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0001120370
0001120370
2022-02-03
2022-02-03
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 3, 2022
BROADWIND, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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001-34278
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88-0409160
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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3240 South Central Avenue, Cicero, Illinois 60804
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (708) 780-4800
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.001 par value
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BWEN
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The NASDAQ Capital Market
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On February 3, 2022, the Board of Directors of Broadwind, Inc. (the “Company”) approved and the Company entered into a Third Amendment to Section 382 Rights Agreement (the “Third Amendment”), which amends the Section 382 Rights Agreement, dated as of February 12, 2013 (the “Rights Agreement”), between the Company and Equiniti Trust Company, formerly Wells Fargo, National Association (“Equiniti”), as rights agent, as amended by the First Amendment to Section 382 Rights Agreement dated as of February 5, 2016 (the “First Amendment”) and the Second Amendment to Section 382 Rights Agreement dated as of February 7, 2019 (the “Second Amendment”). Equiniti also serves as the Company’s transfer agent.
The Third Amendment (i) increases the purchase price for each one-thousandth of a share of the Company’s Series A Junior Participating Preferred Stock, par value $0.001 per share, from $4.25 to $7.26 and (ii) extends the Final Expiration Date (as defined in the Rights Agreement) from February 22, 2022 to February 22, 2025. In addition, the Third Amendment provides that the Rights (as defined in the Rights Agreement) will no longer be exercisable if the Company’s stockholders do not approve the Third Amendment at the Company’s 2022 Annual Meeting of Stockholders.
The Third Amendment was not adopted as a result of, or in response to, any effort to acquire control of the Company. The Third Amendment has been adopted in order to preserve for the Company’s stockholders the long-term value of the Company’s net operating loss carry-forwards for United States federal income tax purposes and other tax benefits.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the
Rights Agreement, which was filed with the Securities and Exchange Commission in a Current Report on Form 8-K on February 13, 2013, the
First Amendment, which was filed with the Securities and Exchange Commission in a Current Report on Form 8-K on February 8, 2016, the
Second Amendment, which was filed with the Securities and Exchange Commission in a Current Report on Form 8-K on February 12, 2019, and the Third Amendment, a copy of which is attached as Exhibit 4.1 hereto and incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 3.03 by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
EXHIBIT INDEX
Exhibit
Number Description
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4.1
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5.1
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Broadwind, Inc.
(Registrant)
By: /s/ Eric B. Blashford .
Eric B. Blashford
President, Chief Executive Officer, and Interim Chief Financial Officer
Date: February 3, 2022
Exhibit 4.1
THIRD AMENDMENT TO SECTION 382 RIGHTS AGREEMENT
THIS THIRD AMENDMENT TO SECTION 382 RIGHTS AGREEMENT (this “Amendment”) is made and entered into as of February 3, 2022, by and between Broadwind Energy, Inc., a Delaware corporation (the “Company”), and Equiniti Trust Company, formerly Wells Fargo, National Association, as rights agent (the “Rights Agent”).
WHEREAS, the Company and the Rights Agent entered into a Section 382 Rights Agreement dated as of February 12, 2013, which was subsequently amended pursuant to a First Amendment to Section 382 Rights Agreement dated as of February 5, 2016 and a Second Amendment to Section 382 Rights Agreement dated as of February 7, 2019 (as amended, the “Agreement”);
WHEREAS, Section 27 of the Agreement provides, among other things, that, prior to the Stock Acquisition Date (as defined in the Agreement) the Company and the Rights Agent may from time to time supplement or amend the Agreement in any respect without the approval of any holders of Rights (as defined in the Agreement);
WHEREAS, no Stock Acquisition Date has occurred on or prior to the date hereof;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined it is in the best interests of the Company and its stockholders to amend the Agreement as set forth herein; and
WHEREAS, the Board has authorized and approved this Amendment;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company hereby agrees to amend the Agreement as follows and directs the Rights Agent to execute this Amendment:
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1.
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The introductory paragraph of the Agreement is hereby amended as follows:
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This SECTION 382 RIGHTS AGREEMENT, dated as of February 12, 2013 (this “Agreement”), by and between Broadwind, Inc., a Delaware corporation (the “Company”) and Equiniti Trust Company, formerly Wells Fargo, National Association (the “Rights Agent”).
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2.
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Section 7 of the Agreement is hereby amended as follows:
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(a) Clause (a)(i) shall be removed and replaced with the following:
(i) the Close of Business on February 22, 2025 (the “Final Expiration Date”),
(b) Clause (a)(vi) shall be removed and replaced with the following:
(vi) the Close of Business on the first Business Day following the date on which the Inspector of Election for the Company’s 2022 Annual Meeting of Stockholders certifies that the vote on the amendment to this Agreement dated as of February 3, 2022 at such meeting (with the required vote for such approval to be described in the Company’s proxy statement relating to such Annual Meeting) reflects that stockholder approval of such amendment has not been received (the earliest of (i), (ii), (iii), (iv), (v) and (vi) being herein referred to as the “Expiration Date”).
(c) Clause (b) shall be removed and replaced with the following:
The Purchase Price for each one one-thousandth of a share of Preferred Stock pursuant to the exercise of a Right shall be $7.26, and shall be subject to adjustment from time to time as provided in Section 11 and shall be payable in accordance with paragraph (c) below.
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3.
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Exhibit B to the Agreement is hereby amended as follows:
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(a) All references to “Broadwind Energy, Inc.” shall be removed and replaced with “Broadwind, Inc.”
(b) The reference to “FEBRUARY 22, 2022” on page B-1 shall be removed and replaced with “FEBRUARY 22, 2025.”
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4.
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Exhibit C to the Agreement is hereby amended as follows:
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(a) The first sentence of Exhibit C shall be removed and replaced with the following:
On February 12, 2013, the board of directors of Broadwind, Inc. (“Broadwind”) adopted a Section 382 stockholders rights plan and declared a dividend distribution of one right for each outstanding share of our common stock to stockholders of record at the Close of Business on February 22, 2013.
(b) The second sentence of Exhibit C shall be removed and replaced with the following:
Each right entitles its holder, under the circumstances described below, to purchase from us one one-thousandth of a share of our Series A Junior Participating Preferred Stock at an exercise price of $7.26 per right, subject to adjustment.
(c) The first bullet point in the eleventh paragraph of Exhibit C shall be removed and replaced with the following:
• the close of business on February 22, 2025;
(d) The last bullet point in the eleventh paragraph of Exhibit C shall be removed and replaced with the following:
• the close of business on the first business day following the date on which the Inspector of Election for Broadwind’s 2022 Annual Meeting of Stockholders certifies that the vote on the amendment, dated as of February 3, 2022, to the Section 382 Rights Agreement at such meeting reflects that stockholder approval has not been received.
(e) The thirteenth paragraph of Exhibit C shall be removed and replaced with the following:
For example, at an exercise price of $7.26 per right, each right not owned by an acquiring person (or by certain related parties) following a flip-in event would entitle its holder to purchase $14.52 worth of common stock (or other consideration, as noted above) for $7.26. Assuming that the common stock had a per share value of $3.63 at that time, the holder of each valid right would be entitled to purchase four shares of common stock for $14.52.
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5.
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This Amendment is effective as of the date first set forth above.
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6. Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Agreement.
7. This Amendment may be executed in any number of counterparts; each such counterpart shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same instrument. A signature to this Amendment executed and/or transmitted electronically shall have the same authority, effect and enforceability as an original signature.
8. Except as modified hereby, the Agreement is reaffirmed in all respects, and all references therein to “the Agreement” shall mean the Agreement, as modified hereby.
* * * * *IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.
Attest: BROADWIND, INC.
By: /s/ Thomas A. Ciccone By: /s/ Eric B. Blashford
Thomas A. Ciccone Eric B. Blashford
Vice President President, Chief Executive Officer, and Interim Chief Financial Officer
Attest: EQUINITI TRUST COMPANY
By: /s/ Martin Knapp By: /s/ Angela M. Stewart
Name: Martin Knapp Name: Angela M. Stewart
Title: Senior Vice President Title: Assistant Vice President
Exhibit 5.1
Broadwind Approves Third Extension of
Section 382 Rights Agreement
Cicero, Ill., February 3, 2022 — Broadwind (NASDAQ: BWEN), announced today that its Board of Directors has approved a third amendment to the Company’s Section 382 Rights Agreement (the “Rights Plan”) designed to preserve Broadwind’s substantial tax assets associated with net operating loss carryforwards (“NOLs”) under Section 382 of the Internal Revenue Code (“Section 382”). The amendment extends the Rights Plan through February 22, 2025. The Rights Plan is similar to plans adopted by other public companies with significant NOLs.
Broadwind’s CEO Eric Blashford stated, “The Rights Plan was designed to serve the interests of all shareholders by helping to protect Broadwind’s valuable tax assets, which can be used to offset approximately $260 million of future taxable income.”
Pursuant to U.S. federal income tax rules, Broadwind’s use of certain tax assets could be substantially limited if the Company experiences an “ownership change” (as defined in Section 382). In general, an ownership change occurs if the ownership of Broadwind’s stock by “5 percent shareholders” increases by more than 50 percent over the lowest percentage owned by such shareholders at any time during the prior three years on a rolling basis. Broadwind intends to submit the amendment to the Rights Plan for shareholder ratification at its 2022 Annual Meeting of Stockholders.
The “Rights” (as defined in the Rights Plan) will expire on the earliest of (i) the close of business on February 22, 2025, (ii) the time at which the Rights are redeemed or exchanged under the Rights Plan, (iii) the repeal of Section 382 or any successor statute and the Board’s determination that the Rights Plan is no longer necessary for the preservation of the Company’s NOLs, (iv) the beginning of a taxable year of the Company to which the Board determines that no NOLs may be carried forward, or (v) the failure to obtain shareholder ratification of the amendment to the Rights Plan at Broadwind’s 2022 Annual Meeting of Stockholders.
Additional information regarding the amendment to the Rights Plan will be contained in a Form 8-K and in an amendment to Registration Statement on Form 8-A that Broadwind is filing with the Securities and Exchange Commission
ABOUT BROADWIND
Broadwind (NASDAQ: BWEN) is a precision manufacturer of structures, equipment and components for clean tech and other specialized applications. With facilities throughout the U.S., our talented team is committed to helping customers maximize performance of their investments—quicker, easier and smarter. Find out more at www.bwen.com
FORWARD-LOOKING STATEMENTS
This release 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, 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. Forward looking statements include any statement that does not directly relate to a current or historical fact. 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.
Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following: (i) 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 and state renewable portfolio standards, as well as new or continuing tariffs on steel or other products imported into the United States; (ii) 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; (iii) our ability to continue to grow our business organically and through acquisitions; (iv) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows; (v) the sufficiency of our liquidity and alternate sources of funding, if necessary; (vi) our ability to realize revenue from customer orders and backlog; (vii) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow; (viii) the economy and the potential impact it may have on our business, including our customers; (ix) the state of the wind energy market and other energy and industrial markets generally and the impact of competition and economic volatility in those markets; (x) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (xi) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers with access to lower cost steel; (xii) the effects of the change of administrations in the U.S. federal government; (xiii) our ability to successfully integrate and operate companies and to identify, negotiate and execute future acquisitions; (xiv) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended; (xv) the limited trading market for our securities and the volatility of market price for our securities; and (xvi) 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.
CORPORATE CONTACT
Noel Ryan, IRC
investor@bwen.com
