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Note 17 - Subsequent Event
3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Subsequent Events [Text Block]

NOTE 17 SUBSEQUENT EVENT

 

Subsequent to the quarter end, on April 30, 2026, (the “Closing Date”) Broadwind Heavy Fabrications, Inc. (“BHF”), a wholly owned subsidiary of the Company, entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Freeman Enclosure Systems, LLC (the “Buyer”), a wholly-owned subsidiary of IES Holdings, Inc., pursuant to which BHF sold the real property and certain assets contained therein which comprise the Seller’s production facility located in Abilene, Texas (the “Facility”), including equipment, machinery, other personal property, specified service contracts, and permits (collectively, the “Purchased Assets”), to the Buyer for an aggregate purchase price of up to $19,500 in cash, subject to certain purchase price adjustments, (the “Transaction”).  On the Closing Date, BHF also entered into a short term lease agreement with the Buyer, pursuant to which (a) BHF leased the Facility and the Purchased Assets back from the Buyer for a nominal below-market rent for a term that is expected to end on September 5, 2026 and (b) the Buyer received an option to purchase certain excluded manufacturing equipment located in the Facility at a future date (the “Lease”).

 

A portion of the purchase price, $1,000 (the “Escrow Payment”), was delivered into escrow by the Buyer upon closing of the Transaction. The Escrow Payment will be held in escrow pursuant to the terms of an Escrow Agreement by and among the Seller, the Buyer and Centennial Title, LLC, as the escrow agent, and will be released to BHF when BHF vacates the Facility at the end of the Lease term, subject to certain adjustments and allocations as set forth in the Lease.

 

The Purchase Agreement contains customary representations, warranties and covenants of BHF and the Buyer. BHF’s representations and warranties survive until the later of the 90 day anniversary of the Closing Date or the date on which BHF turns over possession of the Facility under the Lease. The Purchase Agreement also contains customary covenants and agreements by and among the parties, as well as customary mutual indemnification obligations.

 

On April 30, 2026, in addition to the normal required progress payments, the Company made a repayment of $1,420 on the outstanding senior secured term loan under the 2022 Credit Agreement in conjunction with the sale of the Abilene production facility.

 

The Company expects the sale of the Facility along with the disposition of Manitowoc to meet discontinued operations reporting criteria in the second quarter of 2026 and the Company has determined that the sale represents a strategic shift  for the Company that will have a major effect on the Company’s operations. As such, the results of operations of the wind business within the Company’s Heavy Fabrications segment will be reclassified to discontinued operations on the condensed consolidated statements of operations and retrospectively for all periods presented beginning in the second quarter of 2026. In addition, the assets and liabilities will be presented separately on the Company’s condensed consolidated balance sheets for both current and prior periods beginning in the second quarter of 2026.