OWC was driven primarily by higher accounts receivable balances.

 CORPORATE INFORMATION

 Our principal executive office is located at 3240 South Central Avenue, Cicero, IL 60804. Our phone number is (708) 780-4800 and our website address is www.bwen.com.

 OTHER INFORMATION

 On our website at www.bwen.com, we make available under the "Investors" menu selection, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8 K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such reports or amendments are electronically filed with, or furnished to, the Securities and Exchange Commission (the "SEC"). Also, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC.

 From time to time, we also provide additional information about the Company and its activities on the "Investors" section of our website, which we encourage investors to review. The information contained or incorporated on our website is not a part of this document.

 ITEM 1A. RISK FACTORS

 OPERATIONAL RISKS

 We may be unable to keep pace with rapidly changing technology in wind turbine and other industrial component manufacturing.

 The global markets for wind turbines and our other manufactured industrial components are rapidly evolving technologically. Our component manufacturing equipment and technology may not be suited for future generations of products being developed by wind turbine companies. As turbines grow in size, particularly to support the development of offshore windfarms, tower manufacturing becomes more complicated and may require investments in new manufacturing equipment. For example, some wind turbine manufacturers are using wind turbine towers made partially or wholly from concrete instead of steel. Additionally, if we implement emerging technologies such as artificial intelligence and machine learning into our products and services, we may not be able to anticipate vulnerabilities, flaws or security threats resulting from the use of such technology and develop adequate protection measures. To maintain a successful business in our field, we must keep pace with technological developments and the changing standards of our customers and potential customers and meet their constantly evolving demands. If we fail to adequately respond to the technological changes in our industry, make the necessary capital investments or are not suited to provide components for new types of wind turbines, our business, financial condition and operating results may be adversely affected.

 We are substantially dependent on a few significant customers and the ordering levels for our products may vary based on customer needs. Further, we face significant risks associated with changes in our relationship with these significant customers.

 Historically, the majority of our revenues are highly concentrated with a limited number of customers. Some of the markets we serve have a limited number of customers. In 2023, one customer, GE Renewable Energy, accounted for more than 10% of our consolidated revenues, and our five largest customers accounted for 65% of our consolidated revenues. Certain of our customers have periodically expressed their intent to scale back, delay or restructure existing customer agreements, which has led to reduced revenues from these customers and periodic deviations in expected ordering levels. It is possible that this may occur again in the future. Additionally, not all of our customers make purchases every year. As a result, our operating profits and gross margins have historically been negatively affected by significant variability in production levels, which has created production volume inefficiencies in our operations and cost structures. Because of this variability, we believe that comparisons of our operating results in any particular quarterly period may not be a reliable indicator of future performance.

 Additionally, if our relationships with our significant customers should change materially, it could be difficult for us to immediately and profitably replace lost sales in a market with such concentration, which could have a material adverse effect on our operating and financial results. We could be adversely impacted by decreased customer demand for our products due to (i) the impact of current or future economic conditions on our customers, (ii) our customers' loss of market share to their competitors that do not use our products, and (iii) our loss of market share with our customers. We could lose market share with our customers to our competitors or to our customers themselves, should they decide to become more vertically integrated and produce the products that we currently provide.

 In addition, even if our customers continue to do business with us, we could be adversely affected by a number of other potential developments with our customers. For example:

 The inability or failure of our customers to meet their contractual obligations could have a material adverse effect on our business, financial position and results of operations and in the event of a dispute, these customers may have more significant resources than we do, which could result in protracted litigation and the incurrence of material costs.

 Certain customer contracts provide the customer with the opportunity to cancel a substantial portion of its volume obligation by providing us with notice of such election prior to commencement of production. Such contracts generally require the customer to pay a sliding cancellation fee based on how far in advance of commencement of production such notice is provided.

 If we are unable to deliver products to our customers in accordance with an agreed-upon schedule, we may become subject to liquidated damages provisions in certain supply agreements for the period of time we are unable to deliver finished products. Although the liquidated damages provisions are generally capped, they can become significant and may have a negative impact on our profit margins and financial results.

 A material change in payment terms with a significant customer could have a material adverse effect on our short-term cash flows.

 The concentration of our customer base may enable our customers to demand pricing and other terms unfavorable to us and make us more vulnerable to changes in demand by or issues with a given customer.

 Because our industry is capital intensive and we have significant fixed and semi-fixed costs, our profitability is sensitive to changes in volume.

 The property, plants and equipment needed to manufacture products for our customers and provide our processes and solutions can be very expensive. We must spend a substantial amount of capital to purchase and maintain such property, plant and equipment. Although we believe our current cash balance, along with our projected internal cash flows and available financing sources, will provide sufficient cash to support our currently anticipated operating and capital needs, if we are unable to generate sufficient cash to purchase and maintain the property, plant and equipment necessary to operate our business, we may be required to reduce or delay planned capital expenditures or to incur additional indebtedness.

 We face significant risks associated with uncertainties resulting from changes to policies and laws with the periodic changes in the U.S. administration.

 Changes of administration in the U.S. federal government may affect our business in a manner that currently cannot be reliably predicted, especially given the potentially significant changes to various laws and regulations that affect us. These uncertainties may include changes in laws and policies in areas such as corporate taxation, taxation on imports of internationally sourced products, international trade including trade treaties such as the United States-Mexico-Canada Agreement, environmental protection and workplace safety laws, labor and employment law, immigration and health care, which individually or in the aggregate could materially and adversely affect our business, results of operations or financial condition.

 Disruptions in the supply of parts and raw materials, or changes in supplier relations, may negatively impact our operating results.

 We are dependent upon the supply of certain raw materials used in our production process, and these raw materials are exposed to price fluctuations on the open market. Raw material costs for materials such as steel, our primary raw material, have fluctuated significantly and may continue to fluctuate. To reduce price risk caused by market fluctuations, we have generally tried to match raw material purchases to our sales contracts or incorporated price adjustment clauses in our contracts. However, limitations on availability of raw materials or increases in the cost of raw materials (including steel), energy, transportation and other necessary services may impact our operating results if our manufacturing businesses are not able to fully pass on the costs associated with such increases to their respective customers. Alternatively, we will not realize material improvements from any decline in steel prices as the terms of our contracts generally require that we pass these cost savings through to our customers. In addition, we may encounter supplier constraints, be unable to maintain favorable supplier arrangements and relations or be affected by disruptions in the supply chain caused by events such as natural disasters, pandemics, shipping delays, power outages and labor strikes. Additionally, our supply chain has become more global in nature and, thus, more complex from a shipping and logistics perspective. In the event of limitations on availability of raw materials or significant changes in the cost of raw materials, particularly steel, our margins and profitability could be negatively impacted.

 We rely on unionized labor, the loss of which could adversely affect our future success.

 We depend on the services of unionized labor and have collective bargaining agreements with certain of our operations workforce at our Cicero, Illinois and Neville Island, Pennsylvania Gearing facilities. The loss of the services of these and other personnel, whether through terminations, attrition, labor strike or otherwise, or a material change in our collective bargaining agreements, including a significant increase in labor costs, could have a material adverse impact on us and our future profitability. In November 2022, a four-year collective bargaining agreement was ratified by the collective bargaining union in our Neville Island facility and will remain in effect through October 2026. A four-year collective bargaining agreement in regard to the Cicero, Illinois facility was negotiated in February 2022, and is expected to remain in effect through February 2026. Any failure to negotiate and conclude a new collective bargaining agreement with a union when the applicable agreement expires could result in strikes, boycotts, or other labor disruptions. As of December 31, 2023, these collective bargaining units represented approximately 18% of our workforce.

 Our ability to hire and retain qualified personnel at competitive cost could adversely affect our business.

 Many of the products we sell, and related services that we provide require that we have skilled labor in our manufacturing facilities. The availability of labor in the markets in which we operate has declined in recent years and competition for such labor has increased, especially under the economic crises experienced throughout and following the COVID-19 pandemic and current inflationary pressures. A significant increase in wages paid by competitors, both within and outside the energy industry, for such work force could result in insufficient availability of workers or increase our labor costs, or both. In the event prevailing wage rates continue to increase in the markets in which we operate, we may be required to concurrently increase the wages paid to our employees to maintain the quality of our workforce and customer service. If the supply of skilled labor is constrained or our costs of attracting and maintaining a workforce increase, our profit margins could decrease, and our growth potential and brand image could be impaired.

 If our estimates for warranty expenses differ materially from actual claims made, or if we are unable to reasonably estimate future warranty expense for our products, our business and financial results could be adversely affected.

 We provide warranty terms generally ranging between one and five years to our customers depending upon the specific product and terms of the customer agreement. We reserve for warranty claims based on prior experience and estimates made by management based upon a percentage of our sales revenues related to such products. From time to time, customers have submitted warranty claims to us. However, we have a limited history on which to base our warranty estimates for certain of our manufactured products. Our assumptions could materially differ from the actual performance of our products in the future and could exceed the levels against which we have reserved. In some instances, our customers have interpreted the scope and coverage of certain of our warranty provisions differently from our interpretation of such provisions. The expenses associated with remediation activities in the wind energy industry can be substantial, and if we are required to pay such costs in connection with a customer's warranty claim, we could be subject to additional unplanned cash expenditures. If our estimates prove materially incorrect, or if we are required to cover remediation expenses in addition to our regular warranty coverage, we could be required to incur additional expenses and could face a material unplanned cash expenditure, which could adversely affect our business, financial condition and results of operations. Market disruptions and volatility may result in an increased likelihood of our customers asserting warranty or remediation claims in connection with our products that they would not ordinarily assert in a more stable economic environment. In the event of such a claim, we may incur costs if we decide to compensate the affected customer or to engage in litigation with the affected customer regarding the claim. We maintain product liability insurance, but there can be no guarantee that such insurance will be available or adequate to protect against such claims. A successful claim against us could have a material adverse effect on our business.

 Cybersecurity incidents could disrupt our business and result in the compromise of confidential information.

 Our business is at risk from and may be impacted by information security incidents, including attempts to gain unauthorized access to our confidential data and data systems, ransomware, malware, business email compromise, phishing attacks, and other electronic security events. Such incidents can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. They can also result from internal compromises, such as human error, or malicious acts. While we seek to employ measures to prevent, detect, and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber event. Cybersecurity incidents could disrupt our business and compromise confidential information belonging to us and third parties.

 Recent increases in inflation and interest rates in the United States and elsewhere could adversely affect our business.

 We are exposed to fluctuations in inflation and interest rates, which could negatively affect our business, financial condition and results of operations. The United States and other jurisdictions have recently experienced high levels of inflation. If the inflation rate continues to increase, it will likely affect our expenses, including, but not limited to, employee compensation and labor expenses and increased costs for supplies, and we may not be successful in offsetting such cost increases. In addition, historically we have carried a significant amount of variable rate debt which is subject to fluctuations in interest rates. Certain government agencies, including the U.S. Treasury, have previously implemented and may implement policies that have resulted and may continue to result in significantly increased interest rates and borrowing costs. Recent increases in interest rates will result in increased interest expense to the extent we cannot limit our debt balances.

 RISKS RELATED TO OUR INDUSTRIES

 Our financial and operating performance is subject to certain factors out of our control, including the state of the wind energy market in North America.

 Our results of operations (like those of our customers) are subject to general economic conditions, and specifically to the state of the wind energy market. In addition to the state and federal government policies supporting renewable energy described below, the growth and development of the larger wind energy market in North America is subject to a number of factors, including, among other things:

 the availability and cost of financing for the estimated pipeline of wind energy development projects;

 the cost of electricity, which may be affected by a number of factors, including government regulation, power transmission, seasonality, fluctuations in demand, and the cost and availability of fuel, particularly natural gas;

 the cost of raw materials used to make wind turbines, particularly steel;

 the general increase in demand for electricity or "load growth;"

 the costs of competing power sources, including natural gas, nuclear power, solar power and other power sources;

 the development of new power generating technology, advances in existing technology or discovery of power generating natural resources;

 the development of electrical transmission infrastructure;

 state and federal laws and regulations regarding avian protection plans and noise or turbine setback requirements;

 other state and federal laws and regulations, particularly those favoring low carbon energy generation alternatives;

 administrative and legal challenges to proposed wind energy development projects;

 the effects of global climate change such as more frequent or more extreme weather events, changes in temperature and precipitation patterns, changes to ground and surface water and other related phenomena;

 the improvement in efficiency and cost of wind energy, as influenced by advances in turbine design and operating efficiencies; and

 public perception and localized community responses to wind energy projects.

 Consolidation among wind turbine manufacturers could increase our customer concentration and/or disrupt our supply chain relationships.

 Wind turbine manufacturers are among our primary customers. There has been consolidation among these manufacturers, and more consolidation may occur in the future. For example, both Siemens Energy, Inc. and Gamesa Wind US, LLC, were customers for our tower business until early 2017, at which time they merged into SGRE. Customer consolidation may result in pricing pressures, leading to downward pressure on our margins and profits, and may also disrupt our supply chain relationships.

 We face competition from industry participants who may have greater resources than we do.

 Our businesses are subject to risks associated with competition from new or existing industry participants who may have more resources and better access to capital. Certain of our competitors and potential competitors may have substantially greater financial resources, customer support, technical and marketing resources, larger customer bases, longer operating histories, greater name recognition and more established relationships in the industry than we do. Among other things, these industry participants compete with us based upon price, quality, location and available capacity. We cannot be sure that we will have the resources or expertise to compete successfully in the future. We also cannot be sure that we will be able to match cost reductions by our competitors or that we will be able to succeed in the face of current or future competition.

 RISKS RELATED TO OUR CORPORATE STRATEGY

 Our plans for growth and diversification may not be successful, and could result in poor financial performance.

 We continue to seek to strategically diversify and grow the business to improve operational efficiency and meet customer demand. Our diversification efforts into the natural gas turbine power generation, O&G, mining and other industries may require additional investments in personnel, equipment and operational infrastructure. Moreover, although we have historically participated in most of these lines of business, there is no assurance that we will be able to grow our presence in these markets at a rate sufficient to compensate for a potentially weaker wind energy market. If we are unable to further penetrate these markets, our plans to diversify our operations may not be successful and our anticipated future growth may be adversely affected.

 Our growth efforts through increased production levels at existing facilities, acquisitions and continuous improvement activities such as the proper coordination and integration of the supply chain, the consistent use of systems with respect to production activities, the Advanced Product Quality Processes (APQP) to support the introduction of new products, and the hiring of continuous improvement experts to optimize our production processes, will require coordinated efforts across the Company and continued enhancements to our current operating infrastructure. If the cost of making these changes increases or if our efforts are unsuccessful, the Company may not realize anticipated benefits and our future earnings may be adversely affected.

 Our diversification outside of the wind energy market exposes us to business risks associated with the gas turbine, O&G, and mining industries, among others, which may slow our growth or penetration in these markets.

 Although we have experience in the gas turbine, O&G and mining industry markets, these markets have not historically been our primary focus. In further diversifying our business to serve these markets, we face competitors who may have more resources, longer operating histories and more well-established relationships than we do, and we may not be able to successfully or profitably generate additional business opportunities in these industries. Moreover, if we are able to successfully diversify into these markets, our businesses may be exposed to risks associated with these industries, which could adversely affect our future earnings and growth. These risks include, among other things:

 Variability in the prices and relative demand for oil, gas, minerals and other commodities;

 Changes in domestic and global political and economic conditions affecting the O&G and mining industries;

 Changes in technology;

 Changes in the price and availability of alternative fuels and energy sources and changes in energy consumption or supply; and

 Changes in federal, state and local regulations, including, among other regulations, relating to hydraulic fracturing and greenhouse gas emissions.

 If our projections regarding the future market demand for our products are inaccurate, our operating results and our overall business may be adversely affected.

 We have previously made significant capital investments in anticipation of rapid growth in the U.S. wind energy market. However, the growth in the U.S. wind energy market has not kept pace with our expectations when some of these capital investments were made, and there can be no assurance that the U.S. wind energy market will grow and develop in a manner consistent with our expectations, or that we will be able to fill our capacity through the further diversification of our operations. Our internal manufacturing capabilities have required significant upfront capital costs. If market demand for our products does not increase at the pace we have anticipated and align with our manufacturing capacity, we may be unable to offset these costs and achieve economies of scale, and our operating results may continue to be adversely affected by high fixed costs, reduced margins and underutilization of capacity which may prevent us from achieving or maintaining profitability. In light of these considerations, we may be forced to reduce our labor force and production to minimum levels, as was done at certain operating locations in the past, temporarily idle existing capacity or sell to third parties manufacturing capacity that we cannot utilize in the near term, in addition to the steps that we have already taken to adjust our capacity more closely to demand. Alternatively, if we experience rapid increased demand for our products in excess of our estimates, or we reduce our manufacturing capacity, our installed capital equipment and existing workforce may be insufficient to support higher production volumes, which could adversely affect our customer relationships and overall reputation. In addition, we may not be able to expand our workforce and operations in a timely manner, procure adequate resources or locate suitable third-party suppliers to respond effectively to changes in demand for our existing products or to the demand for new products requested by our customers, and our business could be adversely affected. Our ability to meet such excess customer demand could also depend on our ability to raise additional capital and effectively scale our manufacturing operations.

 Additionally, most of our customers do not commit to long-term contracts or firm production schedules, and accordingly, we frequently experience volatile lead-times in customer orders. Additionally, customers may change production quantities or delay production with little advance notice. Therefore, we rely on and plan our production and inventory levels based on our customers' advance orders, commitments and/or forecasts, as well as our internal assessments and forecasts of customer demand. The variations in volume and timing of sales make it difficult to schedule production and optimize utilization of manufacturing capacity. This uncertainty may require us to increase staffing and incur other expenses in order to meet an unexpected increase in customer demand, potentially placing a significant burden on our resources. An inability to respond to such changes in a timely manner may also cause customer dissatisfaction, which may negatively affect our customer relationships.

 Our growth strategies could be ineffective due to the risks of acquisitions and risks relating to integration.

 Our growth strategy includes acquiring complementary businesses. In regards to any other future acquisitions, we could fail to identify, finance or complete suitable acquisitions on acceptable terms and prices, particularly with interest rates at comparatively high levels. Acquisitions and the related integration processes could increase a number of risks, including diversion of operations personnel, financial personnel and management's attention, difficulties in integrating systems and operations, potential loss of key employees and customers of the acquired companies and exposure to unanticipated liabilities. The price we pay for a business may exceed the value realized and we cannot provide any assurance that we will realize the expected synergies and benefits of any acquisitions. Our discovery of, or failure to discover, material issues during due diligence investigations of acquisition targets, either before closing with regard to potential risks of the acquired operations, or after closing with regard to the timely discovery of breaches of representations or warranties, could materially harm our business. Our failure to meet the challenges involved in integrating a new business to realize the anticipated benefits of an acquisition could cause an interruption or loss of momentum in our existing activities and could adversely affect our profitability. Acquisitions also may result in the recording of goodwill and other intangible assets which are subject to potential impairments in the future that could diminish our reported earnings and operating results.

 We are subject to risks associated with proxy contests and other actions of activist stockholders.

 Publicly traded companies have increasingly become subject to campaigns by activist investors advocating corporate actions such as governance changes, financial restructurings, increased borrowings, special dividends, stock repurchases or even sales of assets or entire companies to third parties or the activists themselves. We received a notice dated January 18, 2023 from WM Argyle Fund, LLC ("WM Argyle"), which allegedly owned approximately 1.0% of the Company's outstanding shares at the time of submission, purporting to nominate a slate of six candidates for election as directors at our 2023 Annual Meeting of Stockholders. We did not reach an agreement with WM Argyle in connection with its nomination, and there was a contested election at the Company's 2023 Annual Meeting of Stockholders, in which none of WM Argyle's candidates were elected as directors. The cumulative cost to the Company of responding to the proxy contest was approximately $1.8 million. We value input from all stockholders and remain open to ongoing engagement with our stockholders.

 A proxy contest or related activities on the part of activist stockholders could adversely affect our business for a number of reasons, including, without limitation, the following:

 Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of our Board of Directors (the "Board"), management and our employees;

 Perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, customers and others important to our success, any of which could negatively affect our business and our results of operations and financial condition;

 Action by activist stockholders may be exploited by our competitors, cause concern to our current or potential customers and make it more difficult to attract and retain qualified personnel;

 A successful proxy contest could result in a change in control of our Board, and such an event could subject us to certain contractual obligations under several material agreements, including our existing Amended and Restated 2015 Equity Incentive Plan (as amended, the "2015 EIP"), and underlying award agreements and certain employment agreements;

 If nominees advanced by activist stockholders are elected or appointed to our Board with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans or to realize long-term value from our assets, and this could in turn have an adverse effect on our business and on our results of operations and financial condition; and

 Proxy contests may cause our stock price to experience periods of volatility.

 FINANCIAL RISKS

 We have substantially generated net losses since our inception.

 We have experienced operating losses since inception, except that we were profitable in 2016, 2021, and 2023. We have incurred significant costs in connection with the development of our businesses, and because we have operated at low-capacity utilization in certain facilities, there is no assurance that we will generate sufficient revenues to offset anticipated operating costs. Although we anticipate deriving revenues from the sale of our products, no assurance can be given that these products can be sold on a profitable basis. We cannot give any assurance that we will be able to sustain or increase profitability on a quarterly or annual basis in the future.

 We may continue to incur significant losses in the future for a number of reasons, including other risks described in this Annual Report on Form 10-K, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors.

 We have significant indebtedness and we may incur additional debt in the future. Servicing our indebtedness requires a significant amount of cash, and the terms of our current indebtedness, and the terms of any future indebtedness, may restrict the activities of the Company.

 We have significant indebtedness, including the indebtedness under the 2022 Credit Facility (as defined and further discussed in Note 10 "Debt and Credit Agreements" of our consolidated financial statements). Our debt obligations could potentially have important consequences to us and our investors, including: (1) requiring a substantial portion of our cash flows from operations to make debt service payments or to refinance our indebtedness as it becomes due, making it more difficult for us to satisfy our other priorities and obligations; (2) resulting in higher interest expenses, (3) increasing our vulnerability to general adverse economic and industry conditions; (4) reducing the cash flows available to fund capital expenditures and other corporate purposes and to grow our business; (5) limiting our flexibility in pursuing strategic opportunities or planning for, or reacting to, changes in our business and the industry; (6) placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged; and (7) limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares.

 Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive, regulatory factors, and factors beyond our control. Our cash flow from operations in the future may be insufficient to service our indebtedness, including if our actual cash requirements in the future are greater than expected. If we are unable to generate the necessary cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, incurring new debt or issuing additional equity on terms that may be unfavorable, onerous or highly dilutive. Our ability to refinance our indebtedness or incur new debt will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

 As described in Note 10 "Debt and Credit Agreements" of our consolidated financial statements, the agreements governing our indebtedness contain covenants restricting our operations and limiting our financial flexibility. In addition, some of the agreements governing our indebtedness require that we maintain minimum EBITDA requirements, not exceed a maximum fixed charge coverage ratio and contain certain customary events of default. Our ability to comply with such restrictions and covenants may be affected by various factors, some of which factors may be beyond our control. If we breach any of these restrictions or covenants and do not obtain a waiver from the lenders or holders, as applicable, then, subject to the applicable cure periods and conditions, any outstanding indebtedness could be declared immediately due and payable.

 Our PPP Loans were forgiven, but we may still be subject to audit and any resulting adverse audit financings of non-compliance could result in the repayment of a portion or all of the PPP Loans and may restrict our flexibility in operating our business or otherwise adversely affect our results of operations.

 On April 15, 2020, we received funds under notes and related documents ("PPP Loans") with CIBC Bank, USA under the Paycheck Protection Program (the "PPP"), which was established under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), as amended by the Paycheck Protection Program Flexibility Act of 2020 in response to the COVID-19 pandemic and is administered by the U.S. Small Business Administration (the "SBA"). We received total proceeds of $9,530 from the PPP Loans and made repayments of $379 on May 13, 2020. We used at least 60% of our PPP Loan proceeds to pay for payroll costs and the balance on other eligible qualifying expenses that we believe to be consistent with the PPP.

 During the second quarter of 2021, all of our PPP Loans were forgiven by the SBA. However, the U.S. Department of the Treasury has announced that it will conduct audits for PPP Loans that exceed $2,000 for a period of six years after forgiveness. Should we be audited or reviewed by the U.S. Department of the Treasury or the SBA, such audit or review could result in the diversion of management's time and attention and cause us to incur significant costs. If we were to be audited and receive an adverse outcome in such an audit, we could be required to return the full amount of the PPP Loans and may potentially be subject to civil and criminal fines and penalties. If it is subsequently determined that the PPP Loans must be repaid, we may be required to use a substantial portion of our available cash and/or cash flows from operations to pay interest and principal on the PPP Loans, and any future repayment of such loans, would adversely impact our operations and financial results.

 RISKS RELATED TO OWNING OUR COMMON STOCK

 There is a limited trading market for our securities and the market price of our securities is subject to volatility.

 Our common stock trades on the Nasdaq Capital Market. Historically, we have not had an active trading market for our common stock. The absence of an active trading market increases price volatility and reduces the liquidity of our common stock. The market price and level of trading of our common stock could be subject to wide fluctuations in response to numerous factors, many of which are beyond our control. These factors include, among other things, our limited trading volume, actual or anticipated variations in our operating results and cash flow, the nature and content of our earnings releases, announcements or events that impact our business and the general state of the securities market, as well as general economic, political and market conditions and other factors that may affect our future results. In 2023, the closing price of our common stock varied from a high of $5.92 per share to a low of $1.77 per share. Stockholders may have incurred substantial losses with regard to any investment in our common stock adversely affecting stockholder confidence.

 Limitations on our ability to utilize our NOLs may negatively affect our financial results.

 We may not be able to utilize all of our NOLs. For financial statement presentation, all benefits associated with the NOL carryforwards have been reserved; therefore, this potential asset is not reflected on our balance sheet. To the extent available, we will use any NOL carryforwards to reduce the U.S. corporate income tax liability associated with our operations. However, if we do not achieve sufficient profitability prior to their expiration, we will not be able to fully utilize our NOLs to offset income. Section 382 of the IRC ("Section 382") generally imposes an annual limitation on the amount of NOL carryforwards that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. Our ability to utilize NOL carryforwards and built-in losses may be limited, under Section 382 or otherwise, by our issuance of common stock or by other changes in ownership of our stock. After analyzing Section 382 in 2010, we determined that aggregate changes in our stock ownership had triggered an annual limitation of NOL carryforwards and built-in losses available for utilization to $14,284 per annum. Although this event limited the amount of pre ownership change date NOLs and built- in losses we can utilize annually, it does not preclude us from fully utilizing our current NOL carryforwards prior to their expiration. However, subsequent changes in our stock ownership could further limit our ability to use our NOL carryforwards and our income could be subject to taxation earlier than it would if we were able to use NOL carryforwards and built-in losses without an annual limitation, which could result in lower profits. To address these concerns, in February 2013 we adopted a Section 382 Stockholder Rights Plan, which was subsequently approved by our stockholders and extended in 2016, 2019, and 2022 for additional three-year periods (as amended, the "Rights Plan"), designed to preserve our substantial tax assets associated with NOL carryforwards under Section 382. The Rights Plan is intended to deter any person or group from being or becoming the beneficial owner of 4.9% or more of our common stock and thereby triggering a further limitation of our available NOL carryforwards. See Note 14, "Income Taxes" of our consolidated financial statements for further discussion of our Rights Plan. There can be no assurance that the Rights Plan will be effective in protecting our NOL carryforwards. Additionally, because the Rights Plan subjects any person that acquires 4.9% of our common stock without the Board's permission to significant dilution, it could make it harder for a third party to acquire us without the consent of the Board. In particular, the Rights Plan may deter a third party from completing or even initiating an acquisition of the Company, which may prevent stockholders from realizing a control premium from a potential acquirer, or from otherwise maximizing stockholder value.

 INTELLECTUAL PROPERTY RISKS

 Any failure to protect our customers' intellectual property that we use in the products we manufacture for them could harm our customer relationships and subject us to liability.

 The products we manufacture for our customers often contain our customers' intellectual property, including copyrights, patents, trade secrets and know-how. Our success depends, in part, on our ability to protect our customers' intellectual property. The steps we take to protect our customers' intellectual property may not adequately prevent its disclosure or misappropriation. If we fail to protect our customers' intellectual property, our customer relationships could be harmed and we may experience difficulty in establishing new customer relationships. Additionally, our customers might pursue legal claims against us for any failure to protect their intellectual property, possibly resulting in harm to our reputation and our business, financial condition and operating results.

 We may not be able to protect important intellectual property and we could incur substantial costs defending against claims that our products infringe on the proprietary rights of others.

 Our ability to compete effectively will depend, in part, on our ability to protect our proprietary system level technologies, systems designs and manufacturing processes. While we have attempted to safeguard and maintain our proprietary rights, we do not know whether we have been or will be successful in doing so.

 Further, our competitors may independently develop or patent technologies or processes that are substantially equivalent or superior to ours. If we are found to be infringing third-party patents, we could be required to pay substantial royalties and/or damages, and we do not know whether we will be able to obtain licenses to use such patents on acceptable terms, if at all. Failure to obtain needed licenses could delay or prevent the development, manufacture or sale of our products, and could necessitate the expenditure of significant resources to develop or acquire non infringing intellectual property.

 We may need to pursue lawsuits or legal action in the future to enforce our intellectual property rights and to determine the validity and scope of the proprietary rights of others. Litigation and other proceedings, even if they are successful, are expensive to pursue and time consuming, and we could use a substantial amount of our management and financial resources in either case.

 Confidentiality agreements to which we are party may be breached, and we may not have adequate remedies for any breach. Our trade secrets may also be known without breach of such agreements or may be independently developed by competitors. Our inability to maintain the proprietary nature of our technology and processes could allow our competitors to limit or eliminate any competitive advantages we may have.

 LEGAL, TAX, REGULATORY AND COMPLIANCE RISKS

 The U.S. wind energy industry is significantly impacted by tax and other economic incentives. A significant change in these incentives could significantly impact our results of operations and growth.

 We sell towers to wind turbine manufacturers who supply wind energy generation facilities. The U.S. wind energy industry is significantly impacted by federal tax incentives and state Renewable Portfolio Standards ("RPSs"). Despite recent reductions in the cost of wind energy, due to variability in wind quality and consistency, and other regional differences, wind energy may not be economically viable in certain parts of the country absent such incentives. These programs have provided material incentives to develop wind energy generation facilities and thereby impact the demand for our products. The increased demand for our products that generally results from the credits and incentives could be impacted by the expiration or curtailment of these programs.

 One such federal government program, the PTC, provides a supplemental payment based on electricity produced from each qualifying wind turbine. Legislative support for the PTC has been intermittent since its introduction in 1992, which has caused volatility in the demand for new wind energy projects. In 2015, the PTC was extended for a five-year period, with a time-based phase-out depending on the year the wind project is commenced. The phase-out schedule legislated in 2015 provided for: 100% extension of the credit for projects commenced before the end of 2016, 80% extension of the credit for projects commenced in 2017, 60% extension of the credit for projects commenced in 2018 and 40% extension of the credit for projects commenced in 2019. As part of a year-end tax extenders bill in 2019, the PTC was extended for an additional year, allowing for a 60% extension of the credit for projects commenced before the end of 2020.

 On December 27, 2020, COVID IV was signed into law. As part of COVID IV, the PTC was extended for an additional year, allowing for a 60% credit for projects that start construction by the end of 2021. In order to benefit from the PTC, qualifying projects must either be completed within four years from their start of construction, or the developer must demonstrate that its projects are in continuous construction between start of construction and completion. As a result of COVID IV, the PTC will subsidize wind projects commenced as late as 2021 and completed by 2025, or later if continuous construction can be demonstrated. The PTC tax benefits are available for the first ten years of operation of a wind energy facility, and also applies to significant redevelopment of existing wind energy facilities. Included in COVID IV is the addition of a new 30% ITC created for offshore wind projects that start construction by the end of 2025. The provision will be retroactively applied to projects that started production in 2016.

 On August 16, 2022, the IRA was enacted to reduce inflation and promote clean energy in the United States. The IRA modifies and extends the PTC until the later of 2032 or when greenhouse gas emissions have been reduced by 75% compared to 2022. It provides for tax credits up to a maximum of 30%, adjusted for inflation annually, for electricity generated from qualified renewable energy sources where taxpayers meet prevailing wage standards and employ a sufficient proportion of qualified apprentices from registered apprenticeship programs. It also provides a bonus credit for qualifying clean energy production in energy communities.

 The IRA also includes AMP credits for manufacturers of eligible components, including wind and solar components. Manufacturers qualify for the AMP credits based on the electricity output for each component produced and sold in the US starting in 2023 through 2032. The credit amount varies based on the eligible component, which includes solar components, wind energy components, inverters, qualifying battery components, and critical minerals. Tower manufacturers are eligible for credits of $0.03 per watt for applicable components produced. Manufacturers can elect a direct pay option where they can receive a payment equal to the full value of the tax credits from the Internal Revenue Service anytime during the ten-year period. That election lasts for five years, after which the AMP credits can be used against tax obligations or transferred to third parties in exchange for cash. We expect certain financial benefits as a result of tax incentives provided by the IRA. If these expected financial benefits vary significantly from our assumptions, our business, financial condition, and results of operations could be adversely affected. Any modifications to the law or its effects arising, for example, through (i) technical guidance and regulations from the IRS and U.S. Treasury Department, (ii) subsequent amendments to or interpretations of the law, and/or iii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, could result in material adverse changes to the benefits we have recognized and expect to recognize.

 RPSs generally require or encourage state regulated electric utilities to supply a certain proportion of electricity from renewable energy sources or to devote a certain portion of their plant capacity to renewable energy generation. Typically, utilities comply with such standards by qualifying for renewable energy credits evidencing the share of electricity that was produced from renewable sources. Under many state standards, these renewable energy credits can be unbundled from their associated energy and traded in a market system, allowing generators with insufficient credits to meet their applicable state mandate. These standards have spurred significant growth in the wind energy industry and a corresponding increase in the demand for our products. Currently, the majority of states have RPSs in place and certain states have voluntary utility commitments to supply a specific percentage of their electricity from renewable sources. The enactment of RPSs in additional states or any changes to existing RPSs (including changes due to the failure to extend or renew the federal incentives described above), or the enactment of a federal RPS or imposition of other greenhouse gas regulations, may impact the demand for our products. We cannot assure that government support for renewable energy will continue including any assurance regarding the adoption of any of the clean energy provisions of President Biden's Build Back Better agenda. The elimination of, or reduction in, state or federal government policies that support renewable energy could have a material adverse impact on our business, results of operations, financial performance and future development efforts.

 Changes to trade regulation, quotas, duties or tariffs, and sanctions caused by changing U.S. and geopolitical policies, may impact our competitive position or adversely impact our margins.

 Tariffs have resulted in increased prices, including with respect to certain steel products, and could adversely affect our consolidated results of operations, financial position and cash flows. These tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S. or other countries, could result in further increased prices and a decreased available supply of steel and other imported components and inputs. We may not be able to pass price increases on to our customers and may not be able to secure adequate alternative sources of steel on a timely basis.

 The existence of government subsidies available to our competitors in certain countries may affect our ability to compete on a price basis. Imports from China and Vietnam have declined following a determination by the U.S. International Trade Commission ("USITC") in 2013 that wind towers from those countries were being sold in the U.S. at less than fair value. As a result of the determination, the U.S. Department of Commerce ("USDOC") issued antidumping and countervailing duty orders on imports of wind towers from China and an antidumping duty order on imports of towers from Vietnam. In May 2018, the U.S. Court of Appeals affirmed the decision from the U.S. Court of International Trade and at the same time excluded CS Wind Vietnam from the antidumping order. In April 2019, the USDOC extended the term of these duties for an additional five-year period. Following a renewed surge of tower imports from countries not impacted by existing tariffs, in July 2020, the USDOC issued antidumping and countervailing duty orders on imports of wind towers from Canada, Indonesia, and Vietnam and an antidumping order on imports of towers from Korea. The Indonesia countervailing duty order was later revoked after an appeal to the U.S. Court of International Trade ("CIT"). Then in September 2020, a new trade case was brought before the USDOC and USITC, to assess whether wind towers imported from India, Malaysia, and Spain were being sold in the U.S. at less than fair value. The USDOC and USITC issued affirmative final determinations in all three antidumping (India, Malaysia, and Spain) and two countervailing duty cases (India and Malaysia). The USDOC imposed orders for two cases in August 2021 and the remainder in December 2021. Appeals of several of the USDOC determinations are currently pending at the CIT and the CAFC.

 Additionally, the war in Ukraine has led to economic sanctions imposed against Russia by the U.S. and certain European nations, including a prohibition on doing business with certain Russian companies. Such sanctions may impact companies in many sectors and could lead to volatility of prices in the global energy industry. The extent and duration of the war and extent and strength of the sanctions are still developing, and the corresponding effect on the Company remains uncertain. Certain other geopolitical conflicts, including the war between Israel and Hamas may also lead to material disruptions to certain supply chains and volatility in prices.

 We could incur substantial costs to comply with environmental, health and safety ("EHS") laws and regulations and to address violations of or liabilities under these requirements.

 Our operations are subject to a variety of EHS laws and regulations in the jurisdictions in which we operate and sell products governing, among other things, health, safety, pollution and protection of the environment and natural resources, including the use, handling, transportation and disposal of non-hazardous and hazardous materials and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil, product content, performance and packaging. We cannot guarantee that we have been, or will at all times be in compliance with such laws and regulations. Changes in existing EHS laws and regulations, or their application, could cause us to incur additional or unexpected costs to achieve or maintain compliance. Failure to comply with these laws and regulations, obtain the necessary permits to operate our business, or comply with the terms and conditions of such permits may subject us to a variety of administrative, civil and criminal enforcement measures, including the imposition of civil and criminal sanctions, monetary fines and penalties, remedial obligations, and the issuance of compliance requirements limiting or preventing some or all of our operations. The assertion of claims relating to regulatory compliance, on or off-site contamination, natural resource damage, the discovery of previously unknown environmental liabilities, the imposition of criminal or civil fines or penalties and/or other sanctions, or the obligation to undertake investigation, remediation or monitoring activities could result in potentially significant costs and expenditures to address contamination or resolve claims or liabilities. Such costs and expenditures could have a material adverse effect on our business, financial condition or results of operations. Under certain circumstances, violation of such EHS laws and regulations could result in us being disqualified from eligibility to receive federal government contracts or subcontracts under the federal government's debarment and suspension system.

 We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of currently and formerly owned, leased or operated properties, or properties to which hazardous substances or wastes were sent by current or former operators at our current or former facilities, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. Several of our facilities have a history of industrial operations, and contaminants have been detected at some of our facilities. The presence of contamination from hazardous substances or wastes could interfere with ongoing operations or adversely affect our ability to sell, lease or use our properties as collateral for financing. We also could be held liable under third-party claims for property damage, natural resource damage or personal injury and for penalties and other damages under such environmental laws and regulations, which could have a material adverse effect on our business, financial condition and results of operations. During 2023, we did not incur significant remediation costs or penalties related to environmental matters.

 Our ability to comply with regulatory requirements and potential environmental, social and governance ("ESG") regulations and trends is critical to our future success, and there can be no guarantee that our businesses are in full compliance with all such requirements.

 As a manufacturer and distributor of wind and other energy industry products we are subject to the requirements of federal, state, local and foreign regulatory authorities. In addition, we are subject to a number of authorities setting industry standards, such as the American Gear Manufacturers Association and the American Welding Society. Changes in the standards and requirements imposed by such authorities could have a material adverse effect on us. In the event we are unable to meet any such standards when adopted, our businesses could be adversely affected. We may not be able to obtain all regulatory approvals, licenses and permits that may be required in the future, or any necessary modifications to existing regulatory approvals, licenses and permits, or maintain all required regulatory approvals, licenses and permits. There can be no guarantee that our businesses are fully compliant with such standards and requirements.

 Additionally, other ESG-related laws, regulations, treaties, and similar initiatives and programs are being proposed, adopted and implemented throughout the world. If we were to violate or become liable under environmental or certain ESG-related laws or if our products become non-compliant with such laws or market access requirements, our customers may refuse to purchase our products, and we could incur costs or face other sanctions, such as restrictions on our products entering certain jurisdictions, fines, and/or civil or criminal sanctions. In addition to potential implementation of ESG laws, investor advocacy groups, certain institutional investors, investment funds, other market participants, political figures, stockholders, and customers have focused increasingly on the ESG practices of companies, including those associated with climate change. If our ESG practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and employee retention may be negatively impacted based on an assessment of our ESG practices.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 Risk Management and Strategy

 We rely on information systems to obtain, rapidly process, analyze, and manage data in order to effectively operate our business. We are committed to protecting our business information, intellectual property, customer, supplier and employee data and information systems from cybersecurity risks and maintain an active cybersecurity risk management program.

 We maintain enterprise-wide information security policies, processes and standards that set the requirements around acceptable use of information systems and data, risk assessment and management, identity and access management, data security, security operations, security incident response and threat and vulnerability management. We work to align to the National Institute of Standards and Technology (NIST) 800-171 Cybersecurity Framework, as its program controls are designed to protect and maintain confidentiality, integrity, and continued availability of our data and information systems. Our team of information system professionals and third-party providers monitors our information systems for cybersecurity threats, breaches, intrusions and other weaknesses, responds to cybersecurity incidents, develops and implements plans to mitigate cybersecurity threats and facilitates training for our employees.

 We also engage consultants and other third-party advisors to conduct independent assessments of our cybersecurity readiness and control effectiveness. In collaboration with our third-party providers, we seek to gain insights into emerging threats and vulnerabilities, industry trends, and leading practices to inform our cybersecurity response.

 Governance

 Management plays a critical role in assessing and managing material risks from cybersecurity threats. Our Director of Information Technology leads an internal team and works directly with our third-party information security professionals to manage our cybersecurity risk management program and activities. This includes monitoring our information systems for cybersecurity threats, reviewing cybersecurity incidents, analyzing emerging threats, and the development and implementation of risk mitigation strategies.

 Our Director of Information Technology reports directly to our executive leadership team on cybersecurity matters, providing the leadership team with updates on enterprise risks, cybersecurity incidents, the status of ongoing initiatives, key metrics, and additional cybersecurity topics. Our information technology team, led by the Director of Information Technology, meets regularly to discuss the progress of ongoing program initiatives, cybersecurity priorities, identified risks and metrics.

 The Board of Directors exercises direct oversight of strategic risks to the Company. The Board has delegated the responsibility for cybersecurity oversight to the Audit Committee. The Audit Committee's responsibilities include reviewing and discussing with management the strategies, process and controls pertaining to the management of information technology operations, including cybersecurity risks and information security. The Director of Information Technology reports to the Audit Committee annually and more frequently, as needed, on cybersecurity matters, including the cybersecurity threat landscape, key metrics demonstrating the overall management of our cybersecurity risk and risk management program, related key initiatives, enterprise program framework alignment, annual risk mitigation strategy, and review of cybersecurity incidents. Our Board is committed to maintaining a well-informed and cybersecurity-aware posture, regularly engaging through regular and requested updates on our strategy and evolving threat landscape.

 ITEM 2. PROPERTIES

 Our corporate headquarters is located in Cicero, Illinois, a suburb located west of Chicago, Illinois. In addition, the Subsidiaries own or lease operating facilities, which are presented by operating segment as follows (information below is as of December 31, 2023).

 Owned /

 Approximate

 Operating Segment and Facility Type

 Location

 Square Footage

 Heavy Fabrications (1)

 Tower Manufacturing

 Manitowoc, WI

 194,000

 Tower Manufacturing

 Abilene, TX

 Owned

 175,000

 Industrial Fabrications Manufacturing

 Manitowoc, WI

 84,000

 Gearing and Corporate

 Gearing System Manufacturing—Machining and Corporate Administration

 Cicero, IL

 301,000

 Gearing System Manufacturing—Heat Treatment and Gearbox Repair

 Neville Island, PA

 Owned

 52,000

 Industrial Solutions Manufacturing

 Sanford, NC

 105,000

 (1)

 The Heavy Fabrications segment listing does not include the tower storage yards of 40 acres in Manitowoc, WI and 25 acres in Abilene, TX.

 We consider our active facilities to be in good condition and adequate for our present and future needs.

 ITEM 3. LEGAL PROCEEDINGS

 We are party to a variety of legal proceedings that arise in the ordinary course of our business. While the results of these legal proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on our results of operations, financial condition or cash flows. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our results of operations, financial condition or cash flows. It is possible that if one or more of such matters were decided against us, the effects could be material to our results of operations in the period in which we would be required to record or adjust the related liability and could also be material to our financial condition and cash flows in the period in which we would be required to pay such liability.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not Applicable.

 (Dollar amounts are presented in thousands, except per share data and unless otherwise stated)

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our common stock is traded on the NASDAQ Capital Market ("NASDAQ") under the symbol "BWEN." The following table sets forth the high and low bid prices of our common stock traded on the NASDAQ.

 Common Stock

 High

 Low

 2023

 First quarter

 $

 5.92

 $

 1.77

 Second quarter

 5.20

 3.35

 Third quarter

 4.59

 3.10

 Fourth quarter

 3.46

 2.05

 Common Stock

 High

 Low

 2022

 First quarter

 $

 2.36

 $

 1.58

 Second quarter

 2.17

 1.52

 Third quarter

 3.59

 1.47

 Fourth quarter

 2.83

 1.57

 The closing price for our common stock as of February 29, 2024 was $2.48. As of February 29, 2024, there were 50 holders of record of our common stock.

 Dividends

 We have never paid cash dividends on our common stock and have no current plan to do so in the foreseeable future. The declaration and payment of dividends on our common stock are subject to the discretion of our Board and are further limited by our credit agreement and other contractual agreements we may have in place from time to time. The decision of our Board to pay future dividends will depend on general business conditions, the effect of a dividend payment on our financial condition, and other factors our Board may consider relevant. The current policy of our Board is to reinvest cash generated in our operations to promote future growth and to fund potential investments.

 Repurchases

 There were no repurchases of our equity securities made during the years ended December 31, 2023 and 2022.

 Unregistered Sales of Equity Securities

 There were no unregistered sales of equity securities for the years ended December 31, 2023 or 2022.

 Securities Authorized for Issuance Under Equity Compensation Plans

 See Part III, Item 12 "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" of this Annual Report on Form 10-K for information as of December 31, 2023 with respect to shares of our common stock that may be issued under our existing share-based compensation plans.

 ITEM 6. SELECTED FINANCIAL DATA

 [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 As used in this Annual Report, the terms "we," "us," "our," "Broadwind," and the "Company" refer to Broadwind, Inc., a Delaware corporation headquartered in Cicero, Illinois, and its Subsidiaries.

 (Dollar amounts are presented in thousands, except per share data and unless otherwise stated)

 We booked $101,060 in net new orders in 2023, down from $368,027 in 2022. Heavy Fabrications orders decreased by 83% from the prior year 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 consistent with how orders are typically placed. Partially offsetting this decrease in wind tower orders was a 14% increase in industrial fabrication product line orders primarily due to improved demand for our Pressure Reducing Systems ("PRS") units. Gearing segment orders decreased 54% from the prior year primarily due to reduced demand from O&G and mining customers. Industrial Solutions segment orders increased by 26% in 2023 from the prior year primarily due to an increase in orders associated with new gas turbine and aftermarket projects.

 We recognized revenue of $203,477 in 2023, up 15% from revenue of $176,759 in 2022. Heavy Fabrications segment revenues increased by 14% primarily due to a 18% increase in wind tower revenue as a result of a 30 section increase in tower sections sold, less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers. Additionally, industrial fabrication product line revenues increased primarily due to higher shipments of our PRS units in the current year. Gearing segment revenue increased 7% relative to 2022 primarily due to higher shipments for industrial and steel customers, partially offset by a decrease in revenue from mining and O&G customers. Industrial Solutions segment revenue increased 41% from the prior year primarily due to increased demand for new and aftermarket gas turbine content, and increased revenue from international customers.

 We reported net income of $7,649, or $0.36 per share in 2023, compared to a net loss of $9,730 or $0.48 per share in 2022 primarily due to higher sales and $14,493 of gross AMP credits (discussed below) recognized in the current year.

 In January 2023, we announced that we 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.

 During 2023, we 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. The IRA includes advanced manufacturing tax credits for manufacturers of eligible components, including wind and solar components. Manufacturers of wind components qualify for the AMP credits based on the total rated capacity, expressed on a per watt basis, of the completed wind turbine for which such component is designed. The credit applies to each component produced and sold in the U.S. beginning in 2023 through 2032. Wind towers within the Company's Heavy Fabrications segment are eligible for credits of $0.03 per watt for each wind tower produced. In calculating the eligible credit, we relied on the megawatt rating provided by the customer. 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. We recognized the AMP credits as a reduction to cost of sales in our 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 our consolidated balance sheet as of December 31, 2023.

 On December 21, 2023, we entered into an agreement to sell 2023 and 2024 AMP credits to a third party. At that time, we sold a portion of the gross 2023 credits in the amount of $6,952 and recognized a 6.5% discount on the sale in the amount of $452 which was recognized in cost of sales. In addition, we wrote down the remaining receivable of $7,541 to net realizable value and recorded the expected loss on sale of $490 in cost of sales. The remaining 2023 AMP credit receivable was collected during the first quarter of 2024. We 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 our consolidated financial statements at December 31, 2023.

 We use our credit facility to fund working capital requirements and believe that our credit facility, together with the operating cash generated by our businesses, and any potential proceeds from access to the public or private debt or equity markets, are sufficient to meet all cash obligations over the next twelve months. On December 31, 2023, we had $4,657 outstanding under our senior secured revolving credit facility, $6,135 outstanding under our senior secured term loan, $1,099 of cash on hand, with the ability to borrow an additional $21,714. For a further discussion of our capital resources and liquidity, including a description of recent amendments and waivers under our credit facility, please see the discussion under "Liquidity, Financial Position and Capital Resources" in this Annual Report on Form 10-K.

 KEY METRICS USED BY MANAGEMENT TO MEASURE PERFORMANCE

 In addition to measures of financial performance presented in our consolidated financial statements in accordance with generally accepted accounting principles ("GAAP"), we use certain other financial measures to analyze our performance. These non-GAAP financial measures primarily consist of adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, share-based compensation, and other stock payments, restructuring costs, impairment charges, proxy contest-related expenses, and other non-cash gains and losses) and free cash flow which help us evaluate growth trends, establish budgets, assess operational efficiencies, oversee our overall liquidity, and evaluate our overall financial performance.

 Key Financial Measures

 2023

 2022

 Net revenues

 $

 $

 $

 7,649

 $

 (9,730

)

 Adjusted EBITDA (1)

 $

 21,474

 $

 2,444

 Capital expenditures

 $

 6,405

 $

 3,098

 Free cash flow (2)

 $

 (3,843

)

 $

 17,506

 Operating working capital (3)

 $

 19,408

 $

 Total debt

 $

 12,153

 $

 8,311

 Total orders

 $

 101,060

 $

 368,027

 Backlog at end of period (4)

 $

 183,088

 $

 297,200

 Book-to-bill (5)

 0.5

 2.1

 (1)

 We provide non-GAAP adjusted EBITDA as supplemental information regarding our business performance. Our management uses adjusted EBITDA when they internally evaluate the performance of our business, review financial trends and make operating and strategic decisions. We believe that this non-GAAP financial measure is useful to investors because it provides a better understanding of our past financial performance and future results, and it allows investors to evaluate our performance using the same methodology and information as used by our management. Our definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts.

 (2)

 We define free cash flow as adjusted EBITDA plus or minus changes in operating working capital less capital expenditures net of any proceeds from disposals of property and equipment. We believe free cash flow is a useful measure for investors because it portrays our ability to generate cash from our business for purposes such as repaying maturing debt and funding business acquisitions.

 (3)

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

 (4)

 Our backlog at December 31, 2023 and 2022 is net of revenue recognized over time. Backlog as of December 31, 2023 has been adjusted to reflect updated assumptions related to raw material pricing (which is a customer passthrough) and other variables.

 (5)

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

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

 2023

 2022

 Net income (loss) from continuing operations

 $

 7,649

 $

 (9,730

)

 Interest expense

 3,201

 3,218

 Income tax provision

 Depreciation and amortization

 6,383

 6,060

 Share-based compensation and other stock payments

 2,220

 2,861

 Proxy contest-related expenses

 1,780

 —

 Adjusted EBITDA

 21,474

 2,444

 Changes in operating working capital

 (18,933

)

 18,160

 Capital expenditures

 (6,405

)

 (3,098

)

 Proceeds from disposal of property and equipment

 —

 Free Cash Flow

 $

 (3,843

)

 $

 17,506

 RESULTS OF OPERATIONS

 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

 The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.

 Year Ended December 31,

 2023 vs. 2022

 % of Total

 % of Total

 2023

 Revenue

 2022

 Revenue

 $ Change

 % Change

 $

 100.0

 %

 $

 100.0

 %

 $

 26,718

 15.1

 %

 Cost of sales

 170,969

 84.0

 %

 166,049

 93.9

 %

 4,920

 3.0

 %

 Gross profit

 32,508

 16.0

 %

 10,710

 6.1

 %

 21,798

 203.5

 %

 Operating expenses

 Selling, general and administrative expenses

 20,705

 10.2

 %

 16,592

 9.4

 %

 4,113

 24.8

 %

 Intangible amortization

 0.3

 %

 0.4

 %

 (61

)

 (8.4

)%

 Total operating expenses

 21,369

 10.5

 %

 17,317

 9.8

 %

 4,052

 23.4

 %

 Operating income (loss)

 11,139

 5.5

 %

 (6,607

)

 (3.7

)%

 17,746

 268.6

 %

 Other expense, net

 Interest expense, net

 (3,201

)

 (1.6

)%

 (3,218

)

 (1.8

)%

 0.5

 %

 Other, net

 (48

)

 (0.0

)%

 0.1

 %

 (178

)

 (136.9

)%

 Total other expense, net

 (3,249

)

 (1.6

)%

 (3,088

)

 (1.7

)%

 (161

)

 (5.2

)%

 Net income (loss) before provision for income taxes

 7,890

 3.9

 %

 (9,695

)

 (5.5

)%

 17,585

 181.4

 %

 Provision for income taxes

 0.1

 %

 0.0

 %

 588.6

 %

 $

 7,649

 3.8

 %

 $

 (9,730

)

 (5.5

)%

 $

 17,379

 178.6

 %

 Consolidated

 Revenues increased by $26,718 during the year ended December 31, 2023 primarily due to a 14% increase in Heavy Fabrications segment revenues. Wind tower revenue increased 18% from the prior year primarily as a result of a 30 section increase in tower sections sold, less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers. Additionally, industrial fabrication product line revenues increased primarily due to higher shipments of our PRS units in the current year. Gearing segment revenue increased 7% relative to 2022 primarily due to higher shipments for industrial and steel customers, partially offset by a decrease in revenue from mining and O&G customers. Industrial Solutions segment revenue increased 41% from the prior year primarily due to increased demand for new and aftermarket gas turbine content, in addition to increased revenue recognized from international customers.

 Gross profit improved by $21,798 during the year ended December 31, 2023 primarily due to the higher sales volumes within all segments and $14,493 recognized from the AMP credits. As a result, our gross margin increased from 6.1% for the year ended December 31, 2022, to 16.0% for the year ended December 31, 2023.

 Operating expenses as a percentage of sales increased to 10.5% in 2023 from 9.8% in 2022 primarily due to proxy-contest related expenses, higher medical costs, and increased incentive compensation.

 Net income increased from a net loss of $9,730 for the year ended December 31, 2022 to net income of $7,649 for the year ended December 31, 2023.The increase in net income was primarily due to the factors described above.

 Heavy Fabrications Segment

 The following table summarizes the Heavy Fabrications segment operating results for the twelve months ended December 31, 2023 and 2022:

 2023

 2022

 Orders

 $

 50,594

 $

 294,097

 Tower sections sold

 133,368

 117,206

 Operating income (loss)

 15,006

 (1,044

)

 Operating margin

 11.3

 %

 (0.9

)%

 Heavy Fabrications orders decreased by 83% versus the prior year 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 consistent with how orders are typically placed. Partially offsetting this decrease in wind tower orders was a 14% increase in industrial fabrication product line orders primarily due to improved demand for our PRS units. Segment revenues increased by 14% primarily due to a 18% increase in wind tower revenue primarily as a result of a 30 section increase in tower sections sold, less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers. Additionally, industrial fabrication product line revenues increased primarily due to higher shipments of our PRS units in the current year.

 Heavy Fabrications segment operating results improved by $16,050 as compared to the prior year. The improvement in operating performance was primarily a result of reduced wind tower costs as a result of the AMP credits recognized of $14,493 in the current year. Operating profit margin was 11.3% during the year ended December 31, 2023 compared to (0.9%) during the year ended December 31, 2022.

 Gearing Segment

 The following table summarizes the Gearing segment operating results for the twelve months ended December 31, 2023 and 2022:

 2023

 2022

 Orders

 $

 24,814

 $

 53,597

 45,408

 42,588

 Operating income

 1,846

 Operating margin

 4.1

 %

 0.1

 %

 Gearing segment orders for the year ended December 31, 2023 decreased 54% compared to the year ended December 31, 2022 primarily due to reduced demand from O&G and mining customers. Revenues increased 7% during the year ended December 31, 2023 from the prior year primarily due to higher shipments of industrial and steel customers, partially offset by a decrease in revenue from mining and O&G customers.

 The Gearing segment's operating income improved by $1,803 during the year ended December 31, 2023 from the year ended December 31, 2022 primarily due 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 4.1% for the year ended December 31, 2023 compared to 0.1% during the year ended December 31, 2022.

 Industrial Solutions Segment

 The following table summarizes the Industrial Solutions segment operating results for the twelve months ended December 31, 2023 and 2022.

 2023

 2022

 Orders

 $

 25,652

 $

 20,333

 25,159

 17,804

 Operating income

 3,160

 Operating margin

 12.6

 %

 0.7

 %

 Industrial Solutions segment orders increased by 26% for the year ended December 31, 2023 primarily due to an increase in orders associated with new gas turbine and aftermarket projects. Segment revenue increased 41% from the prior year primarily due to increased demand for new and aftermarket gas turbine content, in addition to revenue recognized from international customers. The improvement in operating income during the year ended December 31, 2023 was a result of higher sales and a more profitable mix of product sold. The operating margin improved from 0.7% during the year ended December 31, 2022, to 12.6% during the year ended December 31, 2023.

 Corporate and Other

 Corporate and Other expenses increased by $3,162 during the year ended December 31, 2023 primarily due to higher medical costs, increased incentive compensation, and increased professional fees associated with the contested proxy election.

 SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 The methods, estimates and judgments that we use in applying our critical accounting policies have a significant impact on the results that we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.

 We have identified the accounting policies listed below to be critical to obtain an understanding of our consolidated financial statements. This section should also be read in conjunction with Note 1, "Description of Business and Summary of Significant Accounting Policies" in the notes to our consolidated financial statements for further discussion of these and other significant accounting policies.

 Revenue Recognition

 We recognize revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Customer deposits and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers, like those made for liquidated damages, are presumed to be classified as reductions of revenue in our statement of operations.

 In many instances within our Heavy Fabrications segment, wind towers as well as certain 2023 sales within our Gearing segment, are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition versus shipment, due to our customers' preference to ship products in batches to support efficient construction of wind farms. We recognize revenue under these arrangements when there is a substantive reason for the arrangement (i.e., the buyer requests the arrangement), the ordered goods are segregated from inventory and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and we do not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance.

 During 2023 and 2022, we also recognized revenue over time, versus point in time, when products in the Heavy Fabrications segments had no alternative use to us and we had an enforceable right to payment, including profit, upon termination of the contract by the customer. Since the projects are labor intensive, we use labor hours as the input measure of progress for the contract. Contract assets are recorded when performance obligations are satisfied but we are not yet entitled to payment. We recognize contract assets associated with this revenue which represents our rights to consideration for work completed but not billed at the end of the period.

 Warranty Liability

 We provide warranty terms that generally range from one to five years for various products relating to workmanship and materials supplied by us. In certain contracts, we have recourse provisions for items that would enable us to seek recovery from third parties for amounts paid to customers under warranty provisions. We estimate the warranty accrual based on various factors, including historical warranty costs, current trends, product mix and sales.

 Inventories

 Inventories consist of raw materials, work-in-process and finished goods. Raw materials consist of components and parts for general production use. Work-in-process consists of labor and overhead, processing costs, purchased subcomponents, and materials purchased for specific customer orders. Finished goods consist of components purchased from third parties as well as components manufactured by us.

 Inventories are stated at the lower of cost or net realizable value. Where necessary, we have recorded a reserve for the excess of cost over net realizable value in our inventory allowance. Net realizable value of inventory, and management's judgment concerning the need for reserves, encompasses consideration of many business factors including physical condition, inventory holding period, contract terms and usefulness. Inventories are valued based either on actual cost or using a first-in, first out method.

 Long-Lived Assets

 We review property and equipment and other long-lived assets ("long-lived assets") for impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable. Due to triggering events identified within our segments at various times in the past, we continue to evaluate the recoverability of certain of the long-lived assets. During the year ended December 31, 2023, we did not identify any triggering events within our segments and no impairment expense was recorded.

 Income Taxes

 We account for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted.

 In connection with the preparation of our consolidated financial statements, we are required to estimate our income tax liability for each of the tax jurisdictions in which we operate. This process involves estimating our actual current income tax expense and assessing temporary differences resulting from differing treatment of certain income or expense items for income tax reporting and financial reporting purposes. We also recognize the expected future income tax benefits of NOL carryforwards as deferred income tax assets. In evaluating the realizability of deferred income tax assets associated with NOL carryforwards, we consider, among other things, expected future taxable income, the expected timing of the reversals of existing temporary reporting differences, and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Changes in, among other things, income tax legislation, statutory income tax rates or future taxable income levels could materially impact our valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods.

 We also account for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. We follow the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition related to the uncertainty in these income tax positions.

 LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

 On August 4, 2022, we entered into a credit agreement (as amended, the "2022 Credit Agreement") with Wells Fargo Bank, National Association, as lender ("Wells Fargo"), providing the Company and its subsidiaries with a $35,000 senior secured revolving credit facility (which may be further increased by up to an additional $10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $7,578 senior secured term loan (collectively, as amended, the "2022 Credit Facility"). The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. As of December 31, 2023, cash totaled $1,099, a decrease of $11,633 from December 31, 2022. Debt and finance lease obligations at December 31, 2023 totaled $17,678, and we had the ability to borrow up to $21,714 under the 2022 Credit Facility.

 In addition to the 2022 Credit Facility, we also utilize supply chain financing arrangements as a component of our funding for working capital, which accelerates receivable collections and helps to better manage cash flow. Under these agreements, we have agreed to sell certain of our accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements. The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the consolidated statements of cash flows. Fees incurred in connection with the agreements are recorded as interest expense.

 On September 22, 2023, we 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") and which will expire on October 12, 2026, 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, par value $0.001 per share with an aggregate sales price of up to $12,000. 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 and before deducting other expenses of $93. No shares of our common stock were issued under the Sales Agreement during the year ended December 31, 2023. As of December 31, 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.

 We anticipate that we will be able to satisfy the cash requirements associated with, among other things, working capital needs, capital expenditures and lease commitments through at least the next twelve months primarily through cash generated from operations, available cash balances, our Credit Facility, sales of shares under the Sales Agreement, additional equipment financing, and access to the public or private debt and/or equity markets, including the option to raise additional capital from the sale of our securities under the Form S-3, and proceeds from sales of AMP credits.

 Other

 We have outstanding notes payable for capital expenditures in the amount of $1,361 and $1,094 as of December 31, 2023 and 2022, respectively, with $163 and $88 included in the "Line of credit and current maturities of long-term debt" line item of our consolidated financial statements as of December 31, 2023 and 2022, respectively. The notes payable have monthly payments that range from $3 to $15 and an interest rate of 6%. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates in September 2028.

 Sources and Uses of Cash

 The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2023 and 2022:

 2023

 2022

 Total cash (used in) provided by:

 Operating activities

 $

 (6,946

)

 $

 16,643

 Investing activities

 (6,384

)

 (3,098

)

 Financing activities

 1,697

 (1,665

)

 Net (decrease) increase in cash

 $

 (11,633

)

 $

 11,880

 Operating Cash Flows

 During the year ended December 31, 2023, net cash used in operating activities was $6,946 compared to net cash provided by operating activities of $16,643 for the year ended December 31, 2022. The decrease in net cash provided by operating activities was primarily attributable to the new AMP credit receivable and a decrease in customer deposits in 2023, versus an increase in the prior year. Partially offsetting this was a decrease in inventory during 2023 as compared to an increase in the prior year.

 Investing Cash Flows

 During the year ended December 31, 2023, net cash used in investing activities was $6,384 compared to net cash used in investing activities of $3,098 for the year ended December 31, 2022. The increase was primarily due to an increase in net purchases of property and equipment.

 Financing Cash Flows

 During the year ended December 31, 2023, net cash provided by financing activities totaled $1,697 compared to net cash used in financing activities of $1,665 for the year ended December 31, 2022. The increase was primarily due to increased net borrowings under the 2022 Credit Facility in the current year period.

 Contractual Obligations

 We enter into a variety of contractual obligations as part of our normal operations in addition to capital expenditures. As of December 31, 2023, we have (i) debt obligations related to our Credit Facility and other notes payable as described in Note 10, "Debt and Credit Agreements" of our consolidated financial statements (ii) cash payments for operating and finance lease obligations that are described in Note 11, "Leases" of our consolidated financial statements and (iii) purchase obligations made in the normal course of business. We expect to fund these cash requirements primarily through cash generated from operations, available cash balances, our 2022 Credit Facility, sales of shares under the Sales Agreement, additional equipment financing, proceeds from sales of AMP credits, and access to the public or private debt and/or equity markets, including the option to raise additional capital from the sale of our securities under a "shelf" registration statement on Form S-3.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and as such are not required to provide information under this item.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 The financial information required by Item 8 is contained in Part IV, Item 15 "EXHIBITS AND FINANCIAL STATEMENT SCHEDULES" of this Annual Report.

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 (a)

 Evaluation of Disclosure Controls and Procedures

 We seek to maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. This information is also accumulated and communicated to management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. Our management, under the supervision and with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the most recent fiscal year reported on herein. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2023.

 (b)

 Changes in Internal Control over Financial Reporting

 There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 (c)

 Report of Management on Internal Control Over Financial Reporting

 Our management, including our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

 Our management, including our CEO and CFO, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. Management based this assessment on criteria for effective internal control over financial reporting described in "Internal Control—Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that our internal control over financial reporting was effective as of December 31, 2023.

 We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

 ITEM 9B. OTHER INFORMATION

 Rule 10b5 - 1 Trading Arrangements

 None of our directors or executive officers adopted or terminated a Rule 10b5 - 1 trading arrangement or a non-Rule 10b5 - 1 trading arrangement (as defined in Item 408 (c) of Regulation S-K) during the fourth quarter of 2023.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 None.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 With the exception of the description of our Code of Ethics and Business Conduct below, the information required by this item is incorporated herein by reference from the discussion under the headings "Directors and Director Compensation," "Corporate Governance," and "Executive Officers" in our definitive Proxy Statement to be filed in connection with our 2024 Annual Meeting of Stockholders (the "2024 Proxy Statement").

 Code of Ethics and Business Conduct

 We have adopted a Code of Ethics and Business Conduct (the "Code") that applies to all of our directors, executive officers and senior financial officers (including our principal executive officer, principal financial officer, principal accounting officer, controller, and any person performing similar functions). The Code is available on our website at www.bwen.com under the caption "Investors" and is available in print, free of charge, to any stockholder who sends a request for a paper copy to Broadwind, Inc., Attn: Investor Relations, 3240 South Central Avenue, Cicero, IL 60804. We intend to include on our website any amendment to, or waiver from, a provision of the Code that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K.

 ITEM 11. EXECUTIVE COMPENSATION

 Information regarding director and executive compensation is incorporated by reference from the discussion under the headings "Directors and Director Compensation," "Executive Officers" and "Compensation Discussion and Analysis" in the 2024 Proxy Statement.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 Certain of the information required by this item is incorporated herein by reference from the discussion under the heading "Security Ownership of Certain Beneficial Holders and Management" in the 2024 Proxy Statement.

 The following table provides information as of December 31, 2023, with respect to shares of our common stock that may be issued under our existing equity compensation plans:

 EQUITY COMPENSATION PLAN INFORMATION

 (a)

 (b)

 (c)

 Number of securities

 remaining available for

 Number of securities

 future issuances under

 to be issued upon

 Weighted average

 equity compensation

 exercise of

 exercise price of

 plans (excluding

 outstanding options,

 outstanding options,

 securities reflected in

 Plan Category

 warrants, and rights

 warrants, and rights

 column (a))

 Equity compensation plans approved by stockholders

 687,206

 (1)

 $

 3.03

 1,272,405

 Total

 687,206

 $

 3.03

 1,272,405

 (1)

 Includes outstanding restricted stock awards pursuant to the 2015 EIP. This plan has been approved by our stockholders.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The information required by this item is incorporated herein by reference from the discussion under the headings "Certain Transactions and Business Relationships" and "Corporate Governance" in the 2024 Proxy Statement.

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The information required by this item is incorporated herein by reference from the discussion under the heading "Ratification of Appointment of Independent Registered Public Accounting Firm" in the 2024 Proxy Statement.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 1. Financial Statements

 The financial statements listed on the Index to Financial Statements (page 34) are filed as part of this Annual Report.

 2. Financial Statement Schedules

 These schedules have been omitted because the required information is included in the consolidated financial statements or notes thereto or because they are not applicable or not required.

 3. Exhibits

 The exhibits listed on the Index to Exhibits are filed as part of this Annual Report.

 ITEM 16. FORM 10-K SUMMARY

 None.

 INDEX TO FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm ( PCAOB ID 49)

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 Report of Independent Registered Public Accounting Firm

 To the Stockholders and the Board of Directors of Broadwind, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated balance sheets of Broadwind, Inc. and its subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 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. These AMP Credits were introduced as part of the Inflation Reduction Act (IRA), which was enacted on August 16, 2022. Eligible manufacturers of wind components qualify for the AMP Credits based on the total rated capacity, expressed on a per watt basis, of the completed wind turbine for which such component is designed. The credit applies to each component produced and sold in the U.S. beginning in 2023 through 2032. Wind towers within the Company's Heavy Fabrications segment are eligible for credits of $0.03 per watt for each wind tower produced. In calculating the eligible credit, the Company relied on the megawatt rating provided by the customer. 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.

 On December 21, 2023, the Company entered into an agreement to sell 2023 and 2024 AMP Credits to a third party. At that time, the Company sold a portion of the gross 2023 credits in the amount of $6,952 and recognized a 6.5% discount on the sale in the amount of $452, which was recognized in cost of sales. In addition, the Company wrote down the remaining receivable of $7,541 to net realizable value and recorded the expected loss on sale of $490 in cost of sales. The remaining 2023 AMP credit receivable was collected during the first quarter of 2024. 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.

 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.

 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.

 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.

 /S/ RSM US LLP

 We have served as the Company's auditor since 2016.

 Chicago, Illinois

 CONSOLIDATED BALANCE SHEETS

 (In thousands, except share data)

 As of December 31,

 2023

 2022

 ASSETS

 CURRENT ASSETS:

 Cash

 $
 1,099

 $
 12,732

 Accounts receivable, net

 19,231

 17,018

 AMP credit receivable

 7,051

 —

 Contract assets

 1,460

 1,955

 Inventories

 37,405

 44,262

 Prepaid expenses and other current assets

 3,500

 3,291

 Total current assets

 69,746

 79,258

 LONG-TERM ASSETS:

 Property and equipment, net

 47,123

 45,319

 Operating lease right-of-use assets

 15,593

 16,396

 Intangible assets, net

 2,064

 2,728

 Other assets

 TOTAL ASSETS

 $
 135,156

 $
 144,540

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES:

 Line of credit and current maturities of long-term debt

 $
 5,903

 $
 1,170

 Current portion of finance lease obligations

 2,153

 2,008

 Current portion of operating lease obligations

 1,851

 1,882

 Accounts payable

 20,728

 26,255

 Accrued liabilities

 6,477

 4,313

 Customer deposits

 16,500

 34,550

 Total current liabilities

 53,612

 70,178

 LONG-TERM LIABILITIES:

 Long-term debt, net of current maturities

 6,250

 7,141

 Long-term finance lease obligations, net of current portion

 3,372

 4,226

 Long-term operating lease obligations, net of current portion

 15,888

 16,696

 Other

 Total long-term liabilities

 25,525

 28,089

 COMMITMENTS AND CONTINGENCIES

 STOCKHOLDERS' EQUITY:

 Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding

 —

 —

 Common stock, $ 0.001 par value; 30,000,000 shares authorized; 21,840,301 and 21,127,130 shares issued as of December 31, 2023, and December 31, 2022, respectively

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

)

)

 Additional paid-in capital

 399,336

 397,240

 Accumulated deficit

 ( 341,497
)

 ( 349,146
)

 Total stockholders' equity

 56,019

 46,273

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 135,156

 $
 144,540

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

 CONSOLIDATED STATEMENTS OF OPERATIONS

 (In thousands, except per share data)

 For the Years Ended December 31,

 2023

 2022

 $

 $

 Cost of sales

 170,969

 166,049

 Gross profit

 32,508

 10,710

 OPERATING EXPENSES:

 Selling, general and administrative

 20,705

 16,592

 Intangible amortization

 Total operating expenses

 21,369

 17,317

 Operating income (loss)

 11,139

 ( 6,607
)

 OTHER EXPENSE, net:

 Interest expense, net

 ( 3,201
)

 ( 3,218
)

 Other, net

 ( 48
)

 Total other expense, net

 ( 3,249
)

 ( 3,088
)

 Net income (loss) before provision for income taxes

 7,890

 ( 9,695
)

 Provision for income taxes

 NET INCOME (LOSS)

 7,649

)

 NET INCOME (LOSS) PER COMMON SHARE—BASIC:

 $
 0.36

 $
 ( 0.48
)

 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC

 21,189

 20,299

 NET INCOME (LOSS) PER COMMON SHARE—DILUTED:

 $
 0.36

 $
 ( 0.48
)

 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED

 21,491

 20,299

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

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 (In thousands, except share data)

 Common Stock

 Treasury Stock

 Shares

 Issued

 Issued

 Additional

 Issued

 Amount

 Shares

 Amount

 Paid-in Capital

 Deficit

 Total

 BALANCE, December 31, 2021

 19,859,650

 $

 ( 273,937
)

 $
)

 $
 395,372

 $
 ( 339,416
)

 $
 54,134

 Stock issued for restricted stock

 818,956

 —

 —

 —

 —

 —

 —

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

 629,213

 —

 —

 —

 1,244

 —

 1,244

 Share-based compensation

 —

 —

 —

 —

 —

 Shares withheld for taxes in connection with issuance of restricted stock

 ( 281,068
)

 —

 —

 —

 ( 549
)

 —

 ( 549
)

 Sale of common stock, net

 100,379

 —

 —

 —

 Net loss

 —

 —

 —

 —

 —

)

)

 BALANCE, December 31, 2022

 21,127,130

 $

 ( 273,937
)

 $
)

 $
 397,240

 $
 ( 349,146
)

 $
 46,273

 Stock issued for restricted stock

 493,327

 —

 —

 —

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

 380,247

 —

 —

 —

 1,336

 —

 1,336

 Share-based compensation

 —

 —

 —

 —

 —

 Shares withheld for taxes in connection with issuance of restricted stock

 ( 160,403
)

 —

 —

 —

 ( 735
)

 —

 ( 735
)

 Net income

 —

 —

 —

 —

 —

 7,649

 7,649

 BALANCE, December 31, 2023

 21,840,301

 $

 ( 273,937
)

 $
)

 $
 399,336

 $
 ( 341,497
)

 $
 56,019

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

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 (In thousands)

 Year Ended December 31,

 2023

 2022

 CASH FLOWS FROM OPERATING ACTIVITIES:

 $
 7,649

 $
)

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

 Depreciation and amortization expense

 6,383

 6,060

 Deferred income taxes

 ( 10
)

 ( 13
)

 Change in fair value of interest rate swap agreements

 —

 ( 27
)

 Stock-based compensation

 Allowance for doubtful accounts

 ( 30
)

 Common stock issued under defined contribution 401(k) plan

 1,336

 1,244

 Loss on disposal of assets

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 2,295
)

 ( 3,186
)

 AMP credit receivable

 ( 7,051
)

 —

 Employee retention credit receivable

 —

 Contract assets

 ( 820
)

 Inventories

 6,857

 ( 10,885
)

 Prepaid expenses and other current assets

 ( 210
)

 ( 629
)

 Accounts payable

 ( 6,008
)

 9,926

 Accrued liabilities

 2,782

 Customer deposits

 ( 18,050
)

 22,468

 Other non-current assets and liabilities

 Net cash (used in) provided by operating activities

 ( 6,946
)

 16,643

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchases of property and equipment

 ( 6,405
)

 ( 3,098
)

 Proceeds from disposals of property and equipment

 —

 Net cash used in investing activities

 ( 6,384
)

 ( 3,098
)

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from (payments on) line of credit, net

 4,705

 ( 6,368
)

 Payments for deferred financing costs

 ( 48
)

 ( 452
)

 Proceeds from long-term debt

 1,056

 8,113

 Payments on long-term debt

 ( 1,872
)

 ( 863
)

 Principal payments on finance leases

 ( 1,409
)

 ( 1,776
)

 Shares withheld for taxes in connection with issuance of restricted stock

 ( 735
)

 ( 549
)

 Proceeds from sale of common stock, net

 —

 Net cash provided by (used in) financing activities

 1,697

 ( 1,665
)

 NET (DECREASE) INCREASE IN CASH

 ( 11,633
)

 11,880

 CASH beginning of the period

 12,732

 CASH end of the period

 $
 1,099

 $
 12,732

 Supplemental cash flow information:

 Interest paid

 $
 2,073

 $
 1,638

 Income taxes paid

 $

 $

 Non-cash investing and financing activities:

 Equipment additions via finance lease

 $

 $
 3,882

 Non-cash purchases of property and equipment

 $

 $

 Settlement of incentive compensation liability with stock

 $

 —

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

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Description of Business

 Broadwind, Inc. (the "Company") is a precision manufacturer of structures, equipment and components for clean tech and other specialized applications. The Company provides technologically advanced high value products to customers with complex systems and stringent quality standards that operate in energy, mining and infrastructure sectors, primarily in the United States of America (the "U.S."). The Company's most significant presence is within the U.S. wind energy industry, although the Company has increasingly diversified into other industrial markets. Within the U.S. wind energy industry, the Company provides products primarily to turbine manufacturers. The Company also provides precision gearing and heavy fabrications to a broad range of industrial customers for oil and gas ("O&G"), mining, steel and other industrial applications, in addition to supplying components for natural gas turbines. The Company has three reportable operating segments: Heavy Fabrications, Gearing, and Industrial Solutions.

 The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. The Company's most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve capacity utilization, reduce customer concentrations, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and adapters primarily to wind turbine manufacturers. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers ( 1650 tower sections), sufficient to support turbines generating more than 1,100 MW of power. The Company has expanded its production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and original equipment manufacturer ("OEM") components utilized in surface and underground mining, construction, material handling, O&G and other infrastructure markets. The Company has designed and manufactures a mobile, modular pressure reducing system for the compressed natural gas virtual pipeline market. The Company manufactures components for buckets, shovels, car bodies, drill masts and other products that support mining and construction markets. In other industrial markets, the Company provides crane components, pressure vessels, frames and other structures.

 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. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in addition to gearbox repair in Cicero, Illinois, and heat treatment and gearbox repair in Neville Island, Pennsylvania.

 The Company provides supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market. The Company has recently expanded into the U.S. 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.

 Liquidity

 The Company meets its short term liquidity needs through cash generated from operations, its available cash balances, through its 2022 Credit Facility (as defined and further discussed in Note 10 "Debt and Credit Agreements" of these consolidated financial statements), equipment financing, access to the public and private debt and/or equity markets, and has the option to raise capital under the Company's registration statement on Form S- 3 (as discussed below), and proceeds from sales of Advanced Manufacturing Production tax credits ("AMP credits") (discussed in Note 7 "AMP Credits" of these consolidated financial statements). The Company uses the 2022 Credit Facility to fund working capital requirements. Under the 2022 Credit Facility, borrowings are continuous and all cash receipts are usually applied to the outstanding borrowed balance. As of December 31, 2023, cash totaled $ 1,099, a decrease of $ 11,633 from December 31, 2022. The Company had the ability to borrow up to $ 21,714 under the 2022 Credit Facility as of December 31, 2023.

 The Company also utilizes supply chain financing arrangements as a component of its funding for working capital, which accelerates receivable collections and helps to better manage cash flow. Under these agreements, the Company has agreed to sell certain of its accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements. The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the Company's consolidated statements of cash flows. Fees incurred in connection with the agreements are recorded as interest expense by the Company.

 During the years ended December 31, 2023 and December 31, 2022, the Company sold account receivables totaling $ 40,343 and $ 93,245, respectively, related to supply chain financing arrangements, of which customers' financial institutions applied discount fees totaling $ 858 and $ 1,431, respectively.

 Debt and finance lease obligations at December 31, 2023 totaled $ 17,678, which includes current outstanding debt and finance lease obligations totaling $ 8,056. The Company's outstanding debt includes $ 6,135 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.

 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. 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. 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 year ended December 31, 2023. As of December 31, 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.

 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, 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.

 Reclassifications

 Certain prior year amounts, which are not material, have been reclassified to conform to current year presentation in the consolidated financial statements and the notes to the consolidated financial statements.

 Summary of Significant Accounting Policies

 Management's Use of Estimates

 The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include inventory reserves, warranty reserves, impairment of long-lived assets, allowance for doubtful accounts, and valuation allowances on deferred taxes. Although these estimates are based upon management's best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from these estimates.

 Cash

 As of December 31, 2023 and December 31, 2022, cash totaled $ 1,099 and $ 12,732, respectively. For the years ended December 31, 2023 and 2022, interest income was $ 8 and $ 0, respectively.

 Revenue Recognition

 Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are presumed to be classified as reductions of revenue in the Company's statement of operations.

 For substantially all tower sales within the Company's Heavy Fabrications segment, as well as certain 2023 sales within our Gearing segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition versus shipment. The Company recognizes revenue under these arrangements only when there is a substantive reason for the agreement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance.

 During 2023 and 2022, the Company also recognized revenue over time, versus point in time, when products in the Heavy Fabrications segments had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contract by the customer. Since the projects are labor intensive, the Company uses labor hours as the input measure of progress for the contract. Contract assets are recorded when performance obligations are satisfied but the Company is not yet entitled to payment. The Company recognizes contract assets associated with this revenue which represents its rights to consideration for work completed but not billed at the end of the period.

 Cost of Sales

 Cost of sales represents all direct and indirect costs associated with the production of products for sale to customers. These costs include operation, repair and maintenance of equipment, materials, direct and indirect labor and benefit costs, rent and utilities, maintenance, insurance, equipment rentals, freight, and depreciation. AMP credits and related discounts and administrative fees are also recognized in cost of sales. See "AMP Credits" discussion below in this "Summary of Significant Accounting Policies" for further details.

 Selling, General and Administrative Expenses

 Selling, general and administrative ("SG&A") expenses include all corporate and administrative functions such as sales and marketing, legal, human resource management, finance, investor and public relations, information technology and senior management. These functions serve to support the Company's current and future operations and provide an infrastructure to support future growth. Major expense items in this category include management and staff wages and benefits, share-based compensation and professional services.

 Accounts Receivable (A/R)

 The Company generally grants uncollateralized credit to customers on an individual basis based upon the customer's financial condition and credit history. Credit is typically on net 30 day terms and customer deposits are frequently required at various stages of the production process to finance customized products and minimize credit risk.

 Historically, the Company's A/R is highly concentrated with a select number of customers. During the year ended December 31, 2023, the Company's five largest customers accounted for 65 % of its consolidated revenues and 27 % of outstanding A/R balances, compared to the year ended December 31, 2022 when the Company's five largest customers accounted for 69 % of its consolidated revenues and 43 % of its outstanding A/R balances.

 Allowance for Doubtful Accounts

 Beginning January 1, 2023, the Company assessed and recorded an allowance for credit losses using the current expected credit loss ("CECL") model. The adjustment for credit losses to management's current estimate is recorded in net income as credit loss expense. All credit losses were on trade receivables and/or contract assets arising from the Company's contracts with customers.

 The Company selected a loss-rate method for the CECL model based on the relationship between historical write-offs of receivables and the underlying sales by major customers. Utilizing this model, a historical loss-rate is applied against the amortized cost of applicable assets, at the time the asset is established. The loss rate reflects the Company's current estimate of the risk of loss (even when that risk is remote) over the expected remaining contractual life of the assets. 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 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.

 AMP Credits

 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. Income-based grants are initially recognized as "AMP credit receivable" and as a reduction to cost of sales. The Company recognizes grants expected to be received directly from a government entity at their stated value. When the Company expects to transfer grants to a third party, it recognizes the grants at, or adjusts their carrying value to, the amount expected to be received from the transaction. Proceeds received from income-based grants are presented as cash inflows from operating activities.

 Inventories

 Inventories are stated at the lower of cost or net realizable value. Net realizable value is the value that can be realized upon the sale of the inventory less a reasonable estimate of selling costs. Cost is determined either based on the first -in, first -out ("FIFO") method, or on a standard cost basis that approximates the FIFO method. Any excess of cost over net realizable value is included in the Company's inventory allowance. Net realizable value of inventory, and management's judgment of the need for reserves, encompasses consideration of other business factors including physical condition, inventory holding period, contract terms and usefulness.

 Inventories consist of raw materials, work-in-process and finished goods. Raw materials consist of components and parts for general production use. Work-in-process consists of labor and overhead, processing costs, purchased subcomponents and materials purchased for specific customer orders. Finished goods consist of components purchased from third parties as well as components manufactured by the Company that will be used to produce final customer products.

 Long-Lived Assets

 Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is recognized using the straight-line method over the estimated useful lives of the related assets for financial reporting purposes, and generally using an accelerated method for income tax reporting purposes. Depreciation expense related to property and equipment for the years ended December 31, 2023 and 2022 was $ 5,719 and $ 5,335, respectively. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed as incurred. Property or equipment sold or disposed of is removed from the respective property accounts, with any corresponding gains and losses recorded within the operating results of the Company's consolidated statement of operations.

 The Company reviews property and equipment and other long-lived assets ("long-lived assets") for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Asset recoverability is first measured by comparing the assets' carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired.

 In evaluating the recoverability of long-lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the Company's fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment and other long-lived assets. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. See Note 8, "Long-Lived Assets" of these consolidated financial statements for further discussion of long-lived assets.

 The Company leases various property and equipment under operating lease arrangements. The Company recognizes operating lease assets and liabilities on the balance sheet. Rent expense for these types of leases is recognized on a straight-line basis over the lease term. In addition, the Company has entered into finance lease arrangements to finance property and equipment and assumed finance lease obligations in connection with certain acquisitions. The cost basis and accumulated amortization of assets recorded under finance leases are included in property and equipment, while the liabilities are included in finance lease obligations.

 Warranty Liability

 The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. Warranty liability is recorded in accrued liabilities within the consolidated balance sheet. The Company estimates the warranty accrual based on various factors, including historical warranty costs, current trends, product mix and sales. The changes in the carrying amount of the Company's total product warranty liability for the years ended December 31, 2023 and 2022 were as follows:

 As of December 31,

 2023

 2022

 Balance, beginning of period

 $

 $

 Increase of warranty reserve

 Warranty claims

 ( 19
)

 —

 Other adjustments

 ( 14
)

 Balance, end of period

 $

 $

 Income Taxes

 The Company accounts for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted.

 In connection with the preparation of its consolidated financial statements, the Company is required to estimate its income tax liability for each of the tax jurisdictions in which the Company operates. This process involves estimating the Company's actual current income tax expense and assessing temporary differences resulting from differing treatment of certain income or expense items for income tax reporting and financial reporting purposes. The Company also recognizes as deferred income tax assets the expected future income tax benefits of net operating loss ("NOL") carryforwards. In evaluating the realizability of deferred income tax assets associated with NOL carryforwards, the Company considers, among other things, expected future taxable income, the expected timing of the reversals of existing temporary reporting differences and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Changes in, among other things, income tax legislation, statutory income tax rates or future taxable income levels could materially impact the Company's valuation of income tax assets and liabilities and could cause its income tax provision to vary significantly among financial reporting periods.

 The Company also accounts for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company follows the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition related to the uncertainty in these income tax positions.

 Share-Based Compensation

 The Company grants incentive stock options, restricted stock units ("RSUs") and/or performance awards ("PSUs") to certain officers, directors, and employees. The Company accounts for share-based compensation related to these awards based on the estimated fair value of the equity award and recognizes expense ratably over the required vesting term of the award. The expense associated with PSUs is also based on the probability of achieving embedded targets. Awards that are based on a fixed number of shares are treated as equity while awards that are based on a fixed amount of dollars are treated as liabilities. See Note 15 "Share-Based Compensation" of these consolidated financial statements for further discussion of the Company's share-based compensation plans, the nature of share-based awards issued and the Company's accounting for share-based compensation.

 Net Income Per Share

 The Company presents both basic and diluted net income (loss) per share. Basic net income (loss) per share is based solely upon the weighted average number of common shares outstanding and excludes any dilutive effects of restricted stock, options, warrants and convertible securities. Diluted net income (loss) per share is based upon the weighted average number of common shares and common-share equivalents outstanding during the year excluding those common-share equivalents where the impact to basic net income (loss) per share would be anti-dilutive.

 2. REVENUES

 Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

 The following table presents the Company's revenues disaggregated by revenue source for the years ended December 31, 2023 and 2022:

 Year Ended December 31,

 2023

 2022

 $
 133,368

 $
 117,206

 45,408

 42,588

 25,159

 17,804

 Eliminations

 ( 458
)

 ( 839
)

 Consolidated

 $

 $

 The Company's revenue is generally recognized at a point in time, typically when control of the promised goods or services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The Company measures revenue based on the consideration specified in the purchase order and revenue is recognized when the performance obligations are satisfied. If applicable, the transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation.

 For substantially all tower sales within the Company's Heavy Fabrications segment as well as certain 2023 sales within our Gearing segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition versus shipment. The Company recognizes revenue under these arrangements only when there is a substantive reason for the arrangement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance. During the 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, 2023 and 2022, 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. Since the projects are labor intensive, the Company uses labor hours as the input measure of progress for the applicable contracts. Within the Heavy Fabrications segment, the Company recognized revenue for contracts that meet over time criteria of $ 11,033 and $ 15,117 for the years ended December 31, 2023 and 2022, respectively. Contract assets are recorded when performance obligations are satisfied but the Company is not yet entitled to payment. Contract assets represent the Company's rights to consideration for work completed but not billed at the end of the period.

 The Company generally expenses sales commissions when incurred. These costs are recorded within selling, general and administrative expenses. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in the Company's statement of operations.

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

 3. EARNINGS PER SHARE

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

 For the Years Ended December 31,

 2023

 2022

 Basic earnings per share calculation:

 $
 7,649

 $
)

 Weighted average number of common shares outstanding

 21,188,669

 20,298,641

 Basic net income (loss) per share

 $
 0.36

 $
 ( 0.48
)

 Diluted earnings per share calculation:

 $
 7,649

 $
)

 Weighted average number of common shares outstanding

 21,188,669

 20,298,641

 Common stock equivalents:

 Non-vested stock awards (1)

 302,601

 —

 Weighted average number of common shares outstanding

 21,491,270

 20,298,641

 Diluted net income (loss) per share

 $
 0.36

 $
 ( 0.48
)

 ( 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.

 4. RECENT ACCOUNTING PRONOUNCEMENTS

 The Company reviews new accounting standards as issued. Although some of the accounting standards issued or effective in the current fiscal year may be applicable to it, the Company believes that none of the new standards have a significant impact on its consolidated financial statements.

 In June 2016, the 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. 2023 - 07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which requires additional disclosure of significant segment expenses on an annual and interim basis. 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.

 In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023 - 09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial statements.

 5. ALLOWANCE FOR DOUBTFUL ACCOUNTS

 The activity in the accounts receivable allowance from operations for the years ended December 31, 2023 and 2022 consists of the following:

 For the Year Ended December 31,

 2023

 2022

 Balance at beginning of period

 $

 $

 Bad debt expense

 —

 Write-offs

 ( 47
)

 —

 Other adjustments

 ( 30
)

 Balance at end of period

 $

 $

 6. INVENTORIES

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

 As of December 31,

 2023

 2022

 Raw materials

 $
 24,651

 $
 27,644

 Work-in-process

 10,390

 13,843

 Finished goods

 4,595

 4,916

 39,636

 46,403

 Less: Reserve

 ( 2,231
)

 ( 2,141
)

 Net inventories

 $
 37,405

 $
 44,262

 7. AMP CREDITS

 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. The IRA includes advanced manufacturing tax credits for manufacturers of eligible components, including wind and solar components. Manufacturers of wind components qualify for the AMP credits based on the total rated capacity, expressed on a per watt basis, of the completed wind turbine for which such component is designed. The credit applies to each component produced and sold in the U.S. beginning in 2023 through 2032. Wind towers within the Company's Heavy Fabrications segment are eligible for credits of $ 0.03 per watt for each wind tower produced. In calculating the eligible credit, the Company relied on the megawatt rating provided by the customer. 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.

 On December 21, 2023, the Company entered into an agreement to sell 2023 and 2024 AMP credits to a third party. At that time, the Company sold a portion of the gross 2023 credits in the amount of $ 6,952 and recognized a 6.5 % discount on the sale in the amount of $ 452 which was recognized in cost of sales. In addition, the Company wrote down the remaining receivable of $ 7,541 to net realizable value and recorded the expected loss on sale of $ 490 in cost of sales. The remaining 2023 AMP credit receivable was collected during the first quarter of 2024. 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.

 8. LONG-LIVED ASSETS

 The cost basis and estimated lives of property and equipment as of December 31, 2023 and 2022 are as follows:

 As of December 31,

 2023

 2022

 Life (in years)

 Land

 $
 1,423

 $
 1,423

 Buildings

 22,111

 20,792

 Machinery and equipment

 125,107

 120,893

 2 - 10

 Office furniture and equipment

 5,962

 5,705

 3 - 7

 Leasehold improvements

 9,068

 9,040

 Shorter of asset life or life of lease

 Construction in progress

 3,526

 2,360

 167,197

 160,213

 Less accumulated depreciation and amortization

 ( 120,074
)

 ( 114,894
)

 Total property and equipment

 $
 47,123

 $
 45,319

 As of December 31, 2023, the Company had commitments of $ 1,523 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.

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

 December 31, 2023

 December 31, 2022

 Remaining

 Remaining

 Weighted

 Weighted

 Net

 Average

 Net

 Average

 Cost

 Impairment

 Book

 Amortization

 Impairment

 Book

 Amortization

 Basis

 Amortization

 Charges

 Value

 Period

 Cost

 Amortization

 Charges

 Value

 Period

 Intangible assets:

 Noncompete agreements

 $

 $
 ( 170
)

 $
 —

 $
 —

 —

 $

 $
 ( 167
)

 $
 —

 $

 0.1

 Customer relationships

 15,979

 ( 7,842
)

 ( 7,592
)

 2.1

 15,979

 ( 7,581
)

 ( 7,592
)

 3.1

 Trade names

 9,099

 ( 7,580
)

 —

 1,519

 3.8

 9,099

 ( 7,180
)

 —

 1,919

 4.8

 Intangible assets

 $
 25,248

 $
 ( 15,592
)

 $
 ( 7,592
)

 $
 2,064

 3.3

 $
 25,248

 $
 ( 14,928
)

 $
 ( 7,592
)

 $
 2,728

 4.3

 Intangible assets represent the fair value assigned to definite-lived assets such as trade names and customer relationships. Estimated useful lives for intangibles assets range from 6 to 20 years. Intangible assets are amortized on a straight-line basis over their estimated useful lives, with a remaining life range from 2 to 4 years. Amortization expense was $ 664 and $ 725 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, estimated future amortization expense is as follows:

 2024

 $

 2025

 2026

 2027

 Total

 $
 2,064

 9. ACCRUED LIABILITIES

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

 2023

 2022

 Accrued payroll and benefits

 $
 5,051

 $
 3,110

 Accrued property taxes

 —

 Income taxes payable

 Accrued professional fees

 Accrued warranty liability

 Self-insured workers compensation reserve

 Long term incentive plan accrual

 —

 Accrued sales tax

 Accrued other

 Total accrued liabilities

 $
 6,477

 $
 4,313

 10. DEBT AND CREDIT AGREEMENTS

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

 2023

 2022

 Line of credit

 $
 4,657

 $
 —

 Other notes payable

 1,361

 1,094

 Long-term debt

 6,135

 7,217

 Total debt

 12,153

 8,311

 Less: current maturities

 ( 5,903
)

 ( 1,170
)

 Long-term debt, net of current maturities

 $
 6,250

 $
 7,141

 As of December 31, 2023, future annual principal payments on the Company's outstanding debt obligations were as follows:

 2024

 $
 5,903

 2025

 1,756

 2026

 1,267

 2027

 1,279

 2028

 1,198

 2029 and thereafter

 Total

 $
 12,153

 Credit Facilities

 On August 4, 2022, the Company entered into a credit agreement (as amended, 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, as amended, the "2022 Credit Facility"). 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. These costs are included in the "Other assets" line item of the Company's consolidated financial statements at December 31, 2023 and December 31, 2022.

 On February 8, 2023, the Company executed Amendment No. 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, 2022, 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. 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.

 As of December 31, 2023, there was $ 10,792 of outstanding indebtedness under the 2022 Credit Facility, with the ability to borrow an additional $ 21,714. As of December 31, 2023, the Company was in compliance with all financial covenants under the 2022 Credit Facility. As of December 31, 2023, the effective interest rate of the senior secured revolving credit facility was 7.64 % and the effective rate of the senior secured term loan was 7.89 %. 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 %.

 Other

 The Company has outstanding notes payable for capital expenditures in the amount of $ 1,361 and $ 1,094 as of December 31, 2023 and 2022, respectively, with $ 163 and $ 88 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, 2023 and 2022, respectively. The notes payable have monthly payments that range from $ 3 to $ 15 and an interest rate of 6 %. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates in September 2028.

 11. LEASES

 The Company leases various property and equipment under operating lease arrangements. The Company recognizes operating lease assets and liabilities on the balance sheet and discloses key information regarding leasing arrangements. The Company has elected to apply the short-term lease exception to all leases of one year or less.

 As of December 31, 2023, the right-of-use ("ROU") asset had a balance of $ 15,593 which is included in the "Operating lease right-of-use assets" line item of these consolidated financial statements and current and non-current lease liabilities relating to the ROU asset of $ 1,851 and $ 15,888, respectively, and are included in the "Current portion of operating lease obligations" and "Long-term operating lease obligations, net of current portion" line items of these consolidated financial statements. As of December 31, 2022, the ROU asset had a balance of $ 16,396 and current and non-current lease liabilities relating to the ROU asset of $ 1,882 and $ 16,696, respectively. The discount rates used for leases accounted for under Topic 842 are based on an interest rate yield curve developed for the leases in the Company's lease portfolio.

 Lease terms generally range from 3 to 15 years with renewal options for extended terms. Some of the Company's facility leases include options to renew. The exercise of the renewal options is at the Company's discretion. Therefore, the majority of renewals to extend the lease terms are not included in ROU assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and includes them in the lease term when the Company is reasonably certain to exercise them. Certain leases contain rent escalation clauses that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the lease term. Operating rental expense for the years ended December 31, 2023 and 2022 was $ 4,201 and $ 4,253, respectively.

 In addition, the Company has entered into finance lease arrangements to finance property and equipment and assumed finance lease obligations in connection with certain acquisitions. Finance rental expense for the years ended December 31, 2023 and 2022 was $ 1,790 and $ 1,639, respectively.

 Amortization expense recorded in connection with assets recorded under finance leases was $ 1,263 and $ 1,172 for the years ended December 31, 2023 and 2022, respectively.

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

 Year Ended December 31,

 2023

 2022

 Components of lease cost

 Finance lease cost components:

 Amortization of finance lease assets

 $
 1,263

 $
 1,172

 Interest on finance lease liabilities

 Total finance lease costs

 1,790

 1,639

 Operating lease cost components:

 Operating lease cost

 2,792

 2,839

 Short-term lease cost

 Variable lease cost (1)

 1,260

 Sublease income

 ( 212
)

 ( 191
)

 Total operating lease costs

 4,201

 4,253

 Total lease cost

 $
 5,991

 $
 5,892

 Supplemental cash flow information related to our operating leases is as follows for the twelve months ended December 31, 2023 and 2022:

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

 Operating cash outflow from operating leases

 $
 3,460

 $
 3,496

 Right-of-use assets obtained in exchange for new

 operating lease liabilities

 $

 $

 Weighted-average remaining lease term-finance leases at end of period (in years)

 3.2

 3.3

 Weighted-average remaining lease term-operating leases at end of period (in years)

 7.1

 8.1

 Weighted-average discount rate-finance leases at end of period

 6.1
 %

 6.0
 %

 Weighted-average discount rate-operating leases at end of period

 8.5
 %

 8.7
 %

 ( 1)

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

 Amortization associated with new right-of-use assets obtained in exchange for new operating lease liabilities is $ 5 and $ 20 for the years ended December 31, 2023 and 2022, respectively.

 As of December 31, 2023, future minimum lease payments under finance leases and operating leases were as follows:

 Finance

 Operating

 Total

 2024

 $
 2,416

 $
 3,351

 $
 5,767

 2025

 1,193

 3,447

 4,640

 2026

 3,442

 4,379

 2027

 3,144

 3,815

 2028

 3,153

 3,824

 2029 and thereafter

 7,803

 8,147

 Total lease payments

 6,232

 24,340

 30,572

 Less—portion representing interest

 ( 707
)

 ( 6,601
)

 ( 7,308
)

 Present value of lease obligations

 5,525

 17,739

 23,264

 Less—current portion of lease obligations

 ( 2,153
)

 ( 1,851
)

 ( 4,004
)

 Long-term portion of lease obligations

 $
 3,372

 $
 15,888

 $
 19,260

 12. COMMITMENTS AND CONTINGENCIES

 Legal Proceedings

 The Company is party to a variety of legal proceedings or claims that arise in the ordinary course of its business. The Company accrues for costs related to loss contingencies when such costs are probable and reasonably estimable. As of December 31, 2023, the Company is not aware of any material pending legal proceedings or threatened litigation that would have a material adverse effect individually or in the aggregate, on the Company's results of operations, financial condition or cash flows, although no assurance can be given with respect to the ultimate outcome of pending actions. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company's results of operations, financial condition or cash flows. It is possible that if one or more litigation matters were decided against the Company, the effects could be material to the Company's results of operations in the period in which the Company would be required to record or adjust the related liability and could also be material to the Company's financial condition and cash flows in the periods the Company would be required to pay such liability.

 Environmental Compliance and Remediation Liabilities

 The Company's operations and products are subject to a variety of environmental laws and regulations in the jurisdictions in which the Company operates and sells products governing, among other things, air emissions, wastewater discharges, the use, handling and disposal of hazardous materials, soil and groundwater contamination, employee health and safety, and product content, performance and packaging. Also, certain environmental laws can impose the entire cost or a portion of the cost of investigating and cleaning up a contaminated site, regardless of fault, upon any one or more of a number of parties, including the current or previous owners or operators of the site. These environmental laws also impose liability on any person who arranges for the disposal or treatment of hazardous substances at a contaminated site. Third parties may also make claims against owners or operators of sites and users of disposal sites for personal injuries and property damage associated with releases of hazardous substances from those sites.

 Collateral

 In select instances, the Company has pledged specific inventory and machinery and equipment assets to serve as collateral on related payable or financing obligations.

 Warranty Liability

 The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions.

 Liquidated Damages

 In certain customer contracts, the Company has agreed to pay liquidated damages in the event of qualifying delivery or production delays. These damages are typically limited to a specific percentage of the value of the product in question and dependent on actual losses sustained by the customer. When the damages are determined to be probable and estimable, the damages are recorded as a reduction to revenue. During 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.

 Workers' Compensation Reserves

 The Company entered into a guaranteed workers' compensation cost program at the beginning of the third quarter of 2016. The reserve prior to 2016 is immaterial. Although the ultimate outcome of these matters may exceed the amounts recorded and additional losses may be incurred, the Company does not believe that any additional potential exposure for such liabilities will have a material adverse effect on the Company's consolidated financial position or results of operations.

 Health Insurance Reserves

 As of December 31, 2023 and 2022, the Company had $ 742 and $ 360, respectively, accrued for health insurance liabilities. The Company self-insures for its health insurance liabilities, including establishing reserves for self-retained losses. Historical loss experience combined with actuarial evaluation methods and the application of risk transfer programs are used to determine required health insurance reserves. The Company takes into account claims incurred but not reported when determining its health insurance reserves. Health insurance reserves are included in accrued liabilities. While the Company's management believes that it has adequately reserved for these claims, the ultimate outcome of these matters may exceed the amounts recorded and additional losses may be incurred.

 Other

 As of December 31, 2023, approximately 18 % of the Company's employees were covered by two collective bargaining agreements with local unions at the Company's Cicero, Illinois and Neville Island, Pennsylvania locations. During November 2022, the Company negotiated a four -year collective bargaining agreement with the Neville Island union and it is expected to remain in effect through October 2026. A four -year collective bargaining agreement in regards to the Cicero, Illinois facility was negotiated in February 2022 and is expected to remain in effect through February 2026.

 13. FAIR VALUE MEASUREMENTS

 The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Financial instruments are assessed quarterly to determine the appropriate classification within the fair value hierarchy. Transfers between fair value classifications are made based upon the nature and type of the observable inputs. The fair value hierarchy is defined as follows:

 Level 1 — Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

 Level 2 — Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. For the Company's corporate and municipal bonds, although quoted prices are available and used to value said assets, they are traded less frequently.

 Level 3 — Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management's best estimate of what market participants would use in valuing the asset or liability at the measurement date.

 Fair value of financial instruments

 The carrying amounts of the Company's financial instruments, which include cash, A/R, accounts payable and customer deposits, approximate their respective fair values due to the relatively short-term nature of these instruments. Based upon interest rates currently available to the Company for debt with similar terms, the carrying value of the Company's long-term debt is approximately equal to its fair value.

 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.

 14. INCOME TAXES

 The provision for income taxes for the years ended December 31, 2023 and 2022 consists of the following:

 For the Years Ended Year Ended December 31,

 2023

 2022

 Current provision

 Federal

 $
 —

 $
 —

 State

 Total current provision

 Deferred provision

 Federal

 ( 1,758
)

 ( 2,102
)

 State

 ( 209
)

 ( 460
)

 Total deferred provision

 ( 1,967
)

 ( 2,562
)

 Increase in deferred tax valuation allowance

 1,957

 2,549

 Total provision for income taxes

 $

 $

 During the year ended December 31, 2023, the Company recorded an expense for income taxes of $ 241, compared to an expense for income taxes of $ 35 during the year ended December 31, 2022. On August 16, 2022, Congress enacted the Inflation Reduction Act which includes AMP credits for manufacturers of eligible components, including wind and solar components produced and sold in the US from 2023 through 2032. These credits will have no impact on income tax expense.

 The total change in the deferred tax valuation allowance was $ 1,957 and $ 2,549 for the years ended December 31, 2023 and 2022, respectively. The changes in the deferred tax valuation allowance in 2023 and 2022 were primarily the result of increases to the deferred tax assets pertaining to federal and state NOLs. Management believes that significant uncertainty exists surrounding the recoverability of deferred tax assets. As a result, the Company recorded a valuation allowance against the remaining deferred tax assets.

 The tax effects of the temporary differences and NOLs that give rise to significant portions of deferred tax assets and liabilities are as follows:

 As of Year Ended December 31,

 2023

 2022

 Noncurrent deferred income tax assets:

 Net operating loss carryforwards

 $
 75,235

 $
 74,807

 Accrual and reserves

 4,637

 3,531

 3,532

 3,834

 Other

 Total noncurrent deferred tax assets

 83,408

 82,176

 Valuation allowance

 ( 76,516
)

 ( 74,559
)

 Noncurrent deferred tax assets, net of valuation allowance

 6,892

 7,617

 Noncurrent deferred income tax liabilities:

 Fixed assets

 2,364

 2,584

 Intangible assets

 4,016

 4,344

 Total noncurrent deferred tax liabilities

 6,867

 7,602

 Net deferred income tax asset

 $

 $

 Valuation allowances of $ 76,516 and $ 74,559 have been provided for deferred income tax assets for which realization is uncertain as of December 31, 2023 and 2022, respectively. A reconciliation of the beginning and ending amounts of the valuation is as follows:

 Valuation allowance as of December 31, 2022

 $
 ( 74,559
)

 Gross increase for current year activity

 ( 1,957
)

 Valuation allowance as of Balance at December 31, 2023

 $
 ( 76,516
)

 As of December 31, 2023, the Company had federal and unapportioned state NOL carryforwards of approximately $ 290,233 of which $ 227,781 will begin to expire in 2026. The majority of the NOL carryforwards will expire in various years from 2028 through 2037. NOLs generated after January 1, 2018 will not expire.

 The reconciliation between the statutory U.S. federal income tax rate and the Company's effective income tax rate is as follows:

 For the Year Ended

 2023

 2022

 Statutory U.S. federal income tax rate

 21.0
 %

 21.0
 %

 State and local income taxes, net of federal income tax benefit

 0.6

 3.3

 Other permanent differences

 0.4

 ( 0.6
)

 Change in valuation allowance

 22.8

 ( 26.3
)

 162(m)

 0.5

 0.0

 Other

 0.2

 ( 2.1
)

 Other deferred adjustment

 ( 7.5
)

 4.3

 AMP credits

 ( 35.2
)

 0.0

 Effective income tax rate

 2.8
 %

 ( 0.4
)%

 The Company accounts for the uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position taken, or expected to be taken, in a tax return that is required to be met before being recognized in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. As of December 31, 2023, the Company had no unrecognized tax benefits that could impact the income tax expense.

 The Company files income tax returns in the U.S. federal and state jurisdictions. As of December 31, 2023, with few exceptions, the Company is no longer subject to federal or state income tax examinations by taxing authorities for years before December 31, 2019; however, taxing authorities have the ability to adjust NOL carryforwards in open tax years that may have been carried forward from closed years. The Company's 2008 and 2009 federal tax returns were examined in 2011 and no material adjustments were identified related to any of the Company's tax positions. Although these periods have been audited, they continue to remain open until all NOLs generated in those tax years have either been utilized or expire.

 Section 382 of the Internal Revenue Code of 1986, as amended (the "IRC"), generally imposes an annual limitation on the amount of NOL carryforwards and associated built-in losses that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. The Company's ability to utilize NOL carryforwards and built-in losses may be limited, under this section or otherwise, by the Company's issuance of common stock or by other changes in stock ownership. Upon completion of the Company's analysis of IRC Section 382, the Company has determined that aggregate changes in stock ownership have resulted in an annual limitation of $ 14,284 on NOLs and built-in losses available for utilization based on the triggering event in 2010. To the extent the Company's use of NOL carryforwards and associated built-in losses is significantly limited in the future due to additional changes in stock ownership, the Company's income could be subject to U.S. corporate income tax earlier than it would if the Company were able to use NOL carryforwards and built-in losses without such annual limitation, which could result in lower profits and the loss of the majority of the benefits from these attributes.

 In February 2013, the Company adopted a Stockholder Rights Plan, which was amended in February 2016 and approved by our stockholders (as amended, the "Rights Plan"), designed to preserve the Company's substantial tax assets associated with NOL carryforwards under Section 382 of the IRC. On February 7, 2019, the Board of Directors (the "Board") approved an amendment extending the Rights Plan for an additional three years, which was subsequently approved by the Company's stockholders at the 2019 Annual Meeting of Stockholders held on April 23, 2019 ( the "2019 Annual Meeting of Stockholders"). On February 3, 2022, the Board approved an amendment which included an extension of the Rights Plan for an additional three years, which was subsequently approved by the Company's stockholders at the 2022 Annual Meeting of Stockholders.

 The Rights Plan is intended to act as a deterrent to any person or group, together with its affiliates and associates, being or becoming the beneficial owner of 4.9 % or more of the Company's common stock and thereby triggering a further limitation of the Company's available NOL carryforwards. In connection with the adoption of the Rights Plan, the Board declared a non-taxable dividend of one preferred share purchase right (a "Right") for each outstanding share of the Company's common stock to the Company's stockholders of record as of the close of business on February 22, 2013. Since the record date, the Company has issued one Right with each newly issued share of its common stock. Until the distribution date (unless earlier redeemed or exchanged or upon expiration of the Rights, as applicable), the Rights will be evidenced by certificates of the Company's common stock and will be transferred only with such certificates. Each Right entitles its holder to purchase from the Company one one -thousandth of a share of the Company's Series A Junior Participating Preferred Stock at an exercise price of $ 7.26 per Right, subject to adjustment. As a result of the Rights Plan, any person or group that acquires beneficial ownership of 4.9 % or more of the Company's common stock without the approval of the Board would be subject to significant dilution in the ownership interest of that person or group. Stockholders who owned 4.9 % or more of the outstanding shares of the Company's common stock as of February 12, 2013 will not trigger the preferred share purchase rights unless they acquire additional shares after that date.

 15. SHARE-BASED COMPENSATION

 Overview of Share-Based Compensation Plan

 The Company has granted incentive stock options and other equity awards pursuant to previously Board approved equity incentive plans. Most recently, the Company has granted equity awards pursuant to the Broadwind Energy, Inc. 2015 Equity Incentive Plan, which was approved by the Board in February 2015 and by the Company's stockholders in April 2015. On February 19, 2019, the Board approved an Amended and Restated 2015 Equity Incentive Plan (as amended, the "2015 EIP,"), which, among other things, increased the number of shares of our common stock authorized for issuance under the 2015 EIP from 1,100,000 to 2,200,000. The amendment and restatement of the 2015 EIP was approved by the Company's stockholders at the 2019 Annual Meeting of Stockholders. On February 7, 2021, the Board approved the Second Amendment to the Amended and Restated 2015 Equity Incentive Plan which, among other things, increased the number of shares of our common stock authorized for issuance under the 2015 EIP from 2,200,000 to 3,200,000. The Second Amendment to the amendment and restatement of the 2015 EIP was approved by the Company's stockholders at the 2021 Annual Meeting of Stockholders. On March 2, 2023, the Board approved the Third Amendment to the Amended and Restated 2015 Equity Incentive Plan which, among other things, increased the number of shares of our common stock authorized for issuance under the 2015 EIP from 3,200,000 to 4,700,000. The Third Amendment to the amendment and restatement of the 2015 EIP was approved by the Company's stockholders at the 2023 Annual Meeting of Stockholders.

 The purposes of the Company's equity incentive plans are (a) to align the interests of the Company's stockholders and recipients of awards by increasing the proprietary interest of such recipients in the Company's growth and success; (b) to advance the interests of the Company by attracting and retaining officers, other employees, non-employee directors and independent contractors; and (c) to motivate such persons to act in the long-term best interests of the Company and its stockholders. Under the 2015 EIP, the Company may grant (i) non-qualified stock options; (ii) "incentive stock options" (within the meaning of Section 422 of the IRC); (iii) stock appreciation rights; (iv) restricted stock and restrictive stock units; and (v) performance awards.

 Stock Options. The exercise price of stock options granted under the 2015 EIP is equal to the closing price of the Company's common stock on the date of grant. Stock options generally become exercisable on the anniversary of the grant date, with vesting terms that may range from one to five years from the date of grant. Additionally, stock options expire ten years after the date of grant. The fair value of stock options granted is expensed ratably over their vesting term.

 Restricted Stock Units (RSUs). The granting of RSUs is provided for under the 2015 EIP. RSUs generally contain a vesting period of one to five years from the date of grant. The fair value of each RSU granted is equal to the closing price of the Company's common stock on the date of grant and is generally expensed ratably over the vesting term of the RSU award.

 Performance Awards (PSUs). The granting of PSUs is provided for under the 2015 EIP. Vesting of PSUs is conditioned upon the Company meeting applicable performance measures over the performance period. The fair value of each PSU granted is equal to the closing price of the Company's common stock on the date of grant and is generally expensed ratably over the term of the PSU award plan.

 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.

 There was no stock option activity during the years ended December 31, 2023 and 2022 and no stock options were outstanding as of December 31, 2023 and 2022.

 The following table summarizes information with respect to outstanding RSUs and PSUs accounted for as equity awards as of December 31, 2023 and 2022:

 Weighted Average

 Grant-Date Fair Value

 Number of Shares

 Per Share

 Unvested as of December 31, 2022

 822,737

 $
 2.37

 Granted

 492,665

 $
 4.10

 Vested

 ( 493,327
)

 $
 2.73

 Forfeited

 ( 134,869
)

 $
 3.98

 Unvested as of December 31, 2023

 687,206

 $
 3.03

 RSUs and PSUs are generally subject to ratable vesting over a three -year period. Compensation expense related to these service and performance based awards is generally recognized on a straight-line basis over the vesting period. During the years ended December 31, 2023 and 2022, 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, 2023 and 2022 as follows:

 For the Years Ended

 2023

 2022

 Share-based compensation expense:

 Cost of sales

 $

 $

 Selling, general and administrative

 1,434

 Net effect of share-based compensation expense on net income

 $

 $
 1,563

 Reduction in earnings per share:

 Basic earnings per share

 $
 0.04

 $
 0.08

 Diluted earnings per share

 $
 0.04

 $
 0.08

 ( 1)

 Income tax benefit is not illustrated because the Company is currently in a full tax valuation allowance position and an actual income tax benefit was not realized for the years ended December 31, 2023 and 2022. The result of the income (loss) situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the Company's valuation allowance.

 As of December 31, 2023, the Company estimates that pre-tax compensation expense for all unvested share-based RSUs and PSUs in the amount of approximately $ 1,467 will be recognized through the year 2025. The Company expects to satisfy the future distribution of shares of restricted stock by issuing new shares of common stock.

 16. 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's segments and their product offerings are summarized below:

 The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. The Company's most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve capacity utilization, reduce customer concentrations, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and adapters primarily to wind turbine manufacturers. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers ( 1650 tower sections), sufficient to support turbines generating more than 1,100 MW of power. The Company has expanded its production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and OEM components utilized in surface and underground mining, construction, material handling, O&G and other infrastructure markets. The Company has designed and manufactures a mobile, modular pressure reducing system for the compressed natural gas virtual pipeline market. The Company manufactures components for buckets, shovels, car bodies, drill masts and other products that support mining and construction markets. In other industrial markets, the Company provides crane components, pressure vessels, frames and other structures.

 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. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in addition to gearbox repair in Cicero, Illinois, and heat treatment and gearbox repair in Neville Island, Pennsylvania.

 The Company provides supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market. The Company has recently expanded into the U.S. 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.

 Corporate and Other

 "Corporate" includes the assets and SG&A expenses of the Company's corporate office. "Eliminations" comprises adjustments to reconcile segment results to consolidated results.

 The accounting policies of the reportable segments are the same as those referenced in Note 1, "Description of Business and Summary of Significant Accounting Policies" of these consolidated financial statements. Summary financial information by reportable segment is as follows:

 Corporate

 Eliminations

 Consolidated

 For the Year Ended December 31, 2023

 Revenues from external customers

 $
 133,368

 45,408

 24,701

 —

 —

 $

 Intersegment revenues

 —

 —

 —

 ( 458
)

 —

 Net revenues

 133,368

 45,408

 25,159

 —

 ( 458
)

 Operating income (loss)

 15,006

 1,846

 3,160

 ( 8,884
)

 11,139

 Depreciation and amortization

 3,517

 2,270

 —

 6,383

 Capital expenditures

 4,739

 1,398

 —

 6,405

 Total assets

 46,931

 48,599

 16,295

 58,487

 ( 35,156
)

 135,156

 Corporate

 Eliminations

 Consolidated

 For the Year Ended December 31, 2022

 Revenues from external customers

 $
 117,194

 42,572

 16,993

 —

 —

 $

 Intersegment revenues

 —

 ( 839
)

 —

 Net revenues

 117,206

 42,588

 17,804

 —

 ( 839
)

 Operating (loss) income

 ( 1,044
)

 ( 5,722
)

 ( 4
)

 ( 6,607
)

 Depreciation and amortization

 3,446

 1,978

 —

 6,060

 Capital expenditures

 2,601

 —

 3,098

 Total assets

 45,475

 51,944

 12,775

 224,856

 ( 190,510
)

 144,540

 The Company generates revenues entirely from transactions completed in the U.S. and its long-lived assets are all located in the U.S. All intercompany revenue is eliminated in consolidation. During 2023, one customer accounted for more than 10% of total net revenues. The customer, reported within the Heavy Fabrications segment, accounted for revenues of $ 88,144. 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.

 17. EMPLOYEE BENEFIT PLANS

 Retirement Savings and Profit Sharing Plans

 Retirement Savings and Profit Sharing Plans

 The Company offers a 401 (k) retirement savings plan to all eligible employees who may elect to contribute a portion of their salary on a pre-tax basis, subject to applicable statutory limitations. As of December 31, 2023, all employees were eligible to receive safe harbor matching contributions equal to 100 % of the first 3 % of the participant's elective deferral contributions and 50 % of the next 2 % of the participant's elective deferral contributions. The Company has the discretion, subject to applicable statutory requirements, to fund any matching contribution with a contribution to the plan of the Company's common stock. The Company periodically evaluates whether to fund the matching contribution in cash or in the Company's common stock. Under the plan, elective deferrals and basic Company matching is 100 % vested at all times.

 For the years ended December 31, 2023 and 2022, the Company recorded expense under these plans of approximately $ 1,394 and $ 1,247, respectively.

 Deferred Compensation Plan

 The Company maintains a deferred compensation plan for certain key employees and nonemployee directors, whereby certain wages earned, compensation for services rendered, and discretionary company-matching contributions may be deferred and deemed to be invested in the Company's common stock. Changes in the fair value of the plan liability are recorded as charges or credits to compensation expense. Compensation income (expense) associated with the deferred compensation plan recorded during the years ended December 31, 2023 and 2022 was $ 8 and $( 1). The fair value of the plan liability to the Company is included in accrued liabilities in the Company's consolidated balance sheets. As of December 31, 2023 and 2022, the fair value of plan liability to the Company was $ 23 and $ 15, respectively.

 In addition to the employee benefit plans described above, the Company participates in certain customary employee benefits plans, including those which provide health and life insurance benefits to employees.

 18. 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:

 2023

 First

 Second

 Third

 Fourth

 $
 48,873

 $
 50,843

 $
 57,163

 $
 46,598

 Gross profit

 6,976

 8,333

 10,167

 7,032

 Operating income

 1,282

 2,216

 5,367

 2,274

 Net income

 1,415

 4,394

 1,071

 Net income per share:

 Basic

 $
 0.04

 $
 0.07

 $
 0.21

 $
 0.05

 Diluted

 $
 0.04

 $
 0.07

 $
 0.20

 $
 0.05

 2022

 First

 Second

 Third

 Fourth

 $
 41,844

 $
 50,012

 $
 44,843

 $
 40,060

 Gross profit

 2,012

 2,394

 3,748

 2,556

 Operating loss

 ( 2,073
)

 ( 1,912
)

 ( 520
)

 ( 2,102
)

 Net loss

 ( 2,404
)

 ( 2,703
)

 ( 1,772
)

 ( 2,851
)

 Net loss per share:

 Basic

 $
 ( 0.12
)

 $
 ( 0.13
)

 $
 ( 0.09
)

 $
 ( 0.14
)

 Diluted

 $
 ( 0.12
)

 $
 ( 0.13
)

 $
 ( 0.09
)

 $
 ( 0.14
)

 INDEX TO EXHIBITS

 Exhibit
 Number

 Description

 3.1

 Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008)

 3.2

 Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed August 23, 2012)

 3.3

 Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed May 6, 2020)

 3.4

 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)

 4.1

 Section 382 Rights Agreement dated as of February 12, 2013 between the Company and Equiniti Trust Company, as rights agent, which includes the Form of Rights Certificate as Exhibit B thereto (incorporated by reference to Exhibit 1 to the Company's Registration Statement on Form 8-A filed February 13, 2013)

 4.2

 Certificate of Designation of Series A Junior Participating Preferred Stock of the Company (incorporated by reference to Exhibit 2 to the Company's Registration Statement on Form 8-A filed February 13, 2013)

 4.3

 First Amendment to Section 382 Rights Agreement dated as of February 2, 2016 between the Company and Equiniti Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 8, 2016)

 4.4

 Second Amendment to Section 382 Rights Agreement dated as of February 7, 2019 between the Company and Equiniti Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 12, 2019)

 4.5

 Third Amendment to Section 382 Rights Agreement dated as of February 3, 2022 between the Company and Equiniti Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 3, 2022

 4.6

 Description of Securities (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019)

 10.1

 Lease Agreement dated December 26, 2007 between Tower Tech Systems Inc. and City Centre, LLC (incorporated by reference to Exhibit 10.3 to the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007)

 10.2

 Amended and Restated Lease for Industrial/Manufacturing Space dated as of May 1, 2010 between Tower Tech Systems Inc. and City Centre, LLC (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010)

 10.3

 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010)

 10.4

 Broadwind Energy, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit A to the Company's Schedule 14A filed on March 12, 2015)

 10.5

 Form of Executive Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010)

 10.6

 Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012)

 10.7

 Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012)

 10.8

 Form of Stock Option Agreement (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012)

 10.9

 Form of Restricted Stock Unit Award Agreement (Non-Employee Directors) (incorporated by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015)

 10.10

 Form of Restricted Stock Unit Award Agreement (Extended Executive Team) (incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015)

 10.11

 Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015)

 10.12

 Broadwind Energy, Inc. 2015 Equity Incentive Plan Restricted Stock Unit Award Notice (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018)

 10.13

 Severance and Non-Competition Agreement, dated as of May 4, 2018, between the Company and Eric Blashford (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed May 3, 2018)

 10.14

 Form of Performance Award Agreement (Broadwind Energy, Inc. 2015 Equity Incentive Plan) (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019)

 10.15

 Form of Performance Award Agreement (Amended and Restated Broadwind Energy, Inc. 2015 Equity Incentive Plan) (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019)

 10.16

 Amended and Restated Broadwind Energy, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit D to the Company's Schedule 14A filed on March 11, 2019)

 10.17

 Form of Performance Award Agreement (Amended and Restated Broadwind, Inc. 2015 Equity Incentive Plan) (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020)

 10.18

 First Amendment to Amended and Restated Broadwind Energy, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020)

 10.19

 Second Amendment to Amended and Restated Broadwind, Inc. 2015 Equity Incentive Plan (incorporated by reference to Appendix B to Amendment No. 1 to the Company's Schedule 14A filed April 5, 2021)

 10.20

 Third Amendment to Amended and Restated Broadwind, Inc. 2015 Equity Incentive Plan (incorporated by reference to Appendix B to the Company's Schedule 14A filed April 7, 2023)

 10.21

 Credit Agreement, dated as of August 4, 2022, by and among Broadwind, Inc., Brad Foote Gear Works, Inc., Broadwind Industrial Solutions, LLC, Broadwind Heavy Fabrications, Inc., 5100 Neville Road, LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed August 8, 2022)

 10.22

 Guaranty, dated as of August 4, 2022, by Broadwind, Inc., Brad Foote Gear Works, Inc., Broadwind Industrial Solutions, LLC, Broadwind Heavy Fabrications, Inc. and 5100 Neville Road, LLC in favor of Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed August 8, 2022)

 10.23

 Severance and Non-Competition Agreement dated as of August 10, 2022, between Broadwind, Inc. and Thomas A. Ciccone (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed August 12, 2022)

 10.24

 Sales Agreement, dated September 12, 2022, by and among Broadwind, Inc., Roth Capital Partners, LLC and H.C. Wainwright & Co. (incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed September 12, 2022)

 10.25

 Amendment No. 1 to Credit Agreement and Limited Waiver, dated as of February 8, 2023, by and among Broadwind Inc., Brad Foote Gear Works, Inc., Broadwind Industrial Solutions, LLC, Broadwind Heavy Fabrications, Inc., 5100 Neville Island, LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed February 14, 2023)

 10.26

 Tax Credit Transfer Agreement, dated as of December 21, 2023, by and between Broadwind Heavy Fabrications Inc. and MarketAxess Holding Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed December 27, 2023)

 10.27

 Guaranty, dated as of December 21, 2023, 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 December 27, 2023)

 Subsidiaries of the Registrant (filed herewith)

 Consent of RSM LLP (filed herewith)

 31.1

 Rule 13a-14(a) Certification of Chief Executive Officer (filed herewith)

 31.2

 Rule 13a-14(a) Certification of Chief Financial Officer (filed herewith)

 32.1

 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 32.2

 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 Broadwind, Inc. Policy on Recoupment of Incentive-Based Compensation (filed herewith)

 Indicates management contract or compensation plan or arrangement.

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the fifth day of March, 2024.

 BROADWIND, INC.

 By:

 /s/ Eric B. Blashford

 Eric B. Blashford
 President and Chief Executive Officer
 (Principal Executive Officer)

 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons (including a majority of the board of directors) on behalf of the registrant and in the capacities and on the dates indicated.

 SIGNATURE

 TITLE

 DATE

 /s/ Eric B. Blashford

 President, Chief Executive Officer, and Director (Principal Executive Officer)

 Eric B. Blashford

 /s/ Thomas A. Ciccone

 Vice President and Chief Financial Officer (Principal Financial Officer)

 Thomas A. Ciccone

 /s/ David P. Reiland

 March 5 2024

 David P. Reiland

 /s/ Philip J. Christman

 Philip J. Christman

 /s/ Thomas A. Wagner

 Thomas A. Wagner

 /s/ Cary B. Wood

 Cary B. Wood

 /s/ Sachin M. Shivaram

 Sachin M. Shivaram

 /s/ Jeanette A. Press

 Jeanette A. Press