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BROADWIND ENERGY, INC. (NASDAQ:BWEN) Files An 8-K Entry into a Material Definitive Agreement

BROADWIND ENERGY, INC. (NASDAQ:BWEN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

Item 2.03 is incorporated herein.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Beginning on April 13, 2020, Broadwind Energy, Inc. (the “Company”) and its subsidiaries received funds under notes and related documents (“PPP Loans”) with CIBC Bank, USA under the Paycheck Protection Program (the “PPP”) which is part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration. The Company received total proceeds of $9.5 million from the PPP Loans. In accordance with the requirements of the PPP, the Company intends to use proceeds from the PPP Loans primarily for payroll costs. The PPP Loans are scheduled to mature starting on April 5, 2022, have a 1.00% interest rate and are subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration under the PPP. Under the terms of the PPP, certain amounts of the PPP Loans may be forgiven if they are used for qualifying expenses as described in the CARES Act.

As of April 15, 2020, the Company had approximately $23.5 million of liquidity, including $11.0 million of cash on hand and $12.5 million availability under the Company’s existing revolving credit facility.  The Company had approximately $30.6 million of outstanding indebtedness, which includes $17.3 million of borrowings under the Company’s existing revolving credit facility, $9.5 million of borrowings under the PPP Loans and $3.8 million of other debt and finance leases.

The foregoing summary description of the PPP Loans does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the PPP Loans, copies of which will be filed with the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2020.

Item 8.01. Other Events.

Supplemental Risk Factor

As a result of the recent outbreak of a novel coronavirus (COVID-19), we have added the following supplemental risk factor to our existing risk factors, as disclosed on the Company’s Annual Report on Form 10-K for the year ending December 31, 2019:

The outbreak of COVID-19 may have material adverse effects on our operations.

We did not experience significant impacts from the novel coronavirus disease (known as COVID-19) in the first quarter of 2020, in part, because our facilities currently operate as essential businesses based on the customers and markets served.   However, due to the continuing breadth and severity of the pandemic, our operations, suppliers and customers have been and may continue to be affected by varying degrees by COVID-19, which could result in a material adverse effect on our business.  In response to the virus, we are following the guidance provided by the U.S. Centers for Disease Control and Prevention to protect the continued safety and welfare of our employees.

The effects of COVID-19 have resulted in a widespread crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products. Depending on the breadth of the disruptions and the success of our efforts to mitigate the impact of these events on our operations, our business, operating and financial results could be materially adversely affected. The extent to which COVID-19 will impact our financial position and operating results will depend on future developments, which are highly uncertain and cannot be predicted and many of which are not within our control. Such developments may include, but are not limited to, the spread of the virus, the severity and duration of the outbreak, the impact on the world economy and the actions that may result from the outbreak including the responses of governmental authorities and the scientific community.

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About BROADWIND ENERGY, INC. (NASDAQ:BWEN)

Broadwind Energy, Inc. provides technologically advanced products and services to energy, mining and infrastructure sector customers, primarily in the United States. The Company is engaged primarily in United States wind energy industry. The Company operates through two segments: Towers and Weldments, and Gearing. The Company’s Towers and Weldments segment manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for multiple megawatt (MW) wind turbines. The Company’s Gearing segment engineers, builds and remanufactures precision gears and gearing systems for oil and gas, wind energy, mining, steel and other industrial applications. Within the United States wind energy industry, it provides products and services to wind turbine manufacturers. It also provides precision gearing and specialty weldments to a range of industrial customers for oil and gas, mining, steel and other industrial applications.

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