Techprecision Corp 10-K for FY2026
Techprecision Corp (TPCS)
About this 10-K
Techprecision Corp filed this 10-K on June 25, 2026, covering the fiscal year ended March 31, 2026 (FY2026).
Headline figures
Fiscal year ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $31.64M
- down 7.0% from $34.03M a year earlier
- Net loss
- $1.66M
- compared with a net loss of $2.75M a year earlier
- Diluted EPS
- -$0.17
- compared with -$0.29 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the fiscal year ended
For the transition period from __________________ to __________________
Commission File Number:
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of |
| (I.R.S. Employer |
incorporation or organization) |
| Identification No.) |
|
| |
| ||
(Address of principal executive offices) |
| (Zip Code) |
|
|
|
Registrant’s telephone number, including area code |
| ( |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | | Ticker symbol(s) | | Name of each exchange on which registered |
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
☐ Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.
☒
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).
☒
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 | ☐ |
☒ |
|
| 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 for complying with any new or revised financial accounting standards 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).
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of September 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $
The number of shares outstanding of the registrant’s common stock as of June 16, 2026 was
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
2
PART I
Item 1. Business.
Our Business
We are a manufacturer of precision, large-scale fabricated and machined metal structural components and systems. We offer a full range of services required to transform raw materials into precision finished products. We sell these finished products to customers in two main industry groups: defense and precision industrial. Our mission is to be a leading end-to-end service provider to our customers by furnishing custom, fully integrated solutions for complete products that require custom fabrication, precision machining, assembly, integration, inspection, non-destructive evaluation, and testing.
We work with our customers to manufacture products in accordance with the customers’ drawings and specifications. Our work complies with specific national and international codes and standards applicable to our industry. We believe that we have earned our reputation through outstanding technical expertise, attention to detail, and a total commitment to quality and excellence in customer service.
We have two wholly owned subsidiaries that are each a reportable segment, Ranor and Stadco. Each reportable segment focuses on the manufacture and assembly of specific components, primarily for defense and other precision industrial customers. For discussion of the operating results of our reporting business segments, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 16, Segment Information, in the Notes to the Consolidated Financial Statements under “Item 8. Financial Statements and Supplementary Data.”
About Us
We are a Delaware corporation organized in 2005 under the name Lounsberry Holdings II, Inc. On February 24, 2006, we acquired all of the issued and outstanding capital stock of our wholly owned subsidiary Ranor, Inc., or “Ranor.” On March 6, 2006, following the acquisition of Ranor, we changed our corporate name to TechPrecision Corporation. Ranor, together with its predecessors, has been in continuous operation since 1956. From February 24, 2006, until our acquisition of Stadco in August 2021, our primary business has been the business of Ranor.
On August 25, 2021, the Company completed its acquisition of Stadco, a company in the business of manufacturing high-precision parts, assemblies and tooling for aerospace, defense, research and commercial customers, pursuant to that certain stock purchase agreement with Stadco New Acquisition, LLC, Stadco Acquisition, LLC, Stadco and each equity holder of Stadco Acquisition, LLC. On August 25, 2021, pursuant to the stock purchase agreement, and upon the terms and subject to the conditions therein, the Company, through Stadco New Acquisition, LLC, acquired all of the issued and outstanding stock of Stadco from Stadco Acquisition, LLC. As a result, Stadco is now our wholly owned indirect subsidiary.
Our executive offices are located at 1 Bella Drive, Westminster, Massachusetts 01473, and our telephone number is (978) 874-0591. Our website is www.techprecision.com. Information on our website, or any other website, is not incorporated by reference in this annual report.
References in this annual report to the “Company,” “we,” “us,” “our” and similar words refer to TechPrecision Corporation and its subsidiaries, unless the context indicates otherwise, while references to “TechPrecision” refer to TechPrecision Corporation and not its subsidiaries.
General
TechPrecision, through our wholly owned subsidiaries, is a manufacturer of large-scale metal fabricated and machined precision components and equipment. These components are used primarily in the defense and aerospace industries, and secondarily in the precision industrial markets. All our operations and customers are in the United States.
We work with our customers to manufacture components in accordance with the customers’ drawings and specifications. Our work complies with specific military specifications and standards as well as national and international codes and standards required by our customers. We believe that we have earned our reputation through outstanding technical expertise, attention to detail, and a total commitment to quality and excellence in customer service.
3
The manufacturing operations of our Ranor subsidiary are situated on approximately 65 acres in Westminster, Massachusetts. Leveraging our 145,000 square foot facilities, Ranor provides a full range of custom solutions to transform material into precision finished welded components and precision finished machined components up to 100 tons: manufacturing engineering, materials management and traceability, high-precision heavy fabrication (in-house fabrication operations include cutting, press and roll forming, welding, heat treating, assembly, blasting and painting), heavy high-precision machining (in-house machining operations include CNC programming, finishing, and assembly), QC inspection including portable CMM, NonDestructive Testing, and final packaging.
All manufacturing at Ranor is performed in accordance with customer requirements. Ranor is an ISO 9001:2015 certificate holder. Ranor is a U.S. defense-centric company with over 95% of its revenue in the defense sector. Ranor is registered and compliant with regulations under the International Traffic in Arms Regulation (“ITAR”).
The manufacturing operations of our Stadco subsidiary are situated in an industrial self-contained multi-building complex comprised of approximately 183,000 square feet under roof in Los Angeles, California. Stadco manufactures large mission-critical components on several high-profile military aircraft, military helicopter, and military space programs. Stadco has been a critical supplier to a blue-chip customer base that includes some of the largest OEMs and prime contractors in the defense and aerospace industries. Stadco also manufactures tooling, molds, fixtures, jigs and dies used in the production of defense-centric aircraft components.
Our Stadco subsidiary, similar to Ranor, provides a full range of custom solutions: manufacturing engineering, materials management and traceability, high-precision fabrication (in-house fabrication operations include waterjet cutting, press forming, welding, and assembly) and high-precision machining (in-house machining operations include CNC programming, finishing, and assembly), QC inspection including both fixed and portable CMM NonDestructive Testing, and final packaging. In addition, Stadco features a large electron beam welding cell, and two NonDestructive Testing work cells, a unique mission-critical technology set.
All manufacturing at Stadco is performed in accordance with customer requirements. Stadco is an AS 9100 D and ISO 9001:2015 certificate holder and a NADCAP NonDestructive Testing certificate holder. Stadco is a U.S. defense-centric company with almost all of its revenue in the defense sector. Stadco is registered and compliant with ITAR.
All of the Company’s operations, assets, and customers are located in the U.S. Executive management and the financial reporting function is based in Westminster, Massachusetts through our two reportable segments, Ranor and Stadco.
Products
We manufacture a wide variety of products pursuant to customer contracts and based on individual customer needs. We can also provide manufacturing engineering services to assist customers in optimizing their engineering designs for manufacturing efficiency. We do not design the products we manufacture but rather manufacture according to “build-to-print” requirements specified by our customers. Accordingly, we do not distribute the products that we manufacture on the open market, and we do not market any specific products on an on-going basis. We do not own the intellectual property rights to any proprietary marketed product, and we do not manufacture products in anticipation of orders. Manufacturing operations do not commence on any project before we receive a customer’s purchase order. We only consider contracts that cover specific products within the capability of our resources.
We primarily target repeating custom programs with relatively mature and stable designs in order to provide long-term solutions for our customers. The multi-unit work is repeat work or a single product with multiple quantity releases. Secondarily, our activities include a variety of both multi-unit and one-off requirements. The one-off work is typically either a prototype or a unique, one-of-a-kind component.
Changes in regulations and market demand for our manufacturing expertise can be significant and sudden and require us to adapt to the needs of the customers that we serve. Understanding this dynamic, we focus on the defense industry in order to reliably pivot with our defense customers to jointly develop the capability to transform our workforce to manufacture components in accordance with our own and our external customers’ changing requirements.
We primarily serve customers in the defense and aerospace markets, secondarily in the precision industrial sectors. Within these sectors, we have manufactured custom components for U.S. Navy submarines and aircraft carriers, USMC military helicopters, defense and aerospace programs.
4
Our contracts are generated both through negotiation with the customer and from bids made pursuant to a request for proposal. Our ability to receive contract awards is dependent upon the contracting party’s perception of such factors as our ability to perform on time, our history of performance, including quality, our financial condition, and our ability to price our services competitively.
Source of Supply
Our manufacturing operations are partly dependent on the availability of raw materials. Most of our contracts with customers require the use of customer-supplied raw materials in the manufacture of their product. Accordingly, raw material requirements vary with each contract and are dependent upon customer requirements and specifications. We have established relationships with numerous suppliers. When we do buy raw materials, we endeavor to establish alternate sources of material supply to reduce our dependency on any one supplier and strive to maintain a minimal raw material inventory.
Our projects include the manufacturing of products from various traditional as well as specialty metal alloys. These materials may include, but are not limited to steel, nickel, monel, inconel, aluminum, stainless steel, and other alloys. Certain of these materials are subject to long-lead time delivery schedules. In the fiscal year ended March 31, 2026, or “fiscal 2026”, three suppliers accounted for 10% or more of our purchased material. In the fiscal year ended March 31, 2025, or “fiscal 2025”, four suppliers accounted for 10% or more of our purchased material.
Marketing
While we have significant customer concentration, we endeavor to broaden our customer base as well as the industries we serve. We market to our existing customer base and initiate contacts with new potential customers through various sources including personal contacts, customer referrals, and referrals from other businesses. A significant portion of our business is the result of competitive bidding processes and from contract negotiation. We believe that the reputation we have developed with our current customers represents an important part of our marketing effort.
Requests for quotations received from customers are reviewed to determine the specific requirements and our ability to meet such requirements. Quotations are prepared by estimating the material and labor costs and assessing our current backlog to determine our delivery commitments. Competitive bid quotations are submitted to the customer for review and award of contract. Negotiation bids typically require the submission of additional information to substantiate the quotation. The bidding process can range from several weeks for a competitive bid to several months for a negotiation bid before the customer awards a contract.
Research and Product Development
Many of our customers generate drawings illustrating their projected unit design and technology requirements. Our research and product development activities are limited and focused on delivering robust production solutions to such projected unit design and technology requirements. We follow this product development methodology in all our major product lines. For these reasons, we incurred no expenses for research and development in fiscal 2026 and fiscal 2025.
Principal Customers
A significant portion of our business is generated by a small number of major customers. The balance of our business consists of discrete projects for numerous other customers. As industry and market demand changes, our major customers may also change. Our ten largest customers generated 92% and 96% of our total revenue in fiscal 2026 and fiscal 2025, respectively. Our group of largest customers can change from year to year. Our largest single customer in fiscal 2026 and fiscal 2025 was a prime defense contractor and accounted for 15% and 22% of our revenue, respectively. Our defense customers are engaged in the development, delivery and support of advanced defense and aerospace systems, including the U.S. Navy’s Virginia-class fast attack submarine program and the U.S. Navy’s Columbia-class ballistic missile submarine program. We also manufacture large flight-critical components on several high-profile commercial and military aircraft programs, including military helicopters.
5
We historically have experienced, and continue to experience, customer concentration. A significant loss of business from our largest customer or a combination of several of our significant customers could result in lower operating profitability and/or operating losses if we are unable to replace such lost revenue from other sources. The revenue derived from all of our customers in the designated industry groups for the fiscal years ended March 31, 2026 and 2025 are displayed in the table below:
(dollars in thousands) | | 2026 | | 2025 | | ||||||
Revenue | | Amount | | Percent | | Amount | | Percent | | ||
Defense | | $ | 31,223 | | 99 | % | $ | 33,599 |
| 99 | % |
Precision Industrial | | $ | 421 | | 1 | % | $ | 432 |
| 1 | % |
The following table displays revenue generated by individual customers in specific industry sectors that accounted for 10% or more of our revenue in fiscal 2026 and 2025:
(dollars in thousands) | | 2026 | | 2025 |
| ||||||
Revenue | | Amount | | Percent | | Amount | | Percent | | ||
Customer A | | $ | 3,570 | | 11 | % | $ | 5,795 |
| 17 | % |
Customer B | | $ | * | | * | % | $ | 3,327 |
| 10 | % |
Customer C | | $ | 4,733 | | 15 | % | $ | 4,947 |
| 15 | % |
Customer D | | $ | 3,403 | | 11 | % | $ | * |
| * | % |
Customer E | | $ | 4,756 | | 15 | % | $ | 7,671 | | 22 | % |
Customer F | | $ | * | | * | % | $ | 5,003 | | 15 | % |
* | Less than 10% of total |
The following table depicts total revenue generated by the individual customers in the above table by segment that accounted for 10% or more of our revenue in fiscal 2026 and 2025:
(dollars in thousands) | | 2026 | | 2025 |
| ||||||
Revenue | | Amount | | Percent | | Amount | | Percent |
| ||
Ranor | | $ | 8,068 |
| 25 | % | $ | 15,576 |
| 46 | % |
Stadco | | $ | 8,394 |
| 27 | % | $ | 11,167 |
| 33 | % |
On March 31, 2026, we had a backlog of orders totaling $52,198. We expect to deliver the backlog over the course of the next two to three fiscal years. The comparable backlog on March 31, 2025 was $48,625.
Competition
We face competition from both domestic and foreign entities in the manufacture of metal-fabricated and machined precision components and equipment. The industry in which we compete is fragmented with no one dominant player. We compete against companies that are both larger and smaller than us in size and capacity. Some competitors may be better known, have greater resources at their disposal, and have lower production costs. For certain products, being a domestic manufacturer may play a role in determining whether we are awarded a certain contract. For example, we face limited foreign competition for our defense products. For other products and markets, we may be competing against foreign manufacturers who have a lower cost of production. If a contracting party has a relationship with a vendor and is required to place a contract for bids, the preferred vendor may provide or assist in the development of the specification for the product which may be tailored to that vendor’s products. In such an event, we would be at a disadvantage in seeking to obtain that contract. We believe that customers focus on such factors as the quality of work, the reputation of the vendor, the perception of the vendor’s ability to meet the required schedule, and price in selecting a vendor for their products. We believe that our strengths in these areas allow us to compete effectively, and that as a result, we are one of a select group of companies that can provide the products and services we are able to provide.
6
Government Regulations
We provide a significant portion of our manufacturing services as a subcontractor to prime government contractors. Such prime government contractors are subject to government procurement and acquisition regulations which give the government the right to terminate these contracts for convenience, certain renegotiation rights, and rights of inspection. Any government action which affects our customers who are prime government contractors would affect us.
Because of the nature and use of our products, we are subject to compliance with quality assurance programs, compliance with which is a condition for our ability to bid on government contracts and subcontracts. We believe we are in compliance with all of these programs.
We are also subject to laws and regulations applicable to manufacturing operations, such as federal and state occupational health and safety laws, and environmental laws, which are discussed in more detail below under “-Environmental Compliance.”
Environmental Compliance
We are subject to U.S. federal, state and local environmental laws and regulations that pertain to the use, disposal and cleanup of substances regulated by those laws and the filing of reports with environmental agencies, and we are subject to periodic inspections to monitor our compliance. We believe that we are currently compliant with applicable environmental regulations. As part of our normal business practice, we are required to develop and file reports and maintain logbooks that document all environmental issues within our organization. We may engage outside consultants to assist us in keeping current on developments in environmental regulations. Expenditures for environmental compliance purposes during fiscal 2026 and 2025 were not material.
Occupational Health and Safety Laws
Our business and operations are subject to numerous federal, state, and local laws and regulations intended to protect our employees. Due to the nature of manufacturing, we are subject to substantial regulations related to safety in the workplace. In addition to the requirements of the state government of Massachusetts and California and the local governments having jurisdiction over our plants in those states, we must comply with federal health and safety regulations, the most significant of which are enforced by the Occupational Safety and Health Administration (“OSHA”).
Further, our manufacturing and other business operations and facilities are subject to additional federal, state, or local laws or regulations including supply chain transparency, conflict minerals sourcing and disclosure, transportation and other laws or regulations relating to health and safety requirements, including COVID-19 safety and prevention. Our operations are also subject to federal, state, and local labor laws relating to employee privacy, wage and hour matters, overtime pay, harassment and discrimination, equal opportunity and employee leaves and benefits. We are also subject to existing and emerging federal and state laws relating to data security and privacy.
It is our policy and practice to comply with all legal and regulatory requirements and our procedures and internal controls are designed to promote such compliance. Expenditures for compliance with occupational health and safety laws and regulations during fiscal 2026 and 2025 were not material.
Intellectual Property Rights
At present we have no registered intellectual property rights other than certain trademarks for our name and other business and marketing materials. Over the course of our business, we develop know-how for use in the manufacturing process. Although we have non-disclosure policies in place with respect to our personnel and in our contractual relationships, we cannot assure you that we will be able to protect our intellectual property rights with respect to this know-how.
Human Capital Resources
The success of our business depends in large part on our ability to attract, retain, and develop a workforce of skilled employees at all levels of our organization. We provide our employees with base wages and salaries that we believe are competitive and consistent with employee positions, and work with local, regional, and state-wide agencies to facilitate workforce hiring and development initiatives.
As of March 31, 2026, we had 160 employees, all of whom are full-time employees. At Ranor and Stadco, 28 and 17 employees are salaried, and 64 and 51 employees are hourly, respectively. None of our employees are represented by a labor union.
7
Available Information
We maintain a website at techprecision.com. Information on our website is not incorporated by reference into this Annual Report on Form 10-K and does not constitute a part of this Annual Report on Form 10-K. We make available, free of charge, on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. These reports are also available at the SEC’s website at www.sec.gov.
Item 1A. Risk Factors.
Our business, results of operations and financial condition and the industry in which we operate are subject to various risks. We have listed below (not necessarily in order of importance or probability of occurrence) the most significant risk factors applicable to us, but they do not constitute all the risks that may be applicable to us. New risks may emerge from time to time, and it is not possible for us to predict all potential risks or to assess the likely impact of all risks. More information concerning certain of these risks is contained in other sections of this Annual Report on Form 10-K, including in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Risks Related to Our Business and Industry
Our auditors have indicated that there is substantial doubt about our ability to continue as a going concern.
Our liquidity is highly dependent on the availability of financing facilities and our ability to maintain a gross profit and operating income. The Company is the borrower under the amended and restated loan agreement dated as of August 25, 2021, as further amended, or the “Loan Agreement,” with Beacon Bank & Trust, successor by merger to Berkshire Bank, or the “Bank”. Under the Loan Agreement, the Bank continued to provide the Ranor Term Loan and the Stadco Term Loan (each as defined below) and the revolving line of credit, or the “Revolver Loan”. The Company has determined that it was not in compliance with the certain financial covenants in the Loan Agreement as of March 31, 2026. Additionally, our management believes it is probable that the Company will not be in compliance with certain financial covenants in future periods. Without a waiver, noncompliance with these financial and related covenants permits the lender to demand repayment in full of all outstanding amounts from the Company. In addition, the lender retains the right to act on covenant violations that occur after the date of delivery of any waiver. If the lender were to demand repayment, the Company would not be able to pay the obligation because the Company does not have existing facilities or sufficient cash on hand to satisfy these obligations.
In order to satisfy the future financial covenants in the Loan Agreement, we must efficiently increase utilization of our manufacturing capacity at our Stadco subsidiary and improve the manufacturing process, such that our direct labor hours (inputs) allow us to recognize more revenue over time (outputs) and improve job performance. We plan to closely monitor our expenses and, if required, reduce operating costs and capital spending to enhance liquidity. There can be no assurance that we will be successful in these efforts. If we are unable to achieve compliance in the future with the financial covenants in the Loan Agreement by making operational changes to our business, then we might alternatively seek additional waivers or forbearances from our lender prior to any covenant violation or raise additional funds in one or more equity financing transactions. Any covenant waiver or forbearance may lead to increased costs, increased interest rates, additional restrictive covenants and the imposition of other lender protections that impact us negatively. There can be no assurance that we would be able to obtain waivers or forbearances in a timely manner, on acceptable terms, or at all. Alternatively, the terms of any equity financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities by us, or the possibility of such issuance, may cause the market price of our common stock to decline. The sale of additional shares of our common stock, or securities convertible into shares of our common stock, would also dilute all of our stockholders.
There was $7,031 outstanding under the Loan Agreement on March 31, 2026, and the lender under the Loan Agreement has agreed to extend the maturity date of the revolver loan to September 15, 2026. The original maturity date of the revolver loan under the loan agreement was December 20, 2023. While the maturity date of the revolver loan has been extended, it is due within the next 12 months and, if we are not able to renew or further extend the maturity date of the revolver loan, we will need to raise additional funds in order meet our obligations with respect to the revolver loan and sustain our operations.
8
In addition to extending the maturity date of the revolver loan, the Company acknowledges that a certain event of default has occurred and is continuing under the Loan Agreement because of the Company’s failure to satisfy the Leverage Ratio (as defined in the Loan Agreement) as of March 31, 2026. The lender reserves any and all rights and remedies available to it under the Loan Agreement, including, without limitation, its right to choose to accelerate and demand the outstanding indebtedness evidenced by the loan documents, and to seek immediate repayment in full.
In the event that the lender exercises its right to accelerate the repayment of this indebtedness as the result of one or more covenant breaches, or the maturity date of the revolver loan is not renewed or further extended, we do not expect to have funds available to repay these amounts in full unless we raise additional funds or find alternate financing, which, along with the uncertainty associated with the recurring operating losses at Stadco, raises substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements included in this Annual Report on Form 10-K are issued. The consequences of any default, waiver or forbearance, or the securing of additional equity financing could materially and adversely affect our business, financial condition, and results of operations.
We may pursue acquisitions and other strategic transactions and/or investments to complement or expand our business that may not be successful.
From time to time, we may explore opportunities to purchase or invest in other businesses or assets that we believe will complement, enhance or expand our current business or that might otherwise offer us growth opportunities, including opportunities that may differ from the Company’s current business. Any transactions that we are able to identify and complete may involve risks, including the commitment of significant capital, the incurrence of indebtedness, the payment of advances, the diversion of management’s attention and resources from our existing business to develop and integrate the acquired or combined business, the inability to successfully integrate such business or assets into our operations, litigation or other claims in connection with acquisitions or against companies we invest in or acquire, the risk of not achieving the intended results and the exposure to losses if the underlying transactions or ventures are not successful.
Whether or not completed, the announcement and pendency of the potential acquisitions could cause disruptions in our business; and current and prospective employees may experience uncertainty about their future roles, which might adversely affect the ability to retain key employees; and uncertainty regarding the completion of the acquisition may cause customers, suppliers, distributors, vendors, strategic partners or others to delay or defer entering into contracts, make other decisions or seek to change or cancel existing business relationships; and the attention of management may be directed toward the completion of the acquisition.
We face strong competition in our markets.
We face competition from both domestic and foreign manufacturers in each of the markets we serve. No single company dominates the industry in which we operate. Our competitors include international, national, and local manufacturers, some of whom may have greater financial, manufacturing, marketing, and technical resources than we do, or greater penetration in or familiarity with a particular geographic market than we have.
Some competitors may be better known or have greater resources at their disposal, and some may have lower production costs. For certain products, being a domestic manufacturer may play a role in determining whether we are awarded a certain contract. For other products, we may be competing against foreign manufacturers who have a lower cost of production. If a contracting party has a relationship with a vendor and is required to place a contract for bids, the preferred vendor may provide or assist in the development of the specification for the product which may be tailored to that vendor’s products. In such an event, we would be at a disadvantage in seeking to obtain that contract. We believe that customers focus on such factors as quality of work, reputation of the vendor, perception of the vendor’s ability to meet the required schedule, and price in selecting a vendor for their products. Some of our customers have moved manufacturing operations or product sourcing overseas. To remain competitive, we will need to invest continuously in our manufacturing capabilities and customer service, and we may need to reduce our prices, particularly with respect to customers in industries that are experiencing downturns, which may adversely affect our results of operations. We cannot provide assurance that we will be able to maintain our competitive position in each of the markets that we serve, and any failure by us to compete could have a material adverse effect on our business, financial condition and results of operations.
9
Because most of our contracts are individual purchase orders and not long-term agreements, there is no guarantee that we will be able to generate a similar amount of revenue in the future.
We must bid or negotiate each of our contracts separately, and when we complete a contract, there is generally no continuing source of revenue under that contract. As a result, we cannot assure you that we will have a continuing stream of revenue from any contract. Our failure to generate new business on an ongoing basis would materially impair our ability to operate profitably. Additionally, our reliance on individual purchase orders has historically caused, and may in future periods cause, our results of operations and cash flows to vary considerably and unpredictably from period to period. Because a significant portion of our revenue is derived from services rendered for the defense industry, our operating results may suffer from conditions affecting this sector, including any budgeting, economic or other trends that have the effect of reducing the requirements for our services. Labor shortages, government tariffs, and/or supply chain disruptions in the broader economy may also reduce demand for our products and services because of delays or disruptions in our customers’ ability to continue their own production, which could have a material adverse effect on our business, financial condition, or results of operation.
Our business may be impacted by external factors that we may not be able to control, including health emergencies like epidemics or pandemics, government tariffs, and geopolitical conflicts.
War, civil conflict, terrorism, natural disasters, and public health issues including domestic or international pandemics, have caused and could cause damage or disruption to domestic or international commerce by creating economic or political uncertainties. Additionally, volatility in the financial markets, government tariffs, and disruptions or downturns in other areas of the global or U.S. economies could negatively impact our business. These events could result in a decrease in demand for our products, make it difficult or impossible to deliver orders to customers or receive materials from suppliers, affect the availability or pricing of energy sources or result in other severe consequences that may or may not be predictable. As a result, our business, financial condition and results of operations could be materially adversely affected.
We could also be negatively affected by health emergencies, including epidemics or pandemics. The effects of any such health emergency and related governmental responses could include extended disruptions to supply chains and capital markets, reduced labor availability and productivity and a prolonged reduction in demand for our services and overall global economic activity. This could result in the Company experiencing significant disruptions, which could have a material adverse effect on our results of operations, financial condition, and cash flows.
To date, the company has not experienced any material effects from certain conflicts in the middle east and the war between Russia and Ukraine. However, because of our reliance on certain raw materials and energy supplies, an economic environment of rising government tariffs, costs and interest rates could have an unfavorable impact on our operations and financial condition.
Additionally, events involving limited liquidity, defaults, non-performance or other adverse developments that affect banks, financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, may lead to market-wide liquidity problems, which could adversely impact our business, our business partners, or industry in ways that we cannot predict at this time.
Because of our dependence on a limited number of customers, our failure to generate major contracts from a small number of customers may impair our ability to operate profitably.
We have, in the past, been dependent each year on a small number of customers who generate a significant portion of our business, and these customers change from year to year. For the fiscal year ended March 31, 2026, our four largest customers accounted for 52% of our revenue. For the fiscal year ended March 31, 2025, our five largest customers accounted for 79% of our revenue. In addition, our backlog on March 31, 2026 and 2025 was $52,198 and $48,625, respectively, of which 75% and 73% was attributable to four customers.
10
As a result, we may have difficulty operating profitably if there is a default in payment by any of our major customers, we lose an existing order, or we are unable to generate orders from new or existing customers. Furthermore, to the extent that any one customer accounts for a large percentage of our revenue, the loss of that customer could materially affect our ability to operate profitably. For example, our single largest customer for the fiscal years ended March 31, 2026 and 2025 accounted for 15% and 22%, respectively, of our revenue for both years. The loss of these customers could have a material adverse effect on our business and may impair our ability to operate profitably. We anticipate that our dependence on a limited number of customers in any given fiscal year will continue for the foreseeable future. There is always a risk that existing customers will elect not to do business with us in the future or will experience financial difficulties. If our customers experience financial difficulties or business reversals, or lose orders or anticipated orders, which would reduce or eliminate the need for the products which they ordered from us, they could be unable or unwilling to fulfill their contracts with us.
There is also a risk that our customers will attempt to impose new or additional requirements on us that reduce the profitability of the orders placed by those customers with us. Further, even if the orders are not changed, these orders may not generate margins equal to our recent historical or targeted results. If we do not book more orders with existing customers, or develop relationships with new customers, we may not be able to increase, or even maintain, our current level of revenue, which could have an adverse effect on our financial condition and results of operations.
Our backlog figures may not accurately predict future revenue or recognizable revenue.
We expect to fill most items of backlog within the next three years. However, because orders may be rescheduled or canceled and a significant portion of our revenue is derived from a small number of customers, backlog is not necessarily indicative of future revenue levels. Moreover, we cannot be sure of when during the future 36-month period we will be able to recognize revenue corresponding to our backlog nor can we be certain that revenues corresponding to our backlog will not fall into periods beyond the 36-month horizon.
Any decrease in the availability or increase in the cost of raw materials could materially affect our earnings.
The availability of certain critical raw materials, such as steel, nickel, monel, inconel, aluminum, stainless steel, and other alloys, is subject to factors that are not within our control. At any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis, at prices and other terms acceptable to us, or at all.
If suppliers increase the price of critical raw materials or are unwilling or unable to meet our demand, we may not have alternative sources of supply. In addition, to the extent that we have existing contracts or have quoted prices to customers and accepted customer orders for products prior to purchasing the necessary raw materials, we may be unable to raise the price of products to cover all or part of the increased cost of the raw materials.
The manufacture of some of our products is a complex process and requires long lead time. As a result, we may experience delays or shortages in the supply of raw materials. If we are unable to obtain adequate and timely deliveries of the required raw materials, we may be unable to complete our manufacturing projects and deliver finished products on a timely basis. This could cause us to lose revenue, incur additional costs, delay new product introductions, or suffer harm to our reputation.
In addition, costs of certain critical raw materials have been volatile due to factors beyond our control. Raw material costs are included in our contracts with customers, but in some cases, we are exposed to changes in raw material costs from the time purchase orders are placed to when we purchase the raw materials for production. Changes in business conditions could adversely affect our ability to recover rapid increases in raw material costs and may adversely affect our results of operations.
Additionally, changes in international trade duties and other aspects of international trade policy, both in the U.S. and abroad, could materially impact the cost of raw materials. For example, as of early 2026, the U.S. imposed a 50% tariff under Section 232 of the Trade Expansion Act of 1962, as amended, on steel and aluminum products imported into the U.S., with certain exceptions. Subsequent changes to tariffs announced by the U.S. could further impact steel and aluminum costs and decrease supply availability.
In response to the invasion of Ukraine by the military forces of the Russian Federation, the United States, the European Union and other jurisdictions have imposed sanctions that, among other things, prohibit the importation of a wide array of commodities and products from Russia, which is a major global supplier of nickel. Any increase in nickel, steel and/or aluminum prices that is not offset by an increase in our prices could have an adverse effect on our business, financial position, results of operations or cash flows. In addition, if we are unable to acquire timely nickel, steel or aluminum supplies, we may need to decline bid and order opportunities, which could also have an adverse effect on our business, financial position, results of operations or cash flows.
11
All our manufacturing and production is done at two locations, in California and Massachusetts. We may be exposed to significant disruption to our business because of unforeseeable developments at either geographic location.
We operate at two manufacturing and production facilities, one in Westminster, Massachusetts and the other in Los Angeles, California. It is possible that we could experience prolonged periods of reduced production due to unforeseen catastrophic events occurring in or around our manufacturing and production facilities. It is also possible that operations could be disrupted due to other unforeseen circumstances such as power outages, explosions, fires (including wildfires), floods, earthquakes, accidents, and severe weather conditions. As a result, we may be unable to shift manufacturing capabilities to alternate locations, accept materials from suppliers, meet customer shipment needs or address other severe consequences that may be encountered, and we may suffer damage to our reputation. Our financial condition and results of our operations could be materially adversely affected were such events occurred.
Our manufacturing processes are complex, must constantly be upgraded to remain competitive and depend upon critical, high-cost equipment that may require costly repair or replacement.
It is possible that we could experience prolonged periods of reduced production due to unplanned equipment failures, and we could incur significant repair or replacement costs in the event of those failures.
We must make regular capital investments and changes to our manufacturing processes to lower production costs, improve productivity, manufacture new or improved products and remain competitive. We may not be able to take advantage of business opportunities or respond to competitive pressures if we fail to update, replace or make additions to our equipment or our manufacturing processes in a timely manner. The cost of repairing or replacing much of our equipment or facilities could be significant. We cannot be certain that we will have sufficient internally generated cash or acceptable external financing to make necessary capital expenditures in the future.
Our production facilities are energy-intensive, and we rely on third parties to supply energy consumed at our production facilities.
The prices for and availability of electricity, natural gas, oil, and other energy resources are subject to volatile market conditions. These market conditions often are affected by political and economic factors beyond our control, including the imposition of sanctions on certain countries from selling significant sources of oil and natural gas into key international markets, which can impact the global price of these commodities. Disruptions or lack of availability in the supply of energy resources could temporarily impair our ability to operate our production facility. Further, increases in energy costs, or changes in costs relative to energy costs paid by competitors, may adversely affect our profitability. To the extent that these uncertainties cause suppliers and customers to be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition.
The dangers inherent in our operations and the limits on insurance coverage could expose us to potentially significant liability costs and materially interfere with the performance of our operations.
The fabrication of large steel structures involves potential operating hazards that can cause personal injury or loss of life, severe damage to and destruction of property and equipment and suspension of operations. The failure of such structures during and after installation can result in similar injuries and damage. Although we believe that our insurance coverage is adequate, there can be no assurance that we will be able to maintain adequate insurance in the future at rates we consider reasonable or that our insurance coverage will be adequate to cover future claims that may arise. Claims for which we are not fully insured may adversely affect our working capital and profitability. In addition, changes in the insurance industry have generally led to higher insurance costs and decreased availability of coverage. The availability of insurance that covers risks we and our competitors typically insure against may decrease, and the insurance that we are able to obtain may have higher deductibles, higher premiums, and more restrictive policy terms.
12
Our operating results may fluctuate significantly from quarter to quarter, and we cannot be certain that we will maintain profitability in every quarterly reporting period.
Our operating results historically have been difficult to predict and have at times significantly fluctuated from quarter to quarter due to a variety of factors, many of which are outside of our control. Among these factors includes the fact that most of our contracts are individual purchase orders and not long-term agreements. Additionally, our ability to meet project completion schedules for an individual project and record the corresponding revenue over-time can fluctuate and cause significant changes in our revenue and other financial results. As a result of these factors, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our operating expenses do not always vary directly with revenue and may be difficult to adjust in the short term. As a result, if revenue for a particular quarter is below our expectations, we may not be able to proportionately reduce operating expenses for that quarter, and therefore such a revenue shortfall would have a disproportionate effect on our operating results for that quarter.
We recognize revenue for our defense contracts and some commercial contracts over-time under Accounting Standards Codification (ASC) 606 which requires significant management judgement. Errors made to estimates of revenue and costs could result in overstated or understated profits or losses, subject to adjustment.
For most of our defense industry contracts, we recognize revenue over time as we perform services or deliver goods. In situations where control transfers or services are performed over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. We recognize revenue over time based on the transfer of control of the promised goods or services to the customer, or at a point in time. This transfer will occur over time when the Company’s performance does not create an asset that has an alternative use to the Company, and we have an enforceable right to payment for performance completed to date. Otherwise, control to the promised goods or services transfers to customers at a point in time.
Due to the size and nature of the work required to be performed on many of our contracts, the estimation of total revenue and cost at completion is complicated and subject to many variables. Contract costs include material, labor, and subcontracting costs, as well as an allocation of indirect costs. We are required to make assumptions regarding the number of labor hours required to complete a task, the complexity of the work to be performed, the availability and cost of materials and performance by our subcontractors. For contract change orders, claims or similar items, we apply judgment in estimating the amounts and assessing the potential for realization of revenue over time. Contract modifications - as well as other changes in estimates of revenue, costs, and profits on performance obligations - are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes in current and prior periods. If our estimate of total contract costs or our determination of whether the customer agrees that a milestone is achieved is incorrect, our revenue could be overstated or understated, and the profits or loss reported could be subject to adjustment. If our revenues and costs require adjustment, our stock price could decline.
Demand in our end-use markets can be cyclical, impacting on the demand for the products we produce.
Demand in our end-use markets, including companies in the defense and precision industrial sectors, can be cyclical in nature and sensitive to general economic conditions, competitive influences, and fluctuations in inventory levels throughout the supply chain. Our revenue is sensitive to the market conditions present in the industries in which the ultimate consumers of our products operate, which in some cases have been highly cyclical and subject to substantial downturns.
As a result of the cyclical nature of these markets, we have experienced, and in the future, we may experience significant fluctuations in our revenue and results of operations with respect to a substantial portion of our total product offering, and such fluctuations could be material and adverse to our overall financial condition, results of operations and liquidity.
13
We could be adversely affected by reductions in defense spending.
Because certain of our products are used in a variety of military applications, including ships, submarines and helicopters, we derive most of our revenue from the defense industry. In fiscal 2026 and 2025, approximately 99% of our revenue in both years were derived from customers in the defense industry. Although many of the programs under which we sell products to prime U.S. government contractors extend several years, they are subject to annual funding through congressional appropriations. While spending authorizations for defense-related programs by the U.S. government have increased since 2020 due to inflation, technology development, and geopolitical conflicts abroad, these spending levels may not be sustainable and could significantly decline. Future levels of expenditures, authorizations, and appropriations for programs we support may decrease or shift to programs in areas where we do not currently provide services. Changes in spending authorizations, appropriations, and budgetary priorities could also occur due to a shift in the number, and intensity, of potential and ongoing conflicts, the rapid growth of the federal budget deficit, increasing political pressure to reduce overall levels of government spending, shifts in spending priorities from national defense as a result of competing demands for federal funds, or other factors. It is also possible that recent geopolitical conflicts abroad causes a reorientation of U.S. defense spending away from the naval submarine programs from which we derive substantial portions of our revenue towards land-based military projects, which could involve fewer programs in which our products would be needed. Our business prospects, financial condition or operating results could be materially harmed among other causes by the following: 1) budgetary constraints affecting U.S. government spending generally, or specific departments or agencies in particular, and changes in available funding, such as federal government sequestration (automatic spending cuts); 2) changes in U.S. government programs or requirements; and 3) a prolonged U.S. government shutdown and other potential delays in the appropriations process.
Failure to obtain and retain skilled technical personnel could adversely affect our operations.
Our production facilities require skilled personnel to operate and provide technical services and support for our business. Competition for the personnel required for our business intensifies as activity increases. In periods of high utilization, it may become more difficult to find and retain qualified individuals, and there can be no assurance that we will be successful in attracting and retaining qualified personnel to fulfill our current or future needs. This could increase our costs or have other adverse effects on our results of operations.
The extensive environmental, health and safety regulatory regimes applicable to our manufacturing operations create potential exposure to significant liabilities.
The nature of our manufacturing business subjects our operations to numerous and varied federal, state, local and international laws and regulations relating to pollution, protection of public health and the environment, natural resource damage and occupational safety and health. Failure to comply with these laws and regulations, or with the permits required for our operations, could result in fines or civil or criminal sanctions, third party claims for property damage or personal injury, and investigation and cleanup costs. Potentially significant expenditures could be required to comply with environmental laws that may be adopted or imposed in the future.
We have used, and currently use, certain substances that are considered hazardous, extremely hazardous or toxic under worker safety and health laws and regulations. Although we implement controls and procedures designed to reduce continuing risk of adverse impacts and health and safety issues, we could incur substantial cleanup costs, fines and civil or criminal sanctions, and third-party property damage or personal injury claims because of violations, non-compliance or liabilities under these regulatory regimes.
As a manufacturing business, we also must comply with federal and state environmental laws and regulations which relate to the manner in which we store and dispose of materials and the reports that we are required to file. We cannot assure you that we will not incur additional costs to maintain compliance with environmental laws and regulations or that we will not incur significant penalties for failure to be in compliance any of which could have a material adverse effect on our business, financial condition and results of operations.
14
Our systems and information technology infrastructure may be subject to security breaches and other cybersecurity incidents.
We rely on the accuracy, capacity, and security of our information technology systems to obtain, process, analyze, and manage data, as well as to facilitate the manufacture and distribution of products to and from our facility. We receive, process and ship orders, manage the billing of and collections from our customers, and manage the accounting for and payment to our vendors. Maintaining the security of computers, computer networks, and data storage resources is a critical issue for us and our customers, as security breaches could result in vulnerabilities and loss of and/or unauthorized access to confidential information. We may face attempts by experienced hackers, cybercriminals, hostile nation-state actors, or others with authorized access to our systems to misappropriate our proprietary information and technology, interrupt our business, and/or gain unauthorized access to confidential information. The reliability and security of our information technology infrastructure and software, and our ability to expand and continually update technologies in response to our changing needs is critical to our business. To the extent that any disruptions or security breaches result in a loss or damage to our data, it could cause harm to our reputation. This could lead some customers to stop using us for building their products and reduce or delay future purchases of our products or use competing products. In addition, we could face enforcement actions by U.S. states, the U.S. federal government, or foreign governments, which could result in fines, penalties, and/or other liabilities and which may cause us to incur legal fees and costs, and/or additional costs associated with responding to the cyberattack. Increased regulation regarding cybersecurity may increase our costs of compliance, including fines and penalties, as well as costs of cybersecurity audits. Any of these actions could have a material adverse impact on our business, financial condition and the results of operations.
We are subject to regulations related to conflict minerals which could adversely impact our business.
We are subject to SEC rules regarding the disclosure of the use of tin, tantalum, tungsten, gold and certain other minerals, known as conflict minerals, in products manufactured by public companies. These rules require that public companies conduct due diligence to determine whether such minerals originated from the Democratic Republic of Congo, or the DRC, or an adjoining country and whether such minerals helped finance the armed conflict in the DRC. These rules require ongoing due diligence efforts, along with annual conflict minerals reports. There are costs associated with complying with these disclosure requirements, including costs to determine the origin of conflict minerals used in our products.
In addition, these rules could adversely affect the sourcing, supply and pricing of materials used in our products. As there may be only a limited number of suppliers offering conflict-free minerals, we cannot be sure that we will be able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at competitive prices. Also, we may face reputational challenges if the due diligence procedures we implement do not enable us to verify the origins for all conflict minerals or to determine that such minerals are DRC conflict-free. We may also encounter challenges satisfying customers that may require all of the components of products purchased to be certified as DRC conflict-free because our supply chain is complex. If we are not able to meet customer requirements, customers may choose to disqualify us as a supplier.
We currently do not use any conflict minerals in the production of our products, but from time to time we may receive a customer order necessitating the use of conflict minerals. In the event we produce any products utilizing conflict minerals, we will be required to comply with the rules discussed above.
Changes in delivery schedules and order specifications may affect our revenue stream.
Although we provide manufacturing services pursuant to orders placed by our customers, we have in the past experienced delays in scheduling and changes in the specification of our products. Delays in scheduling have been and, in the future, may be caused by disruptions relating to epidemics, pandemics and government-imposed lockdowns, or economy-wide supply chain disruptions, while changes in order specifications may result from several factors, including a determination by the customer that the product specifications need to be changed after receipt of an initial product or prototype. As a result of these changes, we may suffer a delay in the recognition of revenue from projects and may incur contract losses. We cannot assure you that our results of operations will not be affected in the future by delays or changes in specifications or that we will ever be able to recover revenue which was lost as a result of the delays or changes. Further, if we cannot allocate our personnel to a different project, we will continue to incur expenses relating to the initial project, including labor and overhead. Thus, if orders are postponed, our results of operations would be impacted by our need to maintain staffing and other expense-generating aspects of production for the postponed projects, even though they were not fully utilized, and revenue associated with the project will not be recognized during this period. We cannot assure you that our operating results will not decline in future periods because of changes in customers’ orders.
15
Negative economic conditions may impact the demand for our services and the ability of our customers to meet their obligations with us on a timely basis. Any disputes with customers could also have an adverse impact on our income and cash flow.
Negative economic conditions, including tightening of credit in financial markets as a result of increases in interest rates and/or instability in the banking system, may lead businesses to postpone spending, which may impact our customers, causing them to cancel, decrease or delay their existing and future orders with us. Declines in economic conditions may further impact the ability of our customers to meet their obligations to us on a timely basis. If customers are unable to meet their obligations to us on a timely basis, it could adversely impact the realization of receivables, the valuation of inventories and the valuation of long-lived assets. Additionally, we may be negatively affected by contractual disputes with customers, which could have an adverse impact on our financial condition and the results of operations.
If our customers successfully assert product liability claims against us due to defects in our products, our operating results may suffer, and our reputation may be harmed.
Due to the circumstances under which many of our products are used and the fact that some of our products are relied upon by our customers in their facilities or operations, we face an inherent risk of exposure to claims in the event that the failure, use or misuse of our products results, or is alleged to result, in bodily injury, property damage or economic loss. We have been subject to product liability claims in the past, and we may be subject to claims in the future. A successful product liability claim or series of claims against us, or a significant warranty claim or series of claims against us could materially decrease our liquidity and adversely affect our financial condition and results of operations.
We maintain a substantial amount of outstanding indebtedness, which could impair our ability to operate our business and react to changes in our business, remain in compliance with debt covenants and make payments on our debt.
Our level of indebtedness could have important consequences, including, without limitation:
| ● | increasing our vulnerability to general economic and industry conditions because our debt payment obligations may limit our ability to use our cash to respond to or defend against changes in the industry or the economy; |
| ● | requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; |
| ● | limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; |
| ● | limiting our ability to pursue our growth strategy, including restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; |
| ● | placing us at a disadvantage compared to our competitors who are less leveraged and may be better able to use their cash flow to fund competitive responses to changing industry, market or economic conditions; and |
| ● | making us more vulnerable in the event of a downturn in our business, our industry, or the economy in general. |
Because certain of our borrowing facilities contain variable interest rate provisions, many of the above consequences could be worsened if interest rates were to increase. In addition, our current credit facilities contain, and any future credit facilities to which we become a party will likely contain, covenants and other provisions that restrict our operations. These restrictive covenants and provisions could limit our ability to obtain future financing, make needed capital expenditures, withstand a future downturn in our business, or the economy in general, or otherwise conduct necessary corporate activities, and may prevent us from taking advantage of business opportunities that arise in the future.
16
If we refinance our credit facilities, we cannot guarantee that any new credit facility will not contain similar covenants and restrictions.
Our liquidity is highly dependent on our available financing facilities and ability to improve our gross profit and operating income. Our failure to obtain new or additional financing, if required, could impair our ability to both serve our existing customer base and develop new customers and could result in our failure to continue to operate as a going concern. To the extent that we require new or additional financing, we cannot assure you that we will be able to get such financing on terms equal to or better than the terms of our current credit facilities with the Bank. If we are unable to borrow funds under an existing credit facility, it may be necessary for us to conduct an offering of debt and/or equity securities on terms which may be disadvantageous to us or have a negative impact on our outstanding securities and the holders of such securities. In the event of an equity offering, it may be necessary that we offer such securities at a price that is significantly below our current trading levels which may result in substantial dilution to our investors that do not participate in the offering and a new lower trading level for our common stock.
We may need new or additional financing in the future to expand our business or refinance existing indebtedness, and our inability to obtain capital on satisfactory terms or at all may have an adverse impact on our operations and our financial results.
We may need new or additional financing in the future to expand our business, refinance existing indebtedness or make strategic acquisitions, and our inability to obtain capital on satisfactory terms or at all may have an adverse impact on our operations, financial condition, or results of operations. As we grow our business, we may have to incur significant capital expenditures. We may make capital investments to, among other things, build new or upgrade our existing facilities, purchase or lease new equipment and enhance our production processes. If we are unable to access capital on satisfactory terms and conditions, we may not be able to expand our business or meet our payment requirements under our existing credit facilities. Our ability to obtain new or additional financing will depend on a variety of factors, many of which are beyond our control. We may not be able to obtain new or additional financing because we may have substantial debt, our current receivable and inventory balances may not support additional debt availability or because we may not have sufficient cash flows to service or repay our existing or future debt. In addition, depending on market conditions and our financial performance, equity financing may not be available on satisfactory terms or at all. Moreover, if we raise additional funds through issuances of equity or convertible debt securities, our current stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. If we are unable to access capital on satisfactory terms and conditions, this could have an adverse impact on our business, results of operations and financial condition.
Any deterioration or disruption of the credit and capital markets may adversely affect our access to sources of funding.
Disruptions in the credit markets can cause severely restricted access to capital for companies. When credit markets deteriorate or are disrupted, our ability to incur additional indebtedness to fund a portion of our working capital needs and other general corporate purposes, or to refinance maturing obligations as they become due, may be constrained. This risk could be exacerbated by future deterioration in the Company’s credit ratings. In addition, if the counterparty backing our existing credit facilities were unable to perform on its commitments, our liquidity could be impacted, which could adversely affect funding of working capital requirements and other general corporate purposes. In the event we need to access the capital markets or other sources of financing, there can be no assurance that we will be able to obtain financing on acceptable terms or within an acceptable time, if at all. In addition, geopolitical conflicts, high inflation and increasing interest rates have significantly disrupted world financial markets, increased volatility in U.S. capital markets, and may reduce opportunities for us to seek additional funding. Our inability to obtain financing on terms and within a time acceptable to us could have an adverse impact on our results of operations, financial condition, and liquidity.
Risks Related to our Common Stock
If we fail to maintain compliance with The Nasdaq Stock Market’s listing standards, our common stock could be delisted from Nasdaq.
As a listed Nasdaq Stock Market (“Nasdaq”) company, we are subject to rules covering, among other things, certain major corporate transactions, the composition of our board of directors and committees thereof, the minimum bid price of our common stock and minimum stockholders’ equity. Nasdaq also has rules governing the timely filing of periodic reports. We have failed in the past to comply with the Nasdaq requirement to timely file our periodic financial reports with respect to some of our previous annual reports on Form 10-K and quarterly reports on Form 10-Q and there can be no guarantee that we will continue to make timely filings of our subsequent periodic financial reports with the SEC. The failure to meet any Nasdaq requirements may result in the delisting of our common stock from Nasdaq, which could adversely affect the liquidity and market price of our common stock.
17
If our common stock were to be delisted, selling shares of our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced. In addition, in the event our common stock is delisted, broker-dealers have certain regulatory requirements imposed upon them, which may discourage broker-dealers from effecting transactions in our common stock, further limiting the liquidity thereof. These factors could result in lower prices for shares of our common stock and/or limit an investor’s ability to execute a transaction. In addition, delisting from Nasdaq could also impair our ability to raise additional necessary capital through equity or debt financing, and could lead to significant dilution to our stockholders caused by our issuing equity in financing or other transactions at a price per share significantly below the then market price.
Our stock price may fluctuate significantly.
The stock market can experience significant volatility, and the volatility of stocks often does not relate to the operating performance of the companies represented by the stock. The market price of our common stock could be subject to significant fluctuations because of general market conditions and because of factors specifically related to our business.
Factors that could cause volatility in the market price of our common stock include market conditions affecting our customers’ businesses, including the level of mergers and acquisitions activity, anticipated changes in spending on national defense by the U.S. Government, and actual and anticipated fluctuations in our quarterly operating results, rumors relating to us or our competitors, actions of stockholders, including sales of shares by our directors and executive officers, additions or departures of key personnel, and developments concerning current or future strategic alliances or acquisitions. Volatility in our stock price may also be enhanced by the fact that our common stock is often thinly traded. Additionally, the economic and other consequences of the past instability with regional banks, geopolitical conflict, high inflation, government tariffs and increasing interest rates have resulted in significant volatility in the equity capital markets.
These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock at a profit and may otherwise negatively affect the liquidity of our common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, even if the lawsuit is without merit, we could incur substantial costs by defending the lawsuit. Such a lawsuit could also divert the time and attention of our management.
The issuance of shares of our common stock as compensation may dilute the value of existing stockholders and may affect the market price of our stock.
We may use, and have in the past used, stock options, stock grants and other equity-based incentives to provide motivation and compensation to our directors, officers, employees and key independent consultants. The award of any such incentives will result in immediate and potentially substantial dilution to our existing stockholders and could result in a decline in the value of our stock price. The exercise of these options and the sale of stock issued upon such exercise or pursuant to stock grants may have an adverse effect upon the price of our stock.
The number of shares of common stock we have registered for resale is significant in relation to the number of our outstanding shares of common stock.
We have filed registration statements with the SEC to register the resale of shares of our common stock into the public market by certain stockholders (including some of our directors) that acquired shares of our common stock in transactions not registered under the Securities Act, including shares underlying warrant to purchase our common stock. These shares represent a significant number of shares of our total number of issued and outstanding shares of common stock. The resale by these stockholders of a significant number of these shares, or the perception in the public markets that such selling securityholders may sell all or a portion of such securities, could depress the market price of our Common Stock during the period the applicable registration statement remains effective.
The trading volume of our common stock has fluctuated from time to time and is typically low, which may make it difficult for investors to sell their shares at times and prices that investors feel is appropriate.
To date, the trading volume of our common stock has fluctuated, and there is typically a low volume of trading in our common stock. Generally, lower trading volumes adversely affect the liquidity of our common stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and reduction in security analysts’ and the
18
media’s coverage of us. This may result in lower prices for our common stock than might otherwise be obtained and could also result in a larger spread between the bid and asked prices for our common stock.
Because of our cash requirements and restrictions in our debt agreements, we may be unable to pay dividends.
In view of the cash requirements of our business, we expect to use any cash flow generated by our business to finance our operations and growth and to service our indebtedness. Further, we are subject to certain affirmative and negative covenants under our debt agreements which restrict our ability to declare or pay any dividend or other distribution on equity, purchase or retire any equity, or alter our capital structure. Accordingly, any return to stockholders will be limited to the appreciation of the value of their holdings of our stock.
The rights of the holders of our common stock may be impaired by the potential issuance of preferred stock.
Our certificate of incorporation gives our board of directors the right to create a new series of preferred stock. As a result, the board of directors may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation, or other rights that are superior to the rights associated with our common stock, which could adversely affect the voting power and equity interest of the holders of our common stock. Preferred stock, which could be issued with the right to more than one vote per share, could be utilized as a method of discouraging, delaying, or preventing a change of control. The possible impact on takeover attempts could adversely affect the price of our common stock.
General Risk Factors
If securities analysts do not publish research or reports about our business, if they issue unfavorable commentary or downgrade their rating on our common stock, or if we fail to meet projections and estimates of earnings developed by such analysts, the price of our common stock could decline.
The trading market for our common stock relies in part on the research and reports that securities analysts publish about us and our business. The price of our common stock could decline if one or more analysts downgrade their rating on our common stock or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business. In addition, although we do not make projections relating to our future operating results, our operating results may fall below the expectations of securities analysts and investors. In this event, the market price of our common stock would likely be adversely affected.
We have identified certain material weaknesses in our internal control over financial reporting, resulting from control deficiencies related to 1) an insufficient complement of Stadco accounting staff necessary to consistently perform management review controls over financial information and complete account reconciliations on a timely basis to ensure all transactions were accurately captured and recorded, 2) initial purchase accounting and fair value accounting associated with the Stadco acquisition, and 3) adjustments related to tax accounting for a deficient analysis of the valuation allowance. If we fail to maintain effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us.
We are subject to the Sarbanes-Oxley Act, which requires public companies to include in their annual report a statement of management’s responsibilities for establishing and maintaining adequate internal control over financial reporting, together with an assessment of the effectiveness of those internal controls. Ensuring that we have effective internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. Our failure to maintain the effectiveness of our internal controls in accordance with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business. We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock and could result in us being the subject of regulatory scrutiny.
During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls over financial reporting are effective. For example, in connection with the audit of our financial statements, we identified certain material weaknesses in our internal control over financial reporting. The material weaknesses we identified pertain to (i) initial purchase accounting and the continuing fair value accounting associated with our acquisition of Stadco, (ii) we did not maintain a sufficient complement resources and expertise on the Stadco accounting staff necessary to consistently perform management review controls over financial information and complete account reconciliations on a timely basis to ensure all transactions were accurately captured and recorded prior to closing the books, (iii) the
19
accounting for the impairment of long-lived assets, and (iv) the segregation of duties among people and processes to mitigate risk and meet financial reporting objectives. See “—Material Weaknesses” and “—Management’s Remediation Plan” in the section titled “Item 9A. Controls and Procedures” for more details concerning these material weaknesses.
While we have taken steps to enhance our internal control environment, we continue to address the underlying cause of the material weaknesses with a review of our internal controls, and may propose additional new controls, including those designed to raise the level of precision of management review controls to gain additional assurance regarding the timely completion of our quality control procedures. Except for tax accounting, the steps we have taken to date were not sufficient to remediate all material weaknesses or to avoid the identification of other material weaknesses in the future. We cannot assure you that the measures we have taken to date, and are continuing to implement, will be sufficient to avoid additional material weaknesses or significant deficiencies in our internal control over financial reporting in the future. If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of shares of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Cybersecurity Risk Management and Strategy
We have
We continue to work with outside counsel and third - party service providers to further develop our expertise, processes and procedures with respect to cybersecurity protection and our response plan.
To date,
Governance
Our
Our
Item 2. Properties.
We own approximately 145,000 square feet of office and manufacturing space under roof, situated on approximately 65 acres in Westminster, Massachusetts that is used by our Ranor reportable segment. We believe that our current facilities in Westminster are adequate for our present operational requirements, with room for limited expansion. The manufacturing facilities include a fabrication
20
plant and a machining plant, providing custom solutions through our core competencies in manufacturing engineering, materials management and traceability, fabrication, machining, assembly and testing, finishing and coating, and packaging. Our capabilities include 100+ ton crane capacity, 35 feet under hook, weld positioners up to 50-ton, 400+ approved weld procedures, multiple weld cells, stress relief ovens, blast rooms, and multiple precision machining centers. Our loans from the Bank are secured by a first lien on all personal and real property of Ranor, including our space in Westminster, Massachusetts.
We lease approximately 183,000 square feet of office and manufacturing space under roof, situated on approximately 5 acres in Los Angeles, California that is used by our Stadco reportable segment. Tooling capabilities include large-scale, high-precision, complex geometry invar, steel, and aluminum tools, molds, jigs and dies to support composite part manufacturers. Stadco can provide concurrent engineering, materials and process research, numerical control programming, fabrication and machining, planning and inspection, and final assembly. Our capabilities include 50+ ton crane capacity, CNC machining up to 65 feet, and one of the largest electron beam weld chambers in North America. Our loan from the Bank is secured by a first lien on all personal and real property of Stadco.
Item 3. Legal Proceedings.
We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. As of the date hereof, we are not a party to any material legal or administrative proceedings. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.
Item 4. Mine Safety Disclosures
Not applicable to the registrant.
21
Item 4A. Executive Officers of the Registrant
The following table sets forth certain information concerning our executive officers.
Name | | Age | | Position |
Alexander Shen | | 64 |
| Chief Executive Officer |
Phillip Podgorski | | 61 |
| Chief Financial Officer |
Alexander Shen was appointed Chief Executive Officer of TechPrecision on November 14, 2014 and became a director on our board of directors on September 15, 2022. Since June 2014, Mr. Shen has served as President of our Ranor subsidiary. Mr. Shen has experience in a broad range of industries including metal fabrication, automotive, contract manufacturing, safety and security, and industrial distribution. Prior to joining us, Mr. Shen served in 2013 as President of SIB Development and Consulting, a firm specializing in fixed, monthly cost reduction. Mr. Shen served as President of Tydenbrooks Security Products Group, a security products company, from July 2011 to December 2012. Mr. Shen served as President and Chief Executive Officer of Burgon Tool Steel Company between January 2009 and June 2011 and served as Chief Executive Officer of Ryerson Mexico & Vice President - International for Ryerson, Inc., a multi-national distributor and processor of metals, from 2007 to 2009. Mr. Shen was Division General Manager & Chief Operating Officer at Sumitomo Electric Group from 1998 to 2007, focused on automotive electrical and electronic products. Prior to 1998, he had a 10-year career at the Automotive Division of Alcoa Inc. with roles of increasing responsibility. Mr. Shen began his career with General Motors, moving to Chrysler, before joining Alcoa Inc. His career includes multiple international management roles in Japan, China, Mexico, and Europe, and he is fluent in the Chinese and Japanese languages and cultures. Mr. Shen holds a B.S. in Engineering from Michigan State University.
Phillip Podgorski was appointed Chief Financial Officer effective on April 8, 2025. Mr. Podgorski was the Chief Financial Officer for the RTX Technology Research Center (“RTRC”), a division of RTX Corporation (“RTX”), a public aerospace and defense company, since 2013. While at RTX, he was responsible for all GAAP, SEC and government accounting and reporting related aspects for the RTRC. He was also responsible for strategic and scenario planning in collaboration with other stakeholders at RTX, including long-range plans and annual operating budgets. Mr. Podgorski has an MBA and Bachelor of Science degree in Accounting from Western New England University.
There are no family relationships among any directors or executive officers.
22
PART II
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 under the symbol “TPCS”.
As of June 16, 2026, there were 39 holders of record of our outstanding common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
We were incorporated in 2005 and have never paid dividends on our common stock. Certain covenants in our Loan Agreement with the Bank prohibit us from paying dividends. We plan to retain future earnings, if any, for use in our business and do not anticipate paying dividends on our common stock in the foreseeable future.
Securities Authorized for Issuance Under Equity Compensation Plans
Information regarding the securities authorized for issuance under our equity compensation plans can be found under Item 12 of this Annual Report on Form 10-K.
Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands, except per share data)
Statement Regarding Forward Looking Disclosure
The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes, which appear elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K, including this section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may contain predictive or “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of current or historical fact contained in this annual report, including statements that express our intentions, plans, objectives, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events, or conditions are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “should,” “would” and similar expressions, as they relate to us, are intended to identify forward-looking statements.
These forward-looking statements are based on current expectations, estimates and projections made by management about our business, our industry and other conditions affecting our financial condition, results of operations or business prospects. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, the forward-looking statements due to numerous risks and uncertainties. As discussed below under “Liquidity, Capital Resources, and Going Concern”, certain events and conditions, when examined in the aggregate, indicate substantial doubt about our ability to continue as a going concern for at least one year beyond the date of the financial statements. Factors that could cause such outcomes and results to differ include, but are not limited to, risks and uncertainties arising from:
| ● | our reliance on individual purchase orders, rather than long-term contracts, to generate revenue; |
| ● | our ability to balance the composition of our revenues and effectively control operating expenses; |
| ● | external factors that may be outside of our control, including health emergencies, like epidemics or pandemics, geopolitical conflicts, price inflation, increasing interest rates, and supply-chain disruptions; |
| ● | the availability of appropriate financing facilities impacting our operations, financial condition and/or liquidity; |
| ● | our ability to receive contract awards through competitive bidding processes; |
23
| ● | our ability to maintain standards to enable us to manufacture products to exacting specifications; |
| ● | our ability to enter new markets for our services; |
| ● | our reliance on a small number of customers for a significant percentage of our business; |
| ● | competitive pressures in the markets we serve; |
| ● | changes in the availability or cost of raw materials and energy for our production facilities; |
| ● | restrictions on our ability to operate our business due to our outstanding indebtedness; |
| ● | government tariffs, regulations and requirements; |
| ● | pricing and business development difficulties; |
| ● | changes in government spending on national defense; |
| ● | our ability to make acquisitions and successfully integrate those acquisitions with our business; |
| ● | our failure to maintain effective internal controls over financial reporting; |
| ● | general industry and market conditions and growth rates, and |
| ● | those risks discussed in “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K, as well as those described in any other filings which we make with the SEC. |
Any forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this Annual Report on Form 10-K, except as required by applicable law. Investors should evaluate any statements made by us in light of these important factors.
Recent Developments
Amendments to Loan Agreement
Ranor, Inc. along with certain affiliates of the Company entered into the Loan Agreement with the Bank on August 25, 2021 under which, among other things, the Bank provided a revolving line of credit loan to the Borrowers (as defined below) which currently has a maximum principal amount of $4,500.
Since March 31, 2026, Ranor and certain affiliates of the Company, collectively the “Borrowers”, entered into an additional amendment to the Loan Agreement which extended the maturity date of the Revolver Loan from May 15, 2026 to September 15, 2026.
See “Liquidity, Capital Resources and Going Concern—Bank Term and Revolver Loans” below, for a discussion of the amended debt agreement and its impact on the Company’s liquidity and on-going operations.
Overview
We have two wholly owned subsidiaries that are each a reportable segment, Ranor and Stadco. Each reportable segment focuses on the manufacture and assembly of specific components, primarily for defense and other precision industrial customers.
The manufacturing operations of our Ranor subsidiary are situated on approximately 65 acres in North Central Massachusetts. Leveraging our 145,000 square foot facilities, Ranor provides a full range of custom solutions to transform material into precision finished welded components and precision finished machined components up to 100 tons: manufacturing engineering, materials management and traceability, high-precision heavy fabrication (in-house fabrication operations include cutting, press and roll forming,
24
welding, heat treating, assembly, blasting and painting), heavy high-precision machining (in-house machining operations include CNC programming, finishing, and assembly), QC inspection including portable CMM, NonDestructive Testing, and final packaging.
All manufacturing at Ranor is performed in accordance with customer requirements. Ranor is an ISO 9001:2015 certificate holder. Ranor is a U.S. defense-centric company with over 95% of its revenue in the defense sector. Ranor is registered and compliant with ITAR.
The manufacturing operations of our Stadco subsidiary are situated in an industrial self-contained multi-building complex comprised of approximately 183,000 square feet under roof in Los Angeles, California. Stadco manufactures large mission-critical components on several high-profile military aircraft, military helicopter, and military space programs. Stadco has been a critical supplier to a blue-chip customer base that includes some of the largest OEMs and prime contractors in the defense and aerospace industries. Stadco also manufactures tooling, molds, fixtures, jigs and dies used in the production of defense-centric aircraft components.
Our Stadco subsidiary, similar to Ranor, provides a full range of custom solutions: manufacturing engineering, materials management and traceability, high-precision fabrication (in-house fabrication operations include waterjet cutting, press forming, welding, and assembly) and high-precision machining (in-house machining operations include CNC programming, finishing, and assembly), QC inspection including both fixed and portable CMM NonDestructive Testing, and final packaging. In addition, Stadco features a large electron beam welding cell, and two NonDestructive Testing work cells, a unique mission-critical technology set.
All manufacturing at Stadco is performed in accordance with customer requirements. Stadco is an AS 9100 D and ISO 9001:2015 certificate holder and a NADCAP NonDestructive Testing certificate holder. Stadco is a US defense-centric company with almost all of its revenue in the defense sector. Stadco is registered and compliant with ITAR.
Custom Manufacturing
We manufacture a variety of components in accordance with our internal core competencies and external customer needs and requirements. We also provide manufacturing engineering services to assist customers in optimizing their engineering designs for manufacturability. We do not design the components we manufacture; we custom manufacture according to customer “build-to-print” requirements and specifications. Accordingly, we do not distribute the components that we manufacture on the open market, and we do not market any products. We do not own the intellectual property rights to any proprietary marketed product, and we do not manufacture in anticipation of orders. Our custom manufacturing operations do not commence on any project before we receive and accept a customer’s purchase order. We only accept contracts that cover specific components within the capability of our resources.
We primarily target repeating custom programs with relatively mature and stable designs in order to provide long-term solutions for our customers. The multi-unit work is repeat work or a single product with multiple quantity releases. Secondarily, our activities include a variety of both multi-unit and one-off requirements. The one-off work is typically either a prototype or a unique, one-of-a-kind component.
Changes in regulations and market demand for our manufacturing expertise can be significant and sudden, and require us to adapt to the needs of the customers that we serve. Understanding this dynamic, we focus on the defense industry in order to reliably pivot with our defense customers to jointly develop the capability to transform our workforce to manufacture components in accordance with our own and our external customers’ changing requirements.
We primarily serve customers in defense and aerospace, secondarily in the precision industrial sectors. Within these sectors, we have manufactured custom components for U.S. Navy submarines and aircraft carriers, USMC military helicopters, U.S. defense and civilian aerospace programs.
Our contracts are generated both through negotiation with the customer and from bids made pursuant to a request for proposal. Our ability to receive contract awards is dependent upon the contracting party’s perception of such factors as our ability to perform on time, our history of performance, including quality, our financial condition, and our ability to price our services competitively.
Critical Accounting Policies and Estimates
The preparation of the consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis
25
for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We continually evaluate our estimates, including those related to revenue recognition, recovery of long-lived assets, and income taxes. These estimates and assumptions require management’s most difficult, subjective, or complex judgments. Actual results may differ under different assumptions or conditions.
Revenue and Related Cost Recognition
We recognize revenue over time based on the transfer of control of the promised goods or services to the customer, or at a point in time. This transfer will occur over time when the Company’s performance does not create an asset that has an alternative use to the Company, and we have an enforceable right to payment for performance completed to date. Otherwise, control to the promised goods or services transfers to customers at a point in time.
The majority of the Company’s contracts have a single performance obligation and provide title to, or grant a security interest in, work-in-process to the customer. In addition, these contracts contain enforceable rights to payment, allowing the Company to recover both its cost and a reasonable margin on performance completed to date. The combination of these factors indicates that the customer controls the asset (and revenue is recognized) as the asset is created or enhanced. The Company measures progress for performance obligations satisfied over time using input methods (e.g., costs incurred, resources consumed, labor hours expended, time elapsed).
Our evaluation of whether revenue should be recognized over time requires significant judgment about whether the asset has an alternative use and whether the entity has an enforceable right to payment for performance completed to date. When any one of these factors is not present, the Company will recognize revenue at the point in time when control over the promised good or service transfers to the customer, i.e., when the customer has accepted the asset and taken physical possession of the product and has legal title, and the Company has a right to payment.
When estimating contract costs, the Company takes into consideration a number of assumptions and estimates regarding risks related to technical requirements and scheduling. Management performs periodic reviews of the contracts to evaluate the underlying risks. Profit margin on any given project could increase if the Company is able to mitigate and retire such risks. Conversely, if the Company is not able to properly manage these risks, cost estimates may increase, resulting in a lower profit margin, or potentially, contract losses.
The cost estimation process requires significant judgment and is based upon the professional knowledge and experience of the Company’s engineers, program managers, and financial professionals. Factors considered in estimating the work to be completed and ultimate contract recovery include the availability, productivity, and cost of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in performance, the availability and timing of funding from the customer, and the recoverability of any claims included in the estimates to complete. Costs allocable to undelivered units are reported as work in process, a component of inventory, in the consolidated balance sheet. Pre-contract fulfillment costs requiring capitalization are not material.
Changes in job performance, job conditions, and estimated profitability are recognized in the period in which the revisions are determined. Costs incurred on uncompleted contracts consist of labor, overhead, and materials. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Our provision for losses at March 31, 2026 and 2025 was $357 and $463, respectively, with 95% and 88% of the totals related to customer projects at our Stadco reportable segment, and the remaining amounts at our Ranor segment.
Long-lived assets
In accordance with Accounting Standards Codification (ASC) 360, Property, Plant & Equipment, our property, plant and equipment are tested for impairment whenever events or circumstances indicate the carrying amount of an asset may be impaired. The carrying amount of an asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. If impaired, the asset is written down to fair value based on either discounted cash flows or appraised values.
In the fourth quarter of fiscal 2026, we determined that a history of operating losses at Stadco may indicate that the carrying value of the long-lived assets may not be recoverable. As such, we conducted a test for recoverability of long-lived assets at our Stadco segment and determined that the carrying value of the long-lived assets were not impaired.
26
Income Taxes
We provide for federal and state income taxes currently payable, as well as those deferred because of temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable. The effect of the change in the tax rates is recognized as income or expense in the period of the change. A valuation allowance is established, when necessary, to reduce deferred income taxes to the amount that is more likely than not to be realized.
In assessing the recoverability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. If we determine that it is more likely than not that certain future tax benefits may not be realized, a valuation allowance will be recorded against deferred tax assets that are unlikely to be realized. Realization of the remaining deferred tax assets will depend on the generation of sufficient taxable income in the appropriate jurisdiction, the reversal of deferred tax liabilities, tax planning strategies and other factors prior to the expiration date of the carryforwards. A change in the estimates used to make this determination could require a reduction in the valuation allowance for deferred tax assets if they become realizable.
Accounting Pronouncements
New Accounting Standards
See Note 3, Accounting Standards Update, in the Notes to the Consolidated Financial Statements under “Item 8. Financial Statements and Supplementary Data”, for a discussion of recently adopted new accounting guidance and new accounting guidance not yet adopted.
Results of Operations
Our results of operations are affected by a number of external factors including the availability of raw materials, commodity prices (particularly steel), macroeconomic factors, including the availability of capital that may be needed by our customers, and political, regulatory, and legal conditions in the United States and in foreign markets. Generally, our product mix is made up of short-term contracts with a production timeline of twelve months, more or less. However, contracts for larger complex components can take up to thirty-six months to complete. Units manufactured under most of our customer contracts have historically been delivered on time and with a positive gross margin, with some exceptions. Our results of operations are also affected by our success in booking new contracts, the timing of revenue recognition, delays in customer acceptance of our products, delays in deliveries of ordered products and our rate of progress fulfilling obligations under our contracts. A delay in deliveries or cancellations of orders could have an unfavorable impact on liquidity, cause us to have inventories in excess of our short-term needs, and delay our ability to recognize, or prevent us from recognizing, revenue on contracts in our order backlog. Also, our operating results may fluctuate quarter to quarter as we change over from completed projects to new projects.
We evaluate the performance of our segments based upon, among other things, segment revenue and operating profit. Segment operating profit excludes general corporate costs, which include director compensation, stock-based compensation, certain pension and other retirement benefit costs, and other corporate administrative expenses not allocated to the segments. Also excluded are items that we consider not representative of ongoing operations, such as acquisition due diligence costs and termination fees.
Key Performance Indicators
While we prepare our financial statements in accordance with U.S. generally accepted accounting principles, or “U.S. GAAP”, we also utilize and present certain financial measures that are not based on or included in U.S. GAAP. We refer to these as non-GAAP financial measures. Please see the section titled “EBITDA Non-GAAP Financial Measure” below for further discussion of these financial measures, including the reasons why we use such financial measures and reconciliations of such financial measures to the most directly comparable U.S. GAAP financial measures.
Corporate expenses include stock-based compensation, board of director compensation, and other corporate general expenses not allocated to the segments.
Percentages in the following tables and throughout this “Results of Operations” section may reflect rounding adjustments.
27
Fiscal Years Ended March 31, 2026 and 2025
The following table presents revenue, cost of revenue, gross profit (loss), consolidated and by reportable segment:
| | 2026 | | 2025 | | Changes |
| |||||||||
| | | | Percent of | | | | Percent of | | | | | | |||
(dollars in thousands) | | Amount | | Revenue | | Amount | | Revenue | | Amount | | Percent |
| |||
Revenue | | | | | | | | | | | | | | | | |
Ranor | | $ | 16,946 | | 54 | % | $ | 18,165 | | 53 | % | $ | (1,219) | | (7) | % |
Stadco | | | 15,306 | | 48 | % | | 15,998 | | 47 | % | | (692) | | (4) | % |
Intersegment elimination | | | (608) | | (2) | % | | (132) | | — | % | | (476) | | (361) | % |
Consolidated Revenue | | $ | 31,644 | | 100 | % | $ | 34,031 | | 100 | % | $ | (2,387) | | (7) | % |
Cost of Revenue | | | | | | | | | | | | | | | | |
Ranor | | $ | 11,119 | | 35 | % | $ | 12,623 | | 37 | % | $ | (1,504) | | (12) | % |
Stadco | | | 16,158 | | 51 | % | | 17,211 | | 50 | % | | (1,053) | | (6) | % |
Intersegment elimination | | | (608) | | (2) | % | | (132) | | — | % | | (476) | | (361) | % |
Consolidated Cost of Revenue | | $ | 26,669 | | 84 | % | $ | 29,702 | | 87 | % | $ | (3,033) | | (10) | % |
Gross Profit (Loss)1 | | | | | | | | | | | | | | | | |
Ranor | | $ | 6,324 | | 20 | % | $ | 5,674 | | 16 | % | $ | 650 | | 11 | % |
Stadco | | | (1,349) | | (4) | % | | (1,345) | | (3) | % | | (4) | | — | % |
Consolidated Gross profit | | $ | 4,975 | | 16 | % | $ | 4,329 | | 13 | % | $ | 646 | | 15 | % |
1 | net of intersegment eliminations |
Revenue
Consolidated – Revenue was $31,644 for the fiscal year ended March 31, 2026, a decrease of $2,387 or 7% when compared to revenue for the fiscal year ended March 31, 2025. Consolidated gross profit increased by 15% and gross margin expanded to 16% during the fiscal year ended March 31, 2026. Changes in our project mix dampened revenue as our rate of progress fulfilling obligations slowed.
Ranor – Revenue was $16,946 for the fiscal year ended March 31, 2026, a decrease of $1,219 or 7% when compared to the same period a year ago. The customer project mix remains favorable but has changed from the same prior year period, as a different set of defense customers made up a significant portion of our revenue stream in fiscal 2026.
The backlog at Ranor on March 31, 2026 was $29,405 as new orders continue to flow to us from our existing customer base of prime defense contractors.
Stadco – Revenue was $15,306 for the fiscal year ended March 31, 2026, compared with revenue of $15,998 for the fiscal year ended March 31, 2025, a decrease of $692 or 4%. The customer project mix changed from the same prior year period, as a different set of defense customers made up a significant portion of our revenue stream in fiscal 2026.
Stadco’s backlog as of March 31, 2026 was $22,793 as new orders for components related to a variety of programs, including military aircraft, military helicopter, and military space programs, continue to flow to us from our existing customer base of prime defense contractors.
Cost of Revenue and Gross Profit
Consolidated – Cost of revenue consists primarily of raw materials, parts, labor, overhead and subcontracting costs. Our cost of revenue for the fiscal year ended March 31, 2026, was $26,669, or 10% lower when compared to the fiscal year ended March 31, 2025. Gross profit increased by $646, or 15% and gross margin expanded to 16% compared with 13% in the same period a year ago. Our project mix remains favorable but has changed when compared with the same period a year ago.
Ranor – Gross profit increased by $650 or 11% when compared to the same period a year ago, and gross margin expanded as cost of revenue decreased by $1,504 or 12%. Ranor had a favorable project mix in fiscal 2026 but with a different mix of customer products that resulted in a favorable materials variance with more direct labor hours utilized.
28
Stadco – Gross profit was negative $1,349 for the fiscal year ended March 31, 2026, slightly higher when compared to the same period a year ago, as Stadco continues to work through certain unfavorable legacy contracts and first article parts. Cost of revenue decreased by $1,053 or 6% on a favorable materials variance and less direct labor hours utilized. Also, repairs and maintenance costs, which had a negative impact on manufacturing during fiscal 2025, decreased by 28% in fiscal 2026.
Selling, General and Administrative (SG&A) Expenses
| | 2026 | | 2025 | | Changes |
| |||||||||
| | | | | Percent of | | | | | Percent of | | | | | | |
(dollars in thousands) | | Amount | | Revenue | | Amount | | Revenue | | Amount | | Percent |
| |||
Ranor | | $ | 2,552 | | 8 | % | $ | 2,545 | | 7 | % | $ | 7 | | — | % |
Stadco | | | 2,788 | | 9 | % | | 3,298 | | 10 | % | | (510) | | (15) | % |
Corporate and unallocated | | | 702 | | 2 | % | | 644 | | 2 | % | | 58 | | 9 | % |
Consolidated SG&A | | $ | 6,042 | | 19 | % | $ | 6,487 | | 19 | % | $ | (445) | | (7) | % |
Consolidated – Total selling, general and administrative expenses for the fiscal year ended March 31, 2026, decreased by $445, or 7%, as a decrease in professional fees and office costs more than offset an increase in compensation and benefits.
Ranor – SG&A expense increased by $7 primarily as an increase in compensation costs for staff additions slightly offset a decrease in professional fees and other office expenses.
Stadco – SG&A expense decreased by $510 primarily on a decrease in professional fees and office costs.
Corporate and unallocated – SG&A increased year-over-year primarily on an increase in stock-based compensation. That increase was offset in part a change in fair value ($419) for a breakup fee in connection with the terminated acquisition of Votaw Precision Technologies, Inc., or the “Votaw acquisition” which was evident in fiscal 2025. There were no breakup fees recorded in fiscal 2026.
Operating (loss) income
| | 2026 | | 2025 | | Changes | | |||||||||
| | | | | Percent of | | | | | Percent of | | | | | | |
(dollars in thousands) | | Amount | | Revenue | | Amount | | Revenue | | Amount | | Percent | | |||
Ranor | | $ | 3,772 | | 12 | % | $ | 3,129 | | 9 | % | $ | 643 | | 21 | % |
Stadco |
| | (4,137) | | (13) | % | | (4,643) | | (13) | % | | 506 | | 11 | % |
Corporate and unallocated |
| | (702) | | (2) | % | | (644) | | (2) | % | | (58) | | (9) | % |
Operating loss | | $ | (1,067) | | (3) | % | $ | (2,158) | | (6) | % | $ | 1,091 | | 51 | % |
Consolidated – As a result of the foregoing, for the fiscal year ended March 31, 2026, we reported an operating loss of $1,067 compared with operating loss of $2,158 for the fiscal year ended March 31, 2025. The change was primarily due to higher operating income at Ranor and lower operating losses at Stadco.
Ranor – Operating income increased, as profit margins expanded on lower manufacturing costs and improved productivity.
Stadco – Operating loss decreased primarily on lower SG&A expenses.
Corporate and unallocated – Operating loss increased as an increase in stock-based compensation more than offset a decrease in costs related to the Votaw acquisition.
Other Income (Expense), net
The following table presents other income (expense) for the fiscal years ended March 31:
(dollars in thousands) | | 2026 | | 2025 | | $ Change | | % Change |
| |||
Other expense, net | | $ | (81) | | $ | (51) | | $ | (30) |
| (60) | % |
Interest expense | | $ | (415) | | $ | (438) | | $ | 23 |
| 5 | % |
Amortization of debt issue costs | | $ | (70) | | $ | (103) | | $ | 33 |
| 32 | % |
29
Other expense, net, for the fiscal year ended March 31, 2026, includes a write-off of $83 for costs in connection with refinancing activities and other interest income of $2. Other expense for the fiscal year ended March 31, 2025, includes a payment of $108 to investors as liquidated damages plus interest for a late registration filing in connection with the July 2024 private placement. That payment more than offset other income of $45 from non-operating filming activities, plus a vendor rebate and other interest income.
Interest expense decreased by $23 when compared with the same period a year ago, primarily on lower scheduled interest payments for the Ranor and Stadco Term Loans.
Amortization of debt issue costs for the fiscal year ended March 31, 2026 decreased by 32% on lower amortization in connection with the debt issue costs.
Income Taxes
During the fiscal year ended March 31, 2026, there has been no change in our judgment about the realizability of deferred tax assets in future years. For the fiscal year ended March 31, 2026 and 2025, the Company recorded tax expense and tax benefit of $31 and $2, respectively.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The valuation allowance on deferred tax assets at March 31, 2026 and 2025 was $6,200 and $5,722, respectively. We believe that it is more likely than not that the benefit from certain state NOL carryforwards and other deferred tax assets will not be realized. The assessment was based on the weight of negative evidence at the balance sheet date, our recent operating losses and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels. In recognition of this risk, we continue to provide a valuation allowance on these items.
Net Loss
As a result of the foregoing, for fiscal 2026, we recorded a net loss of $1,664, or $0.17 per share basic and fully diluted, compared with a net loss of $2,748, or $0.29 per share basic and fully diluted in fiscal 2025.
Liquidity, Capital Resources and Going Concern
Our liquidity is highly dependent on the availability of financing facilities and our ability to maintain gross profit and operating income. As of March 31, 2026, we had $1,485 in total available liquidity, consisting of $431 in cash, and $1,054 in undrawn capacity under our Revolver Loan. As of March 31, 2025, we had $1,451 in total available liquidity, consisting of $195 in cash and $1,256 in undrawn capacity under our Revolver Loan.
There was $3,446 and $3,150 outstanding under the Revolver Loan on March 31, 2026 and 2025, respectively. The Company pays interest at an adjusted SOFR - based rate. Interest - only payments on advances made under the Revolver Loan are payable monthly in arrears. Interest paid and accrued on advances made under the Revolver Loan during fiscal 2026 and 2025, totaled $200 and $197, respectively. The weighted average interest rate on March 31, 2026 and 2025 was 6.70% and 7.47%, respectively. The average amount outstanding during the fiscal year ended March 31, 2026 and 2025 was $2,983 and $2,600, respectively. At March 31, 2026 our working capital was negative $441 because of the reclassification of our long-term debt from noncurrent to current in the consolidated balance sheet. The table below presents selected liquidity and capital measures on:
| | March 31, | | March 31, | | Change | |||
(dollars in thousands) | | 2026 | | 2025 | | Amount | |||
Cash | | $ | 431 | | $ | 195 | | $ | 236 |
Working capital | | $ | (441) | | $ | (1,570) | | $ | 1,129 |
Total debt | | $ | 7,037 | | $ | 7,424 | | $ | (387) |
Total stockholders’ equity | | $ | 7,673 | | $ | 8,740 | | $ | (1,067) |
30
The next table summarizes changes in cash by primary component in the cash flows statements for the fiscal years ended:
| | March 31, | | March 31, | | Change | |||
(dollars in thousands) | | 2026 | | 2025 | | Amount | |||
Operating activities | | $ | 6 | | $ | (599) | | $ | 605 |
Investing activities | |
| 868 | |
| (1,081) | |
| 1,949 |
Financing activities | |
| (638) | |
| 1,737 | |
| (2,375) |
Net increase in cash | | $ | 236 | | $ | 57 | | $ | 179 |
Operating activities
Apart from our loan facilities, our primary sources of cash are provided by customer revenue, customer contract advances, and associated accounts receivable collections. Many of our customers make advance payments and progress payments under the terms of each manufacturing contract. The composition of our accounts receivable collections mix changes between advance payments and customer payments made after shipment of finished goods. Our cash flows can fluctuate from period to period as we make progress with customer project milestones and the timing of progress payments.
Cash provided by operating activities for the fiscal year ended March 31, 2026 was $6, and cash used in operating activities for the fiscal year ended March 31, 2025 was $599. Net loss adjusted by our non-cash items provided $1,865 and $813 for the fiscal years ended March 31, 2026 and 2025, respectively. For the fiscal year ended March 31, 2026 and 2025, we used $1,859 and $1,412 of cash, respectively, for changes in operating assets and liabilities.
Investing activities
In fiscal 2026 we invested $3,265 in new factory machinery and equipment and were reimbursed for $4,133 of certain purchases under a supplier development fund.
In fiscal 2025 we invested $4,122 in new factory machinery and equipment and were reimbursed for $3,041 of certain purchases under a supplier development fund.
We are subject to certain financial debt covenants and may not spend more than $1,500 on new machinery and equipment during any single fiscal year tested on an annual basis at the end of each fiscal year. We estimate that our spending on new machinery and equipment in fiscal 2027, including supplier development funding, will exceed that spending limitation.
Financing activities
In fiscal 2026 we drew down $18,236 of proceeds under the Revolver Loan and repaid $17,940 during the same period. We also used $695 in cash to pay down debt principal and make periodic lease payments. We also used $239 in cash in connection with refinancing activities and the Revolver Loan renewals.
We drew down $13,876 of proceeds under our Revolver Loan during fiscal 2025 and repaid $13,511 during the same period. We also used $663 of cash to pay down debt principal and make periodic lease payments and financed the purchase of certain equipment at Stadco for $65.
In fiscal 2025, the Company sold 666,100 shares of the Company’s common stock, par value $0.0001 per share, and 666,100 common stock purchase warrants to purchase 666,100 shares of Common Stock in a private placement at an aggregate purchase price of $2,299. Placement agent’s fees in connection with the offering totaled $247.
All of the above activity resulted in a net increase in cash of $236 and $57 for fiscal 2026 and 2025, respectively.
Bank Term and Revolver Loans
On August 25, 2021, the Company entered into the Loan Agreement. Under the Loan Agreement, the Bank provided the Ranor Term Loan and the Revolver Loan. In addition, the Bank provided the term loan in the original amount of $4,000, or the “Stadco Term Loan.” The proceeds of the original term loan of $2,850, or the “Ranor Term Loan,” were used to refinance existing mortgage debt of Ranor. The proceeds of the Revolver Loan are used for working capital and general corporate purposes of the Company. Payments for the
31
original Ranor Term Loan began on January 20, 2017, and until the facility was amended in December 2022, the Company paid monthly installments of $19 each, inclusive of interest at a fixed rate of 5.21% per annum.
The proceeds of the Stadco Term Loan were used to support the acquisition of Stadco and refinance existing indebtedness of Stadco. Interest on the Stadco Term Loan is due on unpaid balances beginning on August 25, 2021, at a fixed rate per annum equal to the 7-year Federal Home Loan Bank of Boston Classic Advance Rate plus 2.25%. Since September 25, 2021, and on the 25th day of each month thereafter, Stadco has made and will continue to make monthly payments of principal and interest in the amount of $54 each, with all outstanding principal and accrued interest due and payable on August 25, 2028.
The Borrowers agree that their combined annual capital expenditures shall not exceed $1,500. Compliance shall be tested annually. On June 12, 2023, the Company and the Bank executed a waiver under which the Bank waived the Company’s noncompliance with the capital expenditure limit and acknowledged that specified capital expenditures can be excluded from the calculation of the Borrowers combined annual expenditures for the fiscal year ended March 31, 2024. For the fiscal years ended March 31, 2026 and 2025, the Company, including specified capital expenditures, exceeded combined annual capital expenditures of $1,500.
Between December 20, 2021 and January 16, 2026, Ranor and certain affiliates of the Company entered into thirteen separate amendments to the Loan Agreement to, among other things, extend the maturity date of the Ranor Term Loan and Revolver Loan to December 15, 2027 and May 15, 2026, respectively. In addition, the amendments (i) limited the use of proceeds from the Revolver Loan by the Company or its affiliates to $2,000 in the aggregate for due diligence and related professional costs incurred on or prior to May 10, 2024 in connection with any acquisitions, (ii) amended the maximum principal amount of the Revolver Loan from $5,000 to $4,500; (iii) made certain changes to the amount and methods of valuation of equipment securing repayment of the borrowed funds, and (iv) effective June 1, 2024, increased the Term SOFR Margin (as defined in the Amendment) used to calculate the interest rate from 2.25% per annum to 2.50% per annum. The interest rate on the Ranor Term Loan is 6.05%, the monthly payment on the Ranor Term Loan is $17 with benchmark SOFR-based pricing conventions.
On May 13, 2026, Ranor and the other borrowers entered into a fourteenth amendment to the Loan Agreement, which among other things, extended the maturity date of the Revolver Loan from May 15, 2026 to September 15, 2026.
As a result of the Borrowers’ failure to satisfy the required Balance Sheet Leverage Ratio for the twelve (12) month period ending March 31, 2026, as set forth in the Loan Agreement, or the “Existing Default”, the Borrowers acknowledge that a certain Event of Default has occurred and is continuing under the Loan Agreement. The borrowers further acknowledge that the sixth amendment to the Loan Agreement constitutes written notice pursuant to the loan documents of such Existing Default. Regardless of entering into the most recent amendment to the Loan Agreement or any discussions between the Borrowers and the Bank, the Bank expressly reserves any and all rights and remedies available to it under the loan documents, and under applicable law, including, without limitation, its right to choose to accelerate and demand the outstanding indebtedness evidenced by the loan documents and seek immediate repayment in full, and institute the default rate of interest as of the date of the occurrence of the default or at any time thereafter, as a result of any default or event of default, including, without limitation, the Existing Default, that has arisen or may arise. No such discussions or the entering into the most recent amendment to the Loan Agreement shall imply any course of conduct or any agreement on the part of the Bank to waive any of its rights and remedies or to forbear from taking any action authorized by the loan documents or by applicable law while discussions continue.
There was $7,031 and $7,387 outstanding under the Loan Agreement on March 31, 2026 and 2025, respectively. Without a waiver, the lender has the right, but not the obligation, to demand repayment from the Company for noncompliance with the debt covenants. In addition, the Bank retains the right to act on covenant violations that occur after the date of delivery of any waiver. The lender has not granted us a waiver. As such, we need to seek alternative financing to pay these obligations as the Company does not have existing facilities or sufficient cash on hand to satisfy these obligations. It is also probable that the Company will not be in compliance with the same debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our consolidated balance sheet.
On July 3, 2024, the Company entered into a Security Purchase Agreement with certain accredited investors, pursuant to which the Company sold common stock and warrants in a private placement at an aggregate purchase price of $2,299. The combined purchase price for one share of common stock and one warrant was $3.45. The purpose of the sale of the common stock and warrants was to raise working capital for use by the Company.
The Company continues to explore various means of strengthening its liquidity position and ensuring compliance with its debt financing covenants by making Stadco operations profitable, renewing our revolver loan, or entering into alternative debt facilities.
In order for us to continue operations beyond the next twelve months from the date of issuance of the financial statements and to be able to discharge our liabilities and commitments in the normal course of business, we must renew our revolver loan or seek alternative
32
financing by September 15, 2026. We must mitigate our recurring operating losses at our Stadco subsidiary, efficiently increase utilization of our manufacturing capacity at Stadco and improve the manufacturing process. We plan to closely monitor our expenses and, if required, will reduce operating costs to enhance liquidity.
The uncertainty associated with the recurring operating losses at Stadco, the revolver loan renewal, the need for alternative financing, and compliance with debt covenants at subsequent measurement dates raise substantial doubt about our ability to continue as a going concern for at least one-year after the date the consolidated financial statements included in this Annual Report on Form 10-K are issued.
Collateral securing all the above obligations comprises all personal and real property of the Company, including cash, accounts receivable, inventories, equipment, and financial assets.
Commitments and Contractual Obligations
The following contractual obligations associated with our normal business activities are expected to result in cash payments in future periods, and include the following material items on March 31, 2026:
| ● | Our debt obligations under the bank loan agreement, including fixed and variable-rate debt, totaled $7,031, and, because of debt covenant violations, are classified as current in the consolidated balance sheets. |
| ● | We enter into various commitments with suppliers for the purchase of raw materials and work supplies. Our outstanding unconditional contractual commitments, including the purchase of raw materials and supplies goods, totaled $2,805, all of it due to be incurred and paid within the next twelve months. |
| ● | We also have $13,247 in purchase obligations outstanding for the purchase of machinery and equipment under an arrangement with a certain customer where the Company is reimbursed in full for all purchases. |
| ● | Our operating lease obligations, including imputed interest, totaled $3,912 for buildings through 2030, with $939 due annually for each of the next four years and $156 in year six. |
There were no off-balance sheet arrangements as of March 31, 2026.
EBITDA Non-GAAP Financial Measure
To complement our consolidated statements of operations and consolidated statements of cash flows, we use EBITDA, a non-GAAP financial measure. Net income (loss) is the financial measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to EBITDA. We believe EBITDA provides our board of directors, management, and investors with a helpful measure for comparing our operating performance with the performance of other companies that have different financing and capital structures or tax rates. We also believe that EBITDA is a measure frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry, and is a measure contained in our debt covenants. However, while we consider EBITDA to be an important measure of operating performance, EBITDA and other non-GAAP financial measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
We define EBITDA as net income (loss) plus interest, income taxes, depreciation, and amortization. Net loss was $1,664 for the fiscal year ended March 31, 2026, as compared to net loss of $2,748 for the year ended March 31, 2025. EBITDA, a non-GAAP financial measure, was $1,646 for the year ended March 31, 2026, compared to $587 for the year ended March 31, 2025. The following table provides a reconciliation of EBITDA to net loss, the most directly comparable U.S. GAAP measure reported in our consolidated financial statements for the fiscal years ended:
| | March 31, | | March 31, | | Change | |||
(dollars in thousands) | | 2026 | | 2025 | | Amount | |||
Net loss | | $ | (1,664) | | $ | (2,748) | | $ | 1,084 |
Income tax expense (benefit) | |
| 31 | | | (2) | | | 33 |
Interest expense (1) | |
| 485 | |
| 541 | |
| (56) |
Depreciation and amortization | |
| 2,794 | |
| 2,796 | |
| (2) |
EBITDA | | $ | 1,646 | | $ | 587 | | $ | 1,059 |
| (1) | Includes amortization of debt issue costs. |
Item 7A. Quantitative and Qualitative Disclosure About Market Risk.
As a smaller reporting company, we have elected not to provide the information required by this Item.
33
Item 8. Financial Statements and Supplementary Data.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of
TechPrecision Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of TechPrecision Corporation (the “Company”) as of March 31, 2026 and 2025, the related consolidated statements of operations, stockholders’ equity and cash flows for the two years in the period ended March 31, 2026, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for the two years in the period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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 the 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 audits 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 the 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 the critical audit matter 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.
Revenue – Revenue Earned Over Time and Contract Estimates
As described in Note 2 of the consolidated financial statements, for those long-term fixed-price contracts for which control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company measures progress for performance obligations satisfied over time using labor hours and materials used, we have also tested other inputs
34
such as burden and estimated costs to complete. The estimation of progress toward completion is subject to assumptions and variables requiring significant judgment. Auditing the Company’s estimate of total expected contract costs and effort necessary to completion is especially challenging due to the judgmental and subjective nature of the estimation of costs to complete, including material, labor and subcontracting costs, unique to each revenue arrangement. Revisions in contract estimates can materially affect the Company’s operating results.
We obtained an understanding of and evaluated the Company’s revenue recognition procedures to test the estimate of expected contract costs to complete and effort necessary to completion, our audit procedures included,
a. | testing significant components of the materials, labor, and burden and estimated costs to complete noted above, |
b. | assessing the completeness of the cost estimates, |
c. | reviewing changes in the estimates from previous periods and testing underlying data used by management, |
d. | testing that projects that can be recognized over time versus a point-in-time, |
e. | discussing project status with operations and finance management responsible for managing the contractual arrangements, |
f. | inspecting evidence to support the assumptions made by management, |
g. | evaluating the key assumptions utilized in development of the expected contract costs to complete the arrangement, |
h. | performing look-back procedures to assess previous estimates as well as performance on similar arrangements, and |
i. | reviewed documentation of management’s estimates as well as continued progress on open arrangements through the reporting date for evidence of changes that would affect estimates as of the balance sheet date. |
/s/
CBIZ CPAs P.C.
We have served as the Company’s auditor since 2013 (such date takes into account the acquisition of the attest business of Marcum llp by CBIZ CPAs P.C. effective November 1, 2024).
June 25, 2026
35
TECHPRECISION CORPORATION
CONSOLIDATED BALANCE SHEETS
| | March 31, | | March 31, | ||
(dollars in thousands, except share and per share data) | | 2026 | | 2025 | ||
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash | | $ | | | $ | |
Accounts receivable, less allowances for credit losses of $ | |
| | |
| |
Contract assets | |
| | |
| |
Raw materials | | | | | | |
Work-in-process | | | | | | |
Other current assets | |
| | |
| |
Total current assets | |
| | |
| |
Property, plant and equipment, net | |
| | |
| |
Right of use asset, net | | | | | | |
Other noncurrent assets | |
| | | | |
Total assets | | $ | | | $ | |
LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | |
Current liabilities: | | | | | | |
Accounts payable | | $ | | | $ | |
Accrued expenses | |
| | |
| |
Income taxes payable | | | | | | — |
Contract liabilities | |
| | |
| |
Customer deposits | | | | | | |
Current portion of long-term lease liability | |
| | |
| |
Current portion of long-term debt, net | | | | | | |
Total current liabilities | |
| | |
| |
Long-term equipment financing | |
| — | |
| |
Long-term lease liability | | | | | | |
Other noncurrent liability | | | | | | |
Total liabilities | | | | | | |
Commitments and contingent liabilities (see Note 15) | | | | | | |
Stockholders’ Equity: | | | | | | |
Common stock - par value $ | |
| | |
| |
Additional paid in capital | |
| | | | |
Accumulated deficit | |
| ( | | | ( |
Total stockholders’ equity | |
| | | | |
Total liabilities and stockholders’ equity | | $ | | | $ | |
See accompanying notes to the consolidated financial statements.
36
TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
| | Years ended March 31, | ||||
(dollars in thousands, except share and per share data) | | 2026 | | 2025 | ||
Revenue | | $ | | | $ | |
Cost of revenue | |
| | | | |
Gross profit | |
| | | | |
Selling, general and administrative | |
| | | | |
Loss from operations | | | ( | | | ( |
Other expense | |
| ( | | | ( |
Interest expense | |
| ( | | | ( |
Total other expense, net | |
| ( | | | ( |
Loss before income taxes | |
| ( | | | ( |
Income tax expense (benefit) | | | | | | ( |
Net loss | | $ | ( | | $ | ( |
Net loss per share – basic and diluted | | $ | ( | | $ | ( |
Weighted average number of shares outstanding – basic and diluted | | | | | | |
See accompanying notes to the consolidated financial statements.
37
TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
|
| |
| | |
| Additional |
| |
| Total | |||
|
| Common | | Par |
| Paid in |
| Accumulated |
| Stockholders’ | ||||
(dollars in thousands, except share data) | | Stock | | Value | | Capital | | Deficit | | Equity | ||||
Balance March 31, 2024 | | | | $ | | | $ | | | $ | ( | | $ | |
Stock issued for termination fee | | | | | — | | | | | | — | | | |
Stock-based compensation | | — | | | — | | | | | | — | | | |
Stock used for tax withholding | | ( | | | — | | | ( | | | — | | | ( |
Sale of stock and warrants, net | | | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | ( | | | ( |
Balance March 31, 2025 | | | | $ | | | $ | | | $ | ( | | $ | |
Stock issued for exercised options | | | | | — | | | — | | | — | | | — |
Stock used for tax withholding | | ( | | | — | | | ( | | | — | | | ( |
Stock-based compensation | | — | | | — | | | | | | — | | | |
Stock awards issued | | | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | ( | | | ( |
Balance March 31, 2026 | | | | $ | | | $ | | | $ | ( | | $ | |
See accompanying notes to the consolidated financial statements.
38
TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | Years Ended March 31, | ||||
(dollars in thousands, except share data) | | 2026 | | 2025 | ||
CASH FLOWS FROM OPERATING ACTIVITIES |
| | |
| | |
Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |
| | |
| |
Depreciation and amortization | |
| | | | |
Amortization of debt issuance costs | |
| | | | |
Write-off debt issuance costs | | | | | | — |
Loss on disposal of equipment | |
| — | | | |
Stock based compensation | |
| | | | |
Change in contract loss provision | |
| ( | | | |
Change in allowance for credit losses | | | | | | ( |
Stock based acquisition termination fee | | | — | | | |
Changes in operating assets and liabilities: | |
| | | | |
Accounts receivable | |
| ( | | | |
Contract assets | |
| ( | | | ( |
Work-in-process and raw materials | |
| ( | | | |
Other current assets | |
| ( | | | |
Accounts payable | |
| ( | | | |
Accrued expenses | |
| ( | | | ( |
Income taxes payable | | | | | | — |
Contract liabilities and customer deposits | |
| | | | ( |
Other noncurrent liabilities | | | ( | | | ( |
Net cash provided by (used in) operating activities | |
| | | | ( |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | |
| |
Purchases of property, plant, and equipment | |
| ( | | | ( |
Reimbursements for purchases of fixed assets | |
| | | | |
Net cash provided by (used in) investing activities | | | | | | ( |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | |
| |
Proceeds from revolver loan | |
| | | | |
Repayment of revolver loan | | | ( | | | ( |
Proceeds from private placement | |
| — | | | |
Private placement fees | | | — | | | ( |
Proceeds from equipment financing | | | — | | | |
Debt issuance costs | |
| ( | | | ( |
Principal payments for leases | | | ( | | | ( |
Repayment of long-term debt | |
| ( | | | ( |
Net cash (used in) provided by financing activities | |
| ( | | | |
Net increase in cash | |
| | | | |
Cash beginning of period | | | | | | |
Cash end of period | | $ | | | $ | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION | | | | | | |
Cash paid during the year for interest | | $ | | | $ | |
Income taxes paid, net of refunds | | $ | | | $ | — |
See accompanying notes to the consolidated financial statements.
39
SUPPLEMENTAL INFORMATION – NONCASH TRANSACTIONS:
Fiscal year ended March 31, 2026
Noncash Financing – In fiscal 2026, there were options exercised to purchase
Fiscal year ended March 31, 2025
Noncash Operating - On April 29, 2024, we extinguished a liability of $
Noncash Financing - On April 29, 2024, we issued
40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share and per share data)
NOTE 1 - DESCRIPTION OF BUSINESS
TechPrecision Corporation, or “TechPrecision”, is a Delaware corporation organized in February 2005 under the name Lounsberry Holdings II, Inc. On February 24, 2006, we acquired all the issued and outstanding capital stock of our wholly owned subsidiary Ranor, Inc., or “Ranor.” Ranor, together with its predecessors, has been in continuous operation since 1956. The name was changed to TechPrecision Corporation on March 6, 2006.
On August 25, 2021, the Company completed its acquisition of Stadco, pursuant to that certain stock purchase agreement with Acquisition Sub, Stadco Acquisition, LLC, Stadco and each equity holder of Stadco Acquisition, LLC. On the closing date, the Company, through Acquisition Sub, acquired all the issued and outstanding capital stock of Stadco from Stadco Acquisition, LLC in exchange for the issuance of shares of the Company’s common stock to Stadco Acquisition, LLC. As a result of the acquisition, Stadco is now our wholly owned indirect subsidiary.
TechPrecision is the parent company of Ranor, Westminster Credit Holdings, LLC, or “WCH”, Stadco New Acquisition, LLC, or “Acquisition Sub”, and Stadco. TechPrecision, Ranor, WCH, Acquisition Sub and Stadco are collectively referred to as the “Company”, “we”, “us” or “our”.
We are a custom manufacturer of precision, large-scale fabrication components and precision, large-scale machined metal structural components. The components that we manufacture are customer designed. We sell to customers in two main industry sections: defense and precision industrial markets. All our operations and customers are in the United States, or “U.S.”.
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation - The accompanying consolidated financial statements include the accounts of TechPrecision, Ranor, Stadco, and Westminster Credit Holdings, LLC. Intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates in the Preparation of Financial Statements - In preparing the consolidated financial statements in conformity with generally accepted accounting principles in the United States, or “U.S. GAAP”, and SEC requirements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reported period. We continually evaluate our estimates, including those related to revenue recognition, long-lived assets, and income taxes. We base our estimates on historical and current experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates.
Going Concern, Risks and Uncertainties - For the fiscal years ended March 31, 2026 and 2025, we reported pre-tax losses of $
As of March 31, 2026, we had $
On August 25, 2021, Ranor, Inc. along with certain affiliates of the Company, or the “Borrowers”, entered into that certain Amended and Restated Loan Agreement with the Bank, or the “Loan Agreement”. Under the Loan Agreement, Beacon Bank & Trust, successor by merger to Berkshire Bank, or the “Bank”, continued to provide the Ranor Term Loan (as defined below) and the revolving line of credit, or the “Revolver Loan”, under which, among other things, the Bank provided a revolving line of credit loan to the Borrowers which currently has a maximum principal amount of $
Since March 31, 2025, Ranor and certain affiliates of the Company entered into four additional separate amendments to the Amended and Restated Loan Agreement and First Amendment to Promissory Note that extended the maturity date of the Revolver Loan from 1) April 30, 2025 to August 29, 2025, 2) from August 29, 2025 to January 16, 2026, 3) from January 16, 2026 to May 15, 2026, and 4) from May 15, 2026 to September 15, 2026.
41
The Company acknowledges that a certain event of default has occurred and is continuing under the Loan Agreement (as defined below) as a result of the Company’s failure to satisfy the balance sheet leverage covenant as of March 31, 2026. As of March 31, 2025, the Company failed to satisfy the debt service coverage ratio and balance sheet leverage covenants. The lender reserves any and all rights and remedies available to it under the Loan Agreement, including, without limitation, its right to choose to accelerate and demand the outstanding indebtedness evidenced by the loan documents, and to seek immediate repayment in full. The lender could also stop honoring drawdowns under the revolver loan.
There was $
The Company continues to explore various means of strengthening its liquidity position and ensuring compliance with its debt financing covenants by improving the operating profitability at Stadco, renewing our revolver loan, or entering into alternative debt facilities.
In order for us to continue operations beyond the next twelve months from the date of issuance of the financial statements and to be able to discharge our liabilities and commitments in the normal course of business, we must renew our revolver loan or seek alternative financing by September 15, 2026. The bank retains the right to act on covenant violations and is under no obligation to allow draws on the revolver through the expiration date. We must mitigate our recurring operating losses at our Stadco subsidiary, efficiently increase utilization of our manufacturing capacity at Stadco and improve the manufacturing process. We plan to closely monitor our expenses and, if required, will reduce operating costs to enhance liquidity.
The uncertainty associated with the recurring operating losses at Stadco, the revolver loan renewal, the need for alternative financing, and compliance with debt covenants at subsequent measurement dates raise substantial doubt about our ability to continue as a going concern for at least one-year after the date the consolidated financial statements included in this Annual Report on Form 10-K are issued.
The consolidated financial statements for the fiscal year ended March 31, 2026, were prepared on the basis of a going concern which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should we be required to liquidate assets. Our ability to satisfy our current liabilities and to continue as a going concern is dependent upon the Company’s compliance with the debt covenants, renewing the revolver loan, and its ability to grow revenue and reduce costs at Stadco. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Cash and cash equivalents - Our cash deposits, and money market accounts, if applicable, are maintained in a large U.S. regional bank. Holdings of highly liquid investments with maturities of three months or less, when purchased, are considered to be cash equivalents. There were no cash equivalent accounts or investments as of March 31, 2026 and 2025.
Accounts receivable and allowance for credit losses - Accounts receivable are comprised of amounts billed and currently due from customers. Accounts receivables are amounts related to any unconditional right the Company has for receiving consideration and are presented as accounts receivable in the consolidated balance sheets. We maintain allowances for credit losses for estimated losses resulting from the inability of our customers to make the required payments. Under the current expected credit loss model, we employ a roll-rate methodology, utilizing historical loss rates and historical trends in credit quality indicators (e.g., delinquency, risk ratings), adjusted to reflect current economic conditions and forecasts of future economic conditions.
Management considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current industry trends, and changes in customer payment terms. Our normal collection cycle ranges between thirty and forty days. Estimated uncollectible amounts are charged to earnings and a credit to a valuation allowance. Balances which remain outstanding after reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Historically, the level of uncollectible accounts has not been significant.
| | March 31, 2026 | | March 31, 2025 | ||
Beginning balance | | $ | ( | | $ | ( |
Current period reversal of (provision for) expected losses | |
| | |
| ( |
Ending balance | | $ | — | | $ | ( |
42
Inventories - Work-in-process and raw materials are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (FIFO) method.
Contract Assets - Contract assets represent the Company’s rights to consideration for work completed but not billed as of the reporting date when the right to payment is not just subject to the passage of time. The amount of contract assets recorded in the consolidated balance sheet reflects revenue recognized on contracts less associated advances and progress billings. These amounts are billed in accordance with the agreed-upon contract terms or upon achievement of contract milestones and recorded at net realizable value.
Property, plant and equipment, net - Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are accounted for on the straight-line method based on estimated useful lives. The amortization of leasehold improvements is based on the shorter of the lease term or the useful life of the improvement. Betterments and large renewals, which extend the life of the asset, are capitalized whereas maintenance and repairs and small renewals are expensed as incurred. The estimated useful lives are machinery and equipment,
Interest is capitalized for assets that are constructed or otherwise produced for our own use, including assets constructed or produced for us by others for which deposits or progress payments have been made. Interest is capitalized to the date the assets are available and ready for use. When an asset is constructed in stages, interest is capitalized for each stage until it is available and ready for use. We use the interest rate incurred on funds borrowed specifically for the project. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life.
In accordance with Accounting Standards Codification, or “ASC”, 360, Property, Plant & Equipment, our property, plant and equipment is tested for impairment when triggering events occur and, if impaired, written down to fair value based on either discounted cash flows or appraised values. The carrying amount of an asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group.
In the fourth quarter of fiscal 2025 and fiscal 2026, we determined that a history of operating losses at Stadco may indicate that the carrying value of the long-lived assets may not be recoverable. As such, we conducted a test for recoverability of long-lived assets at our Stadco segment and determined that the carrying value of the long-lived assets were not impaired.
Leases - Right-of-use assets for operating leases are measured at the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Right-of-use assets for operating leases are subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease liabilities are initially measured at the present value of the unpaid lease payments at the lease commencement date. We had one finance lease outstanding as of March 31, 2026 and 2025, respectively. See Note 14, Leases, for additional information.
Debt Issuance Costs - Costs incurred in connection with obtaining financing for long-term debt are capitalized and presented as a reduction of the carrying amount of the related debt. Costs incurred in connection with obtaining financing for revolving credit facilities and lines of credit are capitalized and presented as reduction of the carrying amount of the revolver loan. Loan acquisition costs are being amortized using the effective interest method over the term of the loan.
Contract Liabilities - Contract liabilities are comprised of advance payments, billings in excess of revenues and deferred revenue amounts. These amounts are recorded as contract liabilities until such obligations are satisfied, either over time as costs are incurred or at a point in time when deliveries are made. Such advances are not generally considered a significant financing component because they are utilized to pay for contract costs within a one-year period. Contract liability amounts are recognized as revenue once control over the underlying performance obligation has transferred to the customer.
43
Fair Value Measurements - We account for fair value of financial instruments in accordance with ASC 820, Fair Value Measurement, which defines fair value and establishes a framework to measure fair value and the related disclosures about fair value measurements. The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The Financial Accounting Standards Board, or FASB, establishes a fair value hierarchy used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Inputs based upon quoted market prices for identical assets or liabilities in active markets at the measurement date; Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and Level 3: Inputs that are management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instruments’ valuation. In addition, we will measure fair value in an inactive or dislocated market based on facts and circumstances and significant management judgment. We will use inputs based on management estimates or assumptions or adjust observable inputs to determine fair value when markets are not active and relevant observable inputs are not available.
ASC 825, Financial Instruments, requires disclosures about the fair value of financial instruments. The carrying amount of cash, accounts receivable, accounts payable, and accrued expenses, as presented in the balance sheet, approximates fair value due to the short-term nature of these instruments. The carrying value of short and long-term borrowings approximates their fair value.
Revenue Recognition - The Company accounts for revenue under Accounting Standards Update, or “ASU”, 2014-09, Revenue from Contracts with Customers (Topic 606), or “ASC 606”, and related amendments. ASC 606 sets forth five steps for revenue recognition: identification of the contract, identification of any separate performance obligations in the contracts, determination of the transaction price, allocation of the transaction price to separate performance obligations, and revenue recognition when performance obligations are satisfied.
The Company recognizes revenue over time based on the transfer of control of the promised goods or services to the customer. This transfer occurs over time when the Company has an enforceable right to payment for performance completed to date, and our performance does not create an asset that has an alternative use to the Company. Otherwise, control to the promised goods or services transfers to customers at a point in time. Our customers make advance payments and progress payments under the terms of each manufacturing contract.
The majority of the Company’s contracts have a single performance obligation and provide title to, or grant a security interest in, work-in-process to the customer. In addition, these contracts contain enforceable rights to payment, allowing the Company to recover both its cost and a reasonable margin on performance completed to date. The combination of these factors indicates that the customer controls the asset, and revenue is recognized as the asset is created or enhanced. The Company measures progress for performance obligations satisfied over time using input methods (e.g., costs incurred, resources consumed, labor hours expended, and time elapsed).
Under arrangements where the customer does not have title to, or a security interest in, the work-in-process, our evaluation of whether revenue should be recognized over time requires significant judgment about whether the asset has an alternative use and whether the entity has an enforceable right to payment for performance completed to date. When one or both of these factors is not present, the Company will recognize revenue at the point in time where control over the promised good or service transfers to the customer, i.e. when the customer has taken physical possession of the product the Company has built for the customer.
The Company and its customers may occasionally enter into contract modifications, including change orders. The Company may account for the modification as a separate contract, the termination of an old contract and creation of a new contract, or as part of the original contract, depending on the nature and pricing of the goods or services included in the modification. In general, contract modifications - as well as other changes in estimates of revenue, costs, and profits on a performance obligation - are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes in current and prior periods. A significant change in an estimate of one or more contracts in a period could have a material effect on the consolidated balance sheet or results of operations for that period.
44
If incentives and other contingencies are provided as part of the contract, the Company will include in the initial transaction price the consideration to which it expects to be entitled under the terms and conditions of the contract, generally estimated using an expected value or most likely amount approach. In the context of variable consideration, the Company limits, or constrains, the transaction price to amounts for which the Company believes a significant reversal of revenue is not probable. Adjustments to constrain the transaction price may be due to a portion of the transaction price being more than approved funding, a lack of history with the customer, a lack of history with the goods or services being provided, or other items.
Shipping and handling fees and costs incurred in connection with products sold are recorded in cost of revenue in the consolidated statements of operations and are not considered a performance obligation to our customers.
Contract Estimates - In estimating contract costs, the Company takes into consideration a number of assumptions and estimates regarding risks related to technical requirements and scheduling. Management performs periodic reviews of the contracts to evaluate the underlying risks. Profit margin on any given project could increase if the Company is able to mitigate and retire such risks. Conversely, if the Company is not able to properly manage these risks, cost estimates may increase, resulting in a lower profit margin, or potentially, contract losses.
The cost estimation process requires significant judgment and is based upon the professional knowledge and experience of the Company’s engineers, program managers, and financial professionals. Factors considered in estimating the work to be completed and ultimate contract recovery include the availability, productivity, and cost of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in performance, the availability and timing of funding from the customer, and the recoverability of any claims included in the estimates to complete. Costs allocable to undelivered units are reported as work in process, a component of inventory, in the consolidated balance sheet. Pre-contract fulfillment costs requiring capitalization are not material.
Selling, general and administrative - Selling, general and administrative, or “SG&A”, expenses include items such as executive compensation and benefits, professional fees, business travel and office costs. Advertising costs are nominal and expensed as incurred. Other general and administrative expenses include items for our administrative functions and include costs for items such as office supplies, insurance, legal, accounting, telephone, and other outside services. SG&A consisted of the following for the fiscal year ended March 31:
| | 2026 | | 2025 | ||
Salaries and related expenses |
| $ | |
| $ | |
Professional fees | | | | | | |
Other general and administrative | |
| | |
| |
Stock based acquisition termination fee | |
| — | |
| |
Total Selling, general and administrative | | $ | | | $ | |
Stock-based Compensation - Stock-based compensation represents the cost related to stock-based awards granted to our board of directors, employees, and consultants. We measure stock-based compensation cost at the grant date based on the estimated fair value of the award and recognize the cost as expense on a straight-line basis over the requisite service period. We estimate the fair value of stock options using a Black-Scholes valuation model. Stock-based compensation included in selling, general and administrative expense amounted to $
Net Loss per Share of Common Stock - Basic net loss per common share is computed by dividing net loss income by the weighted average number of shares outstanding during the year. Diluted net loss income per common share is calculated using net loss divided by diluted weighted-average shares. Diluted weighted-average shares include weighted-average shares outstanding plus the dilutive effect of common stock equivalents calculated using the treasury stock method. See Note 6 – Capital Stock and Earnings per Share, for additional disclosures related to net loss per share.
Income Taxes - In accordance with ASC 740, Income Taxes, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
45
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. We recognize the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
We recognize accrued interest and penalties related to income tax liabilities in selling, general and administrative, in our Consolidated Statements of Operations.
NOTE 3 – ACCOUNTING STANDARDS UPDATE
New Accounting Standards Recently Adopted
In December 2023, the Financial Accounting Standards Board, or the “FASB”, issued Accounting Standards Update, or “ASU”, 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This standard update is effective for annual reporting periods beginning after December 15, 2024. As such, the Company adopted this update prospectively on April 1, 2025. This standard update only affects the disclosures in the Income Taxes footnote.
New Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40), Disaggregation of Income Statement Expenses. The ASU will require the Company to provide more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of revenue, SG&A, and research and development). The ASU does not change the expense captions an entity presents on the face of the income statement. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating this update to determine the impact it may have on the disclosures to its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide all entities with a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this update affect entities that apply the practical expedient when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company will adopt the amendments in this update on April 1, 2026 and does not expect a material impact on its consolidated financial statements and disclosures.
NOTE 4 – REVENUE
The Company generates revenue primarily from performance obligations completed under contracts with customers in two main market sectors: defense and precision industrial. The period over which the Company fulfils its obligations can be between and . The Company invoices and receives related payments based upon performance progress not less frequently than monthly.
Revenue is recognized over-time or at a point-in-time given the terms and conditions of the related contracts. The Company utilizes an inputs methodology based on labor hours, materials, and other estimated costs to complete a contract to measure performance progress. This model best depicts the transfer of control to the customer. The Company’s contract portfolio comprises fixed-price contracts and provides for product and service type revenue.
46
The following table presents revenue on a disaggregated basis by market and contract type:
Revenue by market | | Defense | | Industrial | | Totals | |||
Year ended March 31, 2026 | | $ | | | $ | | | $ | |
Year ended March 31, 2025 | | $ | | | $ | | | $ | |
Revenue by contract type | | Over-time | | Point-in-time | | Totals | |||
Year ended March 31, 2026 | | $ | | | $ | | | $ | |
Year ended March 31, 2025 | | $ | | | $ | | | $ | |
As of March 31, 2026, the Company had $
We are dependent each year on a small number of customers who generate a significant portion of our business, and these customers change from year to year. The following table sets forth revenues from customers who accounted for more than 10% of our revenue for the fiscal years ended:
| | March 31, 2026 | | March 31, 2025 |
| ||||||
Customer | | Amount | | Percent | | Amount | | Percent |
| ||
Customer A | | $ | |
| | % | $ | |
| | % |
Customer B | | $ | * |
| * | % | $ | |
| | % |
Customer C | | $ | |
| | % | $ | |
| | % |
Customer D | | $ | | | | % | $ | * | | * | % |
Customer E | | $ | | | | % | $ | | | | % |
Customer F | | $ | * | | * | % | $ | | | | % |
Customer G | | $ | * | | * | % | $ | * | | * | % |
* | Less than 10% of total |
The following table depicts total revenue generated by the individual customers in the above table by segment that accounted for 10% or more of our revenue in fiscal years ended:
| | March 31, 2026 | | March 31, 2025 | | ||||||
Revenue | | Amount | | Percent | | Amount | | Percent |
| ||
Ranor | | $ | |
| | % | $ | |
| | % |
Stadco | | $ | |
| | % | $ | |
| | % |
In our consolidated balance sheet, contract assets and contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets consist of the following as of:
| | | | | Progress | | | | |
Contract assets | | Unbilled | | Payments | | Total | |||
March 31, 2026 | | $ | | | $ | ( | | $ | |
March 31, 2025 | | $ | | | $ | ( | | $ | |
For the fiscal years ended March 31, 2026 and 2025, we recognized revenue of $
| | Opening | | | | | Obligations | | Closing | |||
Contract liabilities | | Balance | | Billed | | Satisfied | | Balance | ||||
March 31, 2026 | | $ | | | $ | | | $ | ( | | $ | |
March 31, 2025 | | $ | | | $ | | | $ | ( | | $ | |
47
NOTE 5 – INCOME TAXES
We account for income taxes under ASC 740, Income Taxes. The following table reflects loss from continuing operations by location, and the provision for income taxes for the applicable fiscal years ended:
| | March 31, 2026 | | March 31, 2025 | ||
Loss before income taxes | | $ | ( | | $ | ( |
Income tax expense (benefit) | |
| | |
| ( |
Net loss | | $ | ( | | $ | ( |
The Components of the income tax provision consist of the following for the fiscal years ended: | | March 31, 2026 | | March 31, 2025 | ||
Current: |
| | |
| | |
Federal | | $ | — | | $ | ( |
State | |
| | |
| ( |
Foreign | | | — | | | — |
Total Current | | $ | | | $ | ( |
Deferred: | |
| | |
| |
Federal | | $ | — | | $ | — |
State | |
| — | |
| — |
Foreign | | | — | | | — |
Total Deferred | | $ | — | | $ | — |
Total: | | | | | | |
Federal | | | — | | | ( |
State | | | | | | ( |
Foreign | | | — | | | — |
Total expense (benefit) | | $ | | | $ | ( |
Our fiscal 2026 and 2025 taxes were measured at the U.S. statutory income tax rate of
| | March 31, 2026 |
| ||||
U.S. statutory income tax | | $ | ( | | | | % |
State income tax, net of federal benefits | |
| | |
| ( | % |
Changes in the valuation allowance | | | | | | ( | % |
Stock compensation | |
| ( | |
| | % |
Other nondeductible items | |
| | |
| ( | % |
Adjustment to prior year deferred balance | | | ( | | | | % |
| $ | | | | ( | % | |
* | For the fiscal year ended March 31, 2026, state and local income taxes in California comprised the majority of state and local income tax expense, net of federal effects. |
The next table reconciles income taxes computed at the U.S. federal statutory rate to actual tax expense, prior to the adoption of ASU 2023-09 for the fiscal year ended:
| | March 31, 2025 |
| |
U.S. statutory income tax | | $ | ( | |
State income tax, net of federal benefit | |
| | |
Change in valuation allowance | |
| | |
Other | |
| | |
Income tax benefit | | $ | ( | |
|
| | % | |
48
Components of deferred income tax assets and liabilities on: | | March 31, 2026 | | March 31, 2025 | ||
Deferred tax assets: |
| | |
| | |
Net operating loss carryforward | | $ | | | $ | |
Compensation | |
| | |
| |
Stock based compensation awards | | | | | | |
Operating leases | | | | | | |
Other items not currently deductible | |
| | |
| |
Total deferred tax assets | |
| | |
| |
Valuation allowance | | | ( | | | ( |
Net deferred tax assets | |
| | |
| |
Deferred tax liabilities: | | | | | | |
Depreciation | | | ( | | | ( |
Operating leases | | | ( | | | ( |
Total deferred tax liabilities | |
| ( | |
| ( |
Deferred taxes, net | | $ | | | $ | |
In assessing the recoverability of deferred tax assets, we consider whether it is more likely than not that some portion or all the deferred tax assets will not be realized. We have determined that it is more likely than not that certain future tax benefits may not be realized. The assessment was based on the weight of negative evidence at the balance sheet date, our recent operating losses and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels. Accordingly, a valuation allowance has been recorded against deferred tax assets that are unlikely to be realized. Realization of deferred tax assets will depend on the generation of sufficient taxable income in the appropriate jurisdictions, the reversal of deferred tax liabilities, tax planning strategies and other factors prior to the expiration date of the carryforwards. A change in the estimates used to make this determination could require an increase or a reduction in the valuation allowance currently recorded against those deferred tax assets. The valuation allowance on deferred tax assets at March 31, 2026 and 2025 was $
As of March 31, 2026 we had federal net operating losses of $
We have not accrued any penalties with respect to uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction and various U.S. state jurisdictions. Tax years 2022 and forward remain open for examination.
Income taxes paid, net of refunds | | March 31, 2026 | |
Federal | | $ | — |
States: | | | |
California | | | |
Other | | | — |
Total State | | $ | |
Foreign | |
| — |
Total income taxes paid, net of refunds | | $ | |
NOTE 6 – CAPITAL STOCK and EARNINGS PER SHARE
Common Stock
We had
49
Preferred Stock
We have
Earnings per Share (EPS)
Basic EPS is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding. Diluted EPS includes the effect of common stock equivalents that would be dilutive. Diluted weighted-average shares include weighted-average shares outstanding plus the dilutive effect of common stock equivalents calculated using the treasury stock method. The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required under FASB ASC 260.
| | March 31, | | March 31, | ||
| | 2026 | | 2025 | ||
Basic and diluted EPS | | | | | | |
Net loss | | $ | ( | | $ | ( |
Weighted average shares – basic and diluted | |
| | | | |
Net loss per share | | $ | ( | | $ | ( |
The following table depicts common stock equivalents that could potentially dilute EPS in the future, but which were not included in the calculation of diluted EPS because to do so would have been antidilutive for the periods presented:
| | March 31, 2026 | | March 31, 2025 |
Stock options |
| |
| |
Warrants |
| |
| |
Restricted stock |
| |
| |
From time to time, we may enter contracts that are indexed to and are settled in our own stock, such as warrants. Contracts that require settlement in shares are equity instruments and measured at fair value. Subsequent changes in fair value are not recognized if the contracts continue to be classified as equity. In a fiscal 2025 private placement, we recorded the sale of common stock and warrants to purchase shares of our common stock as shareholder’s equity at a combined purchase price of $
The fair value of the warrants was estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date. Expected volatility of
NOTE 7 – STOCK-BASED COMPENSATION
Our board of directors, upon the recommendation of the compensation committee of our board of directors, approved the 2016 TechPrecision Equity Incentive Plan, or the “2016 Plan”, on November 10, 2016. Our stockholders approved the 2016 Plan at the Company’s Annual Meeting of Stockholders on December 8, 2016. The 2016 Plan succeeds the 2006 Plan (as defined below) and applies to awards granted after the 2016 Plan’s adoption by the Company’s stockholders. We have designed the 2016 Plan to reflect our commitment to having best practices in both compensation and corporate governance. The Plan shall terminate on the
50
The 2016 Plan authorizes the award of incentive and non-qualified stock options, restricted and unrestricted stock awards, restricted stock units, and performance awards to employees, directors, consultants, and other individuals who provide services to TechPrecision or its affiliates. The purpose of the 2016 Plan is to enable TechPrecision and its affiliated companies to recruit and retain highly qualified employees, directors, and consultants; and to provide those employees, directors, and consultants with an incentive for productivity, and an opportunity to share in the growth and value of the Company. Subject to adjustment as provided in the 2016 Plan, the maximum number of shares of common stock that may be issued with respect to awards under the 2016 Plan is
The fair value of the options we grant is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stock. The average dividend yield over the historical period for which volatility was computed is zero. The risk-free interest rate was selected based upon yields of
The following table summarizes information about options granted during the two most recently completed fiscal years:
| | | | | | | | | | Weighted |
| | | | | | | | | | Average |
| | | | Weighted | | Aggregate | | Remaining | ||
| | Number Of | | Average | | Intrinsic | | Contractual Life | ||
| | Options | | Exercise Price | | Value | | (in years) | ||
Outstanding at April 1, 2024 |
| | | $ | | | $ | | | |
Outstanding at March 31, 2025 | | | | $ | | | $ | | | |
Exercised | | ( | | $ | | | $ | | | — |
Outstanding at March 31, 2026 | | | | $ | | | $ | | | |
Vested or expected to vest at March 31, 2026 |
| | | $ | | | $ | | | |
Exercisable and vested at March 31, 2026 |
| | | $ | | | $ | | | |
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price and the exercise price multiplied by the number of in-the-money options on the measurement date) that would have been received by the option holders had all option holders exercised their options on March 31, 2026 and 2025. This amount changes based on the fair value of the Company’s common stock. On March 31, 2026, there was
| | | | Weighted | | | | | | | | |
|
| |
| Average |
| | |
| |
| | |
| | |
| Remaining |
| Weighted | | |
| Weighted | ||
| | Options |
| Contractual | | Average | | Options | | Average | ||
Range of Exercise Prices: | | Outstanding | | Term | | Exercise Price | | Exercisable | | Exercise Price | ||
$ |
| | | | $ | | | | | $ | | |
Stock Awards
On August 3, 2023, pursuant to the 2016 Plan, we issued
51
On November 26, 2024, we issued
On January 24, 2025, pursuant to the 2016 Plan, we awarded
On March 31, 2025, pursuant to the 2016 Plan, following the announcement of our newly appointed CFO, we agreed to grant in the amount of $
On October 2, 2025, the Company issued
On March 6, 2026, pursuant to the 2016 Plan, the Company issued
The total recognized stock-based compensation cost related to all restricted stock awards for the fiscal year ended March 31, 2026 and 2025 was $
NOTE 8 - CONCENTRATION OF RISK
We maintain bank account balances, which, at times, may exceed insured limits. We have not experienced any losses with these accounts and believe that we are not exposed to any significant credit risk with cash.
For the fiscal years ended March 31, 2026 and 2025, one supplier accounted for
52
On March 31, 2026, there were trade accounts receivable balances outstanding from
| | March 31, 2026 | | March 31, 2025 |
| ||||||
Customer | | Amount | | Percent | | Amount | | Percent |
| ||
A | | $ | * | | * | % | $ | | | | % |
B | | $ | * | | * | % | $ | * | | * | % |
C | | $ | * | | * | % | $ | * | | * | % |
D | | $ | * | | * | % | $ | | | | % |
E | | $ | |
| | % | $ | |
| | % |
F | | $ | * | | * | % | $ | * | | * | % |
G | | $ | | | | % | $ | * | | * | % |
* | less than 10% of total |
NOTE 9 - OTHER CURRENT ASSETS
Other current assets included the following as of: | | March 31, 2026 | | March 31, 2025 | ||
Prepaid insurance | | $ | | | $ | |
Prepaid subscriptions | |
| | |
| |
Prepaid taxes | |
| | | | |
Supplier advances | | | | | | — |
Deposits | | | | | | |
Other | | | | | | |
Total | | $ | | | $ | |
NOTE 10 - PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment included the following as of: | | March 31, 2026 | | March 31, 2025 | ||
Land | | $ | | | $ | |
Building and improvements | |
| | |
| |
Machinery and equipment, furniture, and fixtures | |
| | |
| |
Construction-in-progress | |
| | |
| |
Total property, plant, and equipment | |
| | |
| |
Less: accumulated depreciation | |
| ( | |
| ( |
Total property, plant and equipment, net | | $ | | | $ | |
In fiscal 2026 and 2025, we recorded depreciation expense of $
The Company also has an agreement to make additional equipment upgrades for a certain customer. We recognize new purchases as a fixed asset and billings for reimbursement from the customer as a contra-asset. Future depreciation of the asset will be offset directly by the amortization of the contra-asset on a net basis in the statement of operations. The amortization period will match the schedule of depreciation set forth under the fixed asset ledger.
53
NOTE 11 - ACCRUED EXPENSES
Accrued expenses included the following as of: | | March 31, 2026 | | March 31, 2025 | ||
Accrued compensation | | $ | | | $ | |
Provision for claims | | | | | | |
Provision for contract losses | |
| | |
| |
Accrued professional fees | |
| | |
| |
Accrued project costs | |
| | |
| |
Other | |
| | |
| |
Total | | $ | | | $ | |
Accrued compensation includes amounts for executive bonuses, payroll and vacation and holiday pay. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in the provision are recorded in cost of revenue. Accrued project costs are estimates for certain project expenses during the reporting period.
NOTE 12 – DEBT
Long-term debt included the following as of: | | March 31, 2026 | | March 31, 2025 | ||
Stadco Term Loan, at | | $ | | | $ | |
Ranor Term Loan, at | | | | | | |
Ranor Revolver Loan, due September 2026 | | | | | | |
Stadco equipment financing, at | | | | | | |
Total debt | | $ | | | $ | |
Less: debt issue costs unamortized | | $ | | | $ | |
Total debt, net | | $ | | | $ | |
Less: Current portion of long-term debt | | $ | | | $ | |
Total long-term debt, net | | $ | — | | $ | |
Amended and Restated Loan Agreement
On August 25, 2021, the Company entered into the Loan Agreement. Under the Loan Agreement, the Bank will continue to provide the Ranor Term Loan and the revolving line of credit, or the Revolver Loan. In addition, the Bank provided the Stadco Term Loan (as defined below) in the original amount of $
Since December 20, 2021, Ranor and certain affiliates of the Company entered into thirteen separate amendments to the Amended and Restated Loan Agreement and First Amendment to Promissory Note that extended the maturity date of the Ranor Term Loan and Revolver Loan to December 15, 2027 and May 15, 2026, respectively.
On May 13, 2026, Ranor and the other Borrowers entered into a Fourteenth Amendment to Amended and Restated Loan Agreement and Tenth Amendment to Second Amended and Restated Promissory Note with the Bank. The Amendment, among other things, extends the maturity date of the Revolver Loan from May 15, 2026 to September 15, 2026. See Note 17, Subsequent Event.
Stadco Term Loan
On August 25, 2021, Stadco borrowed $
Unamortized debt issue costs on March 31, 2026 and 2025 were $
54
Ranor Term Loan and Revolver Loan
A term loan was made to Ranor by the Bank in 2016 in the amount of $
Ranor and certain affiliates of the Company entered into four separate amendments to the Amended and Restated Loan Agreement and First Amendment to Promissory Note to extend the original maturity date of the Ranor Term Loan from December 20, 2021 to December 15, 2022.
On December 23, 2022, Ranor and certain affiliates of the Company entered into a Fifth Amendment to Amended and Restated Loan Agreement, Fifth Amendment to Promissory Note and First Amendment to Second Amended and Restated Promissory Note, or the “Amendment”. Effective as of December 20, 2022, and the Amendment, among other things (i) extended the maturity date of the Ranor Term Loan to December 15, 2027, (ii) extended the maturity date of the Revolver Loan from December 20, 2022 to December 20, 2023, (iii) increased the interest rate on the Ranor Term Loan from
On June 12, 2023, the Company and the Bank executed a waiver under which the parties agreed to exclude from the calculation of capital expenditures for purposes of the Loan Agreement, any such expenditures made by the Company to the extent they are made using funds provided by customers of the Company for the purpose of making such capital expenditures.
On December 20, 2023, Ranor and certain affiliates of the Company entered into a Sixth Amendment to Amended and Restated Loan Agreement and Second Amendment to Second Amended and Restated Promissory Note, or the “Sixth Amendment”. Effective December 20, 2023, the Sixth Amendment, among other things (i) extended the maturity date of the Revolver Loan from December 20, 2023 to March 20, 2024; (ii) limited the use of proceeds from the Revolver Loan by the Company or its affiliates to $
On March 20, 2024, Ranor and certain affiliates of the Company entered into a Seventh Amendment to Amended and Restated Loan Agreement and Third Amendment to Second Amended and Restated Promissory Note, or the “Seventh Amendment”. Effective March 20, 2024, the Seventh Amendment, among other things (i) extended the maturity date of the Revolver Loan from March 20, 2024 to May 20, 2024; (ii) limited the use of proceeds from the Revolver Loan by the Company or its affiliates to $
On May 28, 2024, Ranor and the other borrowers entered into an Eighth Amendment to Amended and Restated Loan Agreement and Fourth Amendment to Second Amended and Restated Promissory Note with the Bank. Effective May 24, 2024, the Eighth Amendment, among other things, (i) extended the maturity date of the Revolver Loan from May 24, 2024 to August 30, 2024; (ii) amended the maximum principal amount of the Revolver Loan from $
Between September 4, 2024 and May 13, 2026, Ranor and the other borrowers entered into six additional amendments with the Bank, to extend the maturity date of the Revolver Loan to September 15, 2026.
The Company agrees to pay to the Bank, as consideration for the Bank’s agreement to make the Revolver Loan available, a nonrefundable Revolver Loan fee equal to
55
the Revolver Loan will continue to be payable monthly in arrears. Under the amended promissory note for the Revolver Loan, the Company pays interest at the Term SOFR-based rate.
Interest expense under the Revolver Loan during the fiscal year ended March 31, 2026 and 2025 was $
Unamortized debt issue costs on March 31, 2026 and 2025 were $
Loan Covenants
For purposes of this discussion, Ranor and Stadco are referred to together as the “Borrowers”. The Company agreed to maintain compliance with certain financial covenants under the Loan Agreement. Namely, the Borrowers agree to maintain the ratio of the Cash Flow of TechPrecision-to-the Total Debt Service of TechPrecision of not less than
The Borrowers agreed to cause their Balance Sheet Leverage to be less than or equal
The Borrowers agree to maintain a Loan-to-Value Ratio of not greater than
The Borrowers agree that their combined annual capital expenditures shall not exceed $
The Company was also not in compliance with the balance sheet leverage covenant as of March 31, 2026. As of March 31, 2025, the Company was also not in compliance with the debt service ratio and the balance sheet leverage covenants. In addition, the Bank retains the right to act on covenant violations that occur after the date of delivery of any waiver. The lender has not granted us a waiver. It is also probable that the Company will not be in compliance with the same debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our consolidated balance sheet.
Collateral securing all the above obligations comprises all personal and real property of the Company, including cash, accounts receivable, inventories, equipment, and financial assets. The Company’s short-term and long-term debt is all privately held with no public market for this debt and is considered to be Level 3 under the fair value hierarchy. The carrying value of short and long-term borrowings approximates their fair value.
56
Stadco Equipment Financing
Stadco entered into a
NOTE 13 - OTHER NONCURRENT LIABILITY
Under an addendum to a contract purchase order, one of our customers agreed to reimburse the Company for the cost of certain new equipment. Payments are received as the Company incurs construction costs. All payments have been received under this contract. In case of a contract breach, at the time of the breach, the customer may claw back the funds based on a prorated ten-year straight-line annual declining balance recovery period. This liability amount is included in the Company’s consolidated balance sheets as a noncurrent liability.
In September 2023, we signed an agreement to purchase new equipment for another customer who agreed to reimburse the Company for the cost of the equipment. We received the first payment in fiscal 2024, with additional payments received during fiscal 2025 and 2026. Advance payments from the customer accrue in the Company’s consolidated balance sheets as a noncurrent liability.
As of March 31, 2026, and March 31, 2025, a total of $
In fiscal year 2023, Stadco entered into an agreement with the Los Angeles Department of Water and Power, or “LADWP”, to settle previously outstanding amounts for water, water service, electric energy and/or electric service in the aggregate amount of $
NOTE 14 – LEASES
Stadco is a party to an amended building and property operating lease and recorded a right of use asset and liability of $
On August 11, 2025, Ranor signed an agreement to lease a copier over a period of
The following table lists our right-of-use assets and liabilities on our consolidated balance sheets on:
| | March 31, 2026 | | March 31, 2025 | ||
Finance lease: |
| | | | | |
Right of use asset – operating lease | | $ | | | $ | |
Right of use asset – finance leases | | | | |
| |
Amortization | | | ( | | | ( |
Right of use asset, net | | $ | | | $ | |
| $ | | | $ | | |
Lease liability – finance leases | | | | | | |
Total lease liability | | $ | | | $ | |
57
Other supplemental information regarding our leases is contained in the following tables:
Components of lease amortization for the year ended: | | March 31, 2026 | | March 31, 2025 | ||
Operating lease amortization | | $ | | | $ | |
Finance lease amortization | | $ | | | $ | |
Finance lease interest | | $ | | | $ | — |
Weighted average lease term and discount rate at: | | March 31, 2026 | | March 31, 2025 |
|
Lease term (years) – operating lease |
| | | ||
Lease term (years) – finance lease | | | | ||
Lease rate – operating lease | | | % | | % |
Lease rate – finance lease |
| | % | | % |
Supplemental cash flow information related to leases for the year ended: | | March 31, 2026 | | March 31, 2025 | ||
Cash used in operating activities | | $ | | | $ | |
Cash used in financing activities | | $ | | | $ | |
Maturities of lease liabilities on March 31, 2026 for the following periods:
April 1, 2026 – March 31, 2027 | | $ | |
April 1, 2027 – March 31, 2028 | |
| |
April 1, 2028 – March 31, 2029 | |
| |
April 1, 2029 – March 31, 2030 | |
| |
April 1, 2030 – September 30, 2030 | |
| |
Total lease payments | | $ | |
Less: imputed interest | |
| |
Total | | $ | |
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
In accordance with the accounting standard for contingencies, we record a liability when management believes that it is both probable that a liability has been incurred, and we can reasonably estimate the amount of the loss. Generally, the loss is recorded for the amount we expect to resolve the liability. We review and adjust any provisions quarterly to reflect the effect of negotiations, settlements, rulings, and advice. There are no recorded provisions for litigation matters as of March 31, 2026 and 2025.
Employment Agreements
We have employment agreements with each of our executive officers. Such agreements provide for minimum salary levels, adjusted annually, and incentive bonuses that are payable if specified company goals are attained. The aggregate commitment at March 31, 2026 for future executive salaries was $
Purchase Commitments
As of March 31, 2026, we had $
58
Retirement Benefits
The Company has
| | March 31, 2026 | | March 31, 2025 | ||
Company contributions | | $ | | | $ | |
NOTE 16 – SEGMENT INFORMATION
The Company has
Our Chief Executive Officer, or CEO, is the Chief Operating Decision Maker, or CODM, and evaluates the performance of our segments based upon, among other things, segment revenue and operating profit. The CODM uses the operating profit metric to evaluate segment results of operations and the financial measure that provides insight into our overall performance and financial position.
Segment operating profit includes executive, sales and marketing compensation, and other administrative and corporate expenses allocated equally to each segment based on a revenue run rate. The following table provides summarized financial information for our segments:
| | March 31, 2026 | | March 31, 2025 | ||||||||||||||
| | Ranor | | Stadco | | Total | | Ranor | | Stadco | | Total | ||||||
Revenue | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Intersegment elimination | |
| ( | |
| ( | |
| ( | |
| — | |
| ( | |
| ( |
Revenue, net | |
| | |
| | |
| | |
| | |
| | |
| |
Cost of revenue | | | | | | | | | | | | | | | | | | |
Selling, general, and administrative (1) | |
| | |
| | |
| | |
| | |
| | |
| |
Profit (loss) from operations | |
| | |
| ( | |
| ( | |
| | |
| ( | |
| ( |
Reconciliation of profit or loss: | | | | | | | | | | | | | | | | | | |
Unallocated items: | | | | | | | | | | | | | | | | | | |
Corporate general costs (2) | |
| | | | | |
| ( | |
| | | | | |
| ( |
Costs related to terminated acquisition | |
| | | | | |
| — | |
| | | | | |
| ( |
Consolidated operating loss | |
| | | | | |
| ( | |
| | | | | |
| ( |
Other expense, net | | | | | | | | | ( | | | | | | | | | ( |
Interest expense | |
| | | | | |
| ( | |
| | | | | |
| ( |
Consolidated loss before income taxes | |
| | |
| | | $ | ( | |
| | |
| | | $ | ( |
Total assets | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Property, plant and equipment, net | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | |
| | |
| | |
| | |
| | |
| | |
| |
Gross capital expenditures (3) | | | | | | — | | | | | | | | | | | | |
| (1) | Corporate overhead costs such as executive and sales compensation, and other corporate facilities and administrative expenses are allocated equally to the segments. |
| (2) | Corporate general costs include executive and director compensation, stock-based compensation expense, and other corporate administrative expenses not allocated to the segments. |
| (3) | Certain expenditures are reimbursed under the programs described in Note 14 – Other noncurrent liability. |
59
NOTE 17 – SUBSEQUENT EVENT
Ranor, Inc. along with certain affiliates of the Company entered into that certain Amended and Restated Loan Agreement with the Bank on August 25, 2021 under which, among other things, the Bank provided a revolving line of credit loan to the Borrowers which currently has a maximum principal amount of $
The Fourteenth Amendment, among other things, (i) extends the maturity date of the Revolver Loan from May 15, 2026 to September 15, 2026, (ii) adds covenants from the Borrowers to: (a) provide by July 31, 2026 (or such later date agreed by the Bank in its sole discretion) a term sheet for a refinancing to repay outstanding obligations under the Amended and Restated Loan Agreement by September 15, 2026; if not provided by July 31, 2026, then the Borrowers shall provide access to Beacon to conduct field examinations of all assets, and appraisals of all collateral, of Borrowers at all locations where assets may be located; and (b) cooperate with and pay for a lender-ordered appraisal of one of the Company’s properties; and (iii) adds a failure-to-perform fee of $
60
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and procedures that are designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and includes controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures.
As of the end of the period covered by this report, an evaluation was carried out, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting described below.
Management’s Responsibility for Internal Controls
The Company’s internal control over financial reporting is designed under the supervision of our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Inherent Limitations Over Internal Controls
Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods is subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management’s Report of Internal Control over Financial Reporting.
Management 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. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2026, based on the 2013 framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework. Based on that assessment, management concluded that, the Company’s internal control over financial reporting was not effective as of March 31, 2026, due to the material weaknesses described below.
61
Material Weaknesses
We identified four material weaknesses in our internal control over financial reporting as of March 31, 2026. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our financial statements for this Annual Report on Form 10-K, management identified the following material weaknesses:
| 1) | Purchase accounting - we did not maintain proper controls, processes and procedures over the initial purchase accounting and the fair value accounting associated with our acquisition of Stadco in the fiscal year ended March 31, 2022 that were adequately designed, documented, and executed to support the accurate and timely reporting of our financial results regarding the initial purchase accounting and the fair value accounting associated with the Stadco acquisition. |
| 2) | Stadco accounting - we did not maintain a sufficient complement of resources and expertise on the Stadco accounting staff necessary to consistently perform management review controls over financial information and complete account reconciliations on a timely basis, to ensure all transactions are accurately captured and recorded prior to closing the books. The demand on our accounting resources is significant due to the manual nature of controls necessary to maintain effective control over Stadco’s legacy system. As a result of this material weakness, we made several post-closing adjustments for percentage-of-completion (POC) revenue projects. The adjustment corrected inputs for project revenues and costs in progress at Stadco, as the initial and correcting journal entries were not reconciled and posted in a timely manner during the year end reporting cycle. Because of the foregoing reasons, extra time was required to complete certain items with respect to the financial statement preparation, closing and review process for the year ended March 31, 2025. |
| 3) | Accounting for impairment of long-lived assets - in the fourth quarter of fiscal 2025 we engaged a third-party specialist to perform an impairment test on the recoverability of long-lived assets triggered by a history of operating losses at Stadco. Because of our inability to close the Stadco books in a timely manner, extra time was required to complete certain tasks with respect to the impairment test, and we were not able to execute a timely management review of the valuation report. Because of this material weakness, we made a late journal entry to our general ledger which was subsequently reversed while preparing the consolidated financial statements and footnotes included in the Annual Report on Form 10-K. The demand on corporate accounting resources is significant due to the manual nature of controls necessary to maintain effective control over Stadco’s legacy accounting system and intensifies during the quarterly closings. |
| 4) | Segregation of duties - Duties are logically divided among people and processes to mitigate risks and meet financial reporting objectives. Inadequate segregation of duties could result in misappropriation of assets or intentional misstatements in the financial statements. Management performs an annual assessment including planning, scoping, documentation, and testing of controls. As a result of the assessment, we discovered that in fiscal 2025, we operated for a brief period when our interim CFO/Controller assumed roles as a reviewer and journal entry preparer with access to the general ledger and other financial reporting programs and spreadsheets. These conditions were temporary and existed during a brief period as the Company transitioned to our new CFO on March 31, 2025. |
Notwithstanding the material weaknesses, management believes the consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, the Company’s financial condition, results of operations and cash flows as of and for the fiscal years presented in accordance with U.S. GAAP.
62
Remediation of Material Weaknesses
For the fiscal year ended March 31, 2026, we reviewed our entity level controls, staffing requirements and the cost/benefit for remediating our material weaknesses.
In fiscal 2024, our management, with the oversight of our audit committee, began to implement a plan to take measures in order to remediate the underlying causes of the material weaknesses through the development and implementation of a thorough review of our procedures, policies, processes, and review controls to gain additional assurance regarding the remediation our accounting for acquisitions, income taxes, closing cycle time at Stadco, impairment of long-lived assets, and segregation of duties. This remediation process has not been completed, and the following is an update through the end of fiscal 2026:
| 1) | Purchase accounting - The Company enhanced its working framework with a memorandum that depicts a clear, explicit roadmap for the purchase accounting guidance at every step. We will follow that roadmap and will implement new controls as required. We engaged a third-party specialist in July 2023 with the requisite knowledge to perform all required valuations and accounting for business combinations. That specialist worked with the Company on all the pre-acquisition activities, or due diligence, in connection with the Votaw acquisition. The specialist was hired primarily to ensure that certain accounting issues that arose in the Stadco acquisition would not re-occur with the purchase accounting for the Votaw acquisition. Ultimately, the Votaw acquisition process terminated, but the Company enhanced its policy, procedures and process level controls on how it gathers and analyzes relevant facts and circumstances in connection with all complex business transactions. We will document the required evidence that needs to be maintained (e.g., checklists, signatures) for each existing and new internal control and communicate the requirements to key stakeholders. We will review and test our controls and procedures again with the next acquisition target before making a final validation on operating effectiveness. |
| 2) | Stadco accounting - For the fiscal year ended March 31, 2026, we reviewed our entity level controls, staffing requirements and the cost/benefit for upgrading our legacy systems and accounting staff at Stadco. As a result of this review, we continue to transition the accounting function to the CFO office in Massachusetts, where expert and experienced personnel are in-place to execute a plan to a) improve the effectiveness and efficiency of the accounting operation, ensuring a timely closing cycle, b) improve the reliability of financial reporting, and c) ensure continued compliance with generally accepted accounting principles and applicable laws and regulations. We implemented these measures during fiscal 2024, 2025 and 2026, and we will monitor progress during fiscal 2027 as we facilitate remediation of the material weakness. |
| 3) | Accounting for impairment of long-lived assets - We will continue to engage a third-party specialist with the requisite knowledge to perform all required testing in connection with the impairment of long-lived assets. This specialist worked with the Company on acquisition activities in connection with the Stadco purchase. We identified the late journal entry as a control gap, i.e., the controls design was effective but did not operate as designed. Management will develop and implement a formal policy with related procedures to supplement existing controls to ensure a timely evaluation of triggering events and changes in circumstances that may indicate an impairment of long-lived assets. We will review and test the process again during the next impairment testing date before making a final validation on operating effectiveness. |
| 4) | Segregation of duties - This conflict has been resolved with the hiring of a new CFO on March 31, 2025, as duties are properly segregated under the CFO and controller’s office. We will continue to assess scoping, documentation, and testing of controls under the financial reporting function during the next fiscal year before making a final validation on operating effectiveness. |
63
Management believes that the above actions continue the process of remediation for the material weakness as disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. The material weaknesses will not be considered remediated, however, until the applicable controls operate for a sufficient period and management has concluded, through testing, that these controls are operating effectively. We can provide no assurance as to when the remediation of these material weaknesses will be completed to provide for an effective control environment.
We have identified and will continue to strengthen our internal control over financial reporting. We are committed to continually improving our internal control process and will diligently review our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may decide that additional measures are necessary to address control deficiencies.
Changes in Internal Control over Financial Reporting
Except for our remediation efforts described above, there have been no changes in our internal control over financial reporting during the fiscal year ended March 31, 2026 that have materially affected or are reasonably likely to affect our internal control over financial reporting.
Item 9B. Other Information.
During the fiscal quarter ended March 31, 2026, none of our directors or officers
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.
Not Applicable.
64
PART III
| a) | Directors of the Registrant. |
Information about our board of directors is provided below. Messrs. Renuart, Levy, Straus and Schenker currently serve as non-employee directors on our board. There are no family relationships between or among any director or executive officer of the Company.
Name | | Age | | Position |
Victor E. Renuart Jr.(1)(3) | | 75 | | Chair of the Board |
Robert D. Straus(2)(3) | | 55 | | Vice-Chair of the Board |
Andrew A. Levy(1)(2) | | 79 | | Director |
Walter M. Schenker(1)(3) | | 79 | | Director |
Alexander Shen | | 64 | | Director; Chief Executive Officer |
(l) | Member of the Audit Committee. |
(2) | Member of the Compensation Committee. |
(3) | Member of the Nominating and Corporate Governance Committee. |
Victor Eugene Renuart Jr., Retired General, U.S. Air Force. Since November 2011, General Renuart has been the president and founder of The Renuart Group, LLC, a private consulting and project management firm focused on defense, homeland security, efficient energy use, and public-private partnership projects for domestic and international clients. Since January 2014, General Renuart has served on the board of directors and as a member of the finance committee of Griffon Corporation (GFF), a New York Stock Exchange listed company that engages in a wide range of industries including, consumer and professional products, home and building products, defense electronics and specialty plastic films. From August 2010 to January 2012, he served as the senior military advisor to the chief executive officer and vice president-national security of BAE Systems, Inc., a multinational defense, security, and aerospace company. General Renuart previously served as the commander of North American Aerospace Defense Command (NORAD) and United States Northern Command (NORTHCOM) from March 2007 to May 2010. During General Renuart’s tenure in the U.S. Air Force, he also served as a senior military assistant to the Secretary of Defense for Secretaries Donald Rumsfeld and Robert Gates; Director of Strategic Plans and Policy, The Joint Staff; Vice Commander, Pacific Air Forces; and Director of Operations, United States Central Command. In addition, General Renuart currently serves on the board of directors of Kymeta Corp., a private satellite systems manufacturer, Precision Aerospace Holdings, a private aerospace machining corporation, and previously served on the boards of various other private companies in the defense industry. General Renuart received a Bachelor of Science in Production and Industrial Management from Indiana University – Kelley School of Business as well as a Master of Arts in Psychology from Troy University. He also participated in several Air Force fellowship programs including at The US Army War College and The Johns Hopkins University.
General Renuart’s proven military, governmental and corporate leadership record, his extensive experience in multi-national strategic and operational planning, fiscal oversight of large organizations with annual multi-billion-dollar budgets as well as his public company and private company board of directors experience provide him with unique skills, insights and qualifications to serve as a member of the Company’s Board of Directors.
Robert D. Straus currently serves as Vice Chair of the Board, Chair of the Nominating & Governance Committee and a member of the Compensation Committee. Mr. Straus is an institutional portfolio manager with 25 years of proven experience investing in and serving as an advisor to C-suite executives or public and private companies. Since August 2025, Mr. Straus has served as the General Partner and Investment Manager at Aquidneck Advisors LLC, an investment firm that leverages extensive board and constructive activism experience to identify and trigger latent catalysts in undervalued, publicly traded companies. Since March 31, 2025, Mr. Straus has served as a consultant-special projects at Wynnefield Capital, Inc. (“WCI”), an investment firm specializing in private and small-cap publicly-traded companies. From April 2015 to March 2025, Mr. Straus served as a portfolio manager at WCI. Since June 2017, Mr. Straus has served on the board of directors of Nature’s Sunshine (NATR), a NASDAQ CM listed company manufacturing and distributing nutritional supplements, where he serves as the Chair of the Compensation Committee and a member of the Audit Committee. From January 2018 to October 2022, Mr. Straus served on the board of directors of S&W Seed Company, a NASDAQ Global Market listed company during that period, where he served as member of the board’s audit committee and M&A strategy committee. Mr. Straus continues to serve from time to time on the boards of various other private and non-profit companies. Mr. Straus received a Bachelor of Science in Business Administration from the University of Hartford - Barney School of Business and a Master of Business Administration from Bentley University - McCallum Graduate School of Business.
65
Mr. Straus’ extensive investment, financial, capital allocation and strategic initiative analysis expertise, as well as his significant corporate governance and executive compensation experience serving as a director and board committee member of publicly traded companies provide him with unique skills, insights and qualifications to serve as a member of the Company’s Board of Directors.
Andrew A. Levy has been a member of our board of directors since March 2009. He was a co-founder of Techprecision Corp in 2006. Mr. Levy practiced tax and corporate law with two large firms in New York City from 1972 to 1978. Since 1978 Mr. Levy has served as President of Redstone Capital Corporation, a boutique investment banking firm. From 2004 Mr. Levy was Chairman of Universal Aerospace Corp. until its sale to private equity in 2016. Mr. Levy was Chaiman of Fraser Volpe Corporation, a defense electro-optical firm, from 2003 to its sale in 2017. Mr. Levy holds a B.S. in Engineering, summa cum laude, from Yale University and a J.D., cum laude, from Harvard Law School.
Mr. Levy combines an engineering and legal background that enables him to understand the operational aspects of our business and an investment banking background that qualifies him to assess our growth strategies.
Walter M. Schenker has been a member of our board of directors since December 2016. Since June 2010, Mr. Schenker has served as General Partner and Portfolio Manager at MAZ Capital Advisors, an investment partnership, where his responsibilities include, among things, managing the firm’s portfolio of investments. From 1999 to 2010, Mr. Schenker was a Principal at Titan Capital Management, LLC, a registered investment adviser and hedge fund. On April 4, 2019, Mr. Schenker became a director of Andina Acquisition Corporation III, a Nasdaq-listed blank check company. Mr. Schenker previously served on the board of directors and audit committee of Sevcon, Inc., a Nasdaq-listed global supplier of control and power solutions for zero-emission, electric and hybrid vehicles, from 2013 until that company’s acquisition in September 2017. Mr. Schenker holds a B.S. from Cornell University and an M.B.A. in Finance from Columbia University.
Mr. Schenker’s previous experience serving on the board of directors of a publicly traded company and his vast experience investing in both public and private companies enables him to provide our board of directors with insight into how to best manage the Company and execute our growth strategy.
Alexander Shen was appointed Chief Executive Officer of TechPrecision on November 14, 2014 and became a director on our board of directors on September 15, 2022. Since June 2014, Mr. Shen has served as President of our Ranor subsidiary, and he also served as president of our WCMC subsidiary. Mr. Shen has experience in a broad range of industries including metal fabrication, automotive, contract manufacturing, safety and security, and industrial distribution. Prior to joining us, Mr. Shen served in 2013 as President of SIB Development and Consulting, a firm specializing in fixed, monthly cost reduction. Mr. Shen served as President of Tydenbrooks Security Products Group, a security products company, from July 2011 to December 2012. Mr. Shen served as President and Chief Executive Officer of Burgon Tool Steel Company between January 2009 and June 2011 and served as Chief Executive Officer of Ryerson Mexico & Vice President — International for Ryerson, Inc., a multi-national distributor and processor of metals, from 2007 to 2009. Mr. Shen was Division General Manager & Chief Operating Officer at Sumitomo Electric Group from 1998 to 2007, focused on automotive electrical and electronic products. Prior to 1998, he had a 10-year career at the Automotive Division of Alcoa Inc. with roles of increasing responsibility. Mr. Shen began his career with General Motors, moving to Chrysler, before joining Alcoa Inc. His career includes multiple international management roles in Japan, China, Mexico, and Europe, and he is fluent in the Chinese and Japanese languages and cultures. Mr. Shen holds a B.S. in Engineering from Michigan State University.
Mr. Shen’s long experience in manufacturing and his current role as Chief Executive Officer of the Company led to the board’s decision that he should serve on the board of directors.
b) | Executive Officers of the Registrant. |
Information with respect to executive officers of the Company is set forth under “Item 4A Executive Officers of the Registrant” in this Annual Report on Form 10-K.
c) | Identification of the Audit Committee. |
The members of the Audit Committee are Mr. Schenker (Chair), Mr. Renuart and Mr. Levy. Our board of directors has determined that Messrs. Renuart, Levy and Schenker each satisfy the independence standards for the Audit Committee established by the applicable rules and regulations of the SEC and Nasdaq. The primary purpose of the Audit Committee is to oversee the quality and integrity of our accounting and financial reporting processes and the audit of our financial statements. The Audit Committee is
66
responsible for selecting, compensating, overseeing and terminating our independent registered public accounting firm. The Audit Committee charter is posted and can be viewed in the “Corporate Governance” section of our website at www.techprecision.com.
d) | Audit Committee Financial Expert. |
Our board of directors has determined that Mr. Schenker, who is the Chair of the Audit Committee, is an “audit committee financial expert” as that term is defined under the applicable rules and regulations of the SEC.
e) | Shareholder Nomination Process. |
There have been no material changes to the procedures by which stockholders may recommend nominees to our board of directors.
f) | Code of Ethics for Chief Executive Officer and Senior Financial Officers. |
The Company has adopted a Code of Ethics for the principal executive officer, principal financial officer and principal accounting officer of the Company, which may be found on the Company’s website at www.techprecision.com. Any amendments to the Code of Ethics or any grant of a waiver from the provisions of the Code of Ethics requiring disclosure under applicable SEC rules will be disclosed on the Company’s website.
Insider Trading Policy
Our board of directors has adopted an Insider Trading Policy (the “Policy”) governing the purchase, sale and/or other dispositions of the Company’s securities by its directors, officers and employees, and the Company itself, that is reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable listing standards. The Policy applies to directors, officers and employees of the Company and its subsidiaries. Among other things, the Policy prohibits trading in the Company’s securities if a director, officer or employee is aware of material non-public information (except for transactions pursuant to a written plan that has been adopted in conformity with Rule 10b5-1 under the Exchange Act and pre-cleared with the Company). These individuals are also prohibited from disclosing material non-public information about the Company to any other persons. The Policy also sets forth information with respect to restricted trading periods, pre-clearance procedures and Section 16 compliance. It also contains prohibitions on specific types of trading in the Company’s securities, including short sales, publicly traded options and hedging transactions, that are designed to mitigate or avoid risks associated with long-term ownership of the Company’s securities, as well as holding shares in margin accounts or pledging shares. The Company’s Policy is filed as an exhibit to this Annual Report on Form 10-K for the year ended March 31, 2026.
Item 11. Executive Compensation
Summary Compensation Table
The Company’s executive officers during the course of the 2026 fiscal year, based on relevant SEC rules, are set forth below as information for the fiscal years indicated relating to the compensation of (i) Alexander Shen, our chief executive officer, or CEO, and our principal executive officer, or PEO, who also serves as the President of Ranor, Inc., a wholly owned subsidiary of the Company, and (ii) Phillip Podgorski as our Chief Financial Officer, or CFO, effective as of April 8, 2025 to the present, and (iii) Barbara Lilley, who served as our Interim Chief Financial Officer from March 7, 2025 to April 8, 2025. Together, such individuals are referred to as our Named Executive Officers.
| | Fiscal | | | | | | | | Option | | Stock | | All Other | | | | |||
Name and Position | | Year | | Salary | | Bonus | | Awards(1) | | Awards | | Compensation | | Totals | ||||||
Alexander Shen |
| 2026 | | $ | 352,693 | | $ | 500 |
| | — |
| | — | | $ | 3,854 | | $ | 357,047 |
Chief Executive Officer |
| 2025 | | $ | 334,423 | | $ | 500 |
| | — |
| | — | | $ | 2,844 | | $ | 337,767 |
Phillip Podgorski(2) |
| 2026 | | $ | 266,020 | | $ | 110,500 |
| | — | | $ | 60,000 | | $ | — | | $ | 436,520 |
Chief Financial Officer |
| 2025 | | $ | — | | $ | — |
| | — | | | — | | $ | — | | $ | — |
Barbara Lilley |
| 2026 | | $ | 200,770 | | $ | — |
| | — | |
| — | | $ | — | | $ | 200,770 |
Interim CFO(3) |
| 2025 | | $ | 120,000 | | $ | 500 |
| | — | | | — | | $ | 395 | | $ | 120,895 |
(1) | There were no option awards granted during fiscal 2026 and 2025. |
(2) | Mr. Podgorski was appointed Chief Financial Officer of the Company effective as of April 8, 2025. |
67
(3) | On March 7, 2025, the Company appointed Ms. Lilley, the Controller of Ranor, Inc., one of the Company’s operating subsidiaries, to serve as Interim CFO, principal financial officer and principal accounting officer, until April 8, 2025. |
Outstanding Equity Awards at Fiscal Year-End Table
| | Option Awards | |||||||
| | Number of | | Number of | | | | | |
| | Securities | | Securities | | | | | |
| | Underlying | | Underlying | | | | | |
| | Unexercised | | Unexercised | | Option | | Option | |
| | Options (#) | | Options (#) | | Exercise | | Expiration | |
Name | | Exercisable | | Unexercisable | | Price | | Date | |
Alexander Shen(1) |
| 250,000 |
| — | | $ | 2.00 | | December 26, 2026 |
| (1) | Two-thirds of the options granted to Mr. Shen on December 27, 2016 were vested on the grant date. Subject to Mr. Shen’s continuous employment with the Company through the vesting date, the remaining 83,334 options vested on the first anniversary of the grant date. |
Employment Agreements
As of March 31, 2026, we had employment agreements with each of our Named Executive Officers.
Alexander Shen Employment Agreement
We executed an employment agreement with Mr. Shen on November 17, 2014 (the “CEO Employment Agreement”) to engage Mr. Shen for the position of Chief Executive Officer. The terms of the CEO Employment Agreement provide that Mr. Shen will report directly to our board of directors and others at the direction of the board at such time and in such detail as the board shall reasonably require and his duties and responsibilities shall consist of such powers, duties and responsibilities as are customary for the office of Chief Executive Officer of a company similar in size and stature to the Company.
Pursuant to the CEO Employment Agreement, Mr. Shen receives an annual base salary of $350,000, increased by the board of directors from $275,000, which may be increased from time to time by the board of directors, and was awarded a one-time grant of options to purchase 250,000 shares of our Common Stock, which vested in three equal amounts on the date of grant and each of the subsequent two anniversaries of the date of grant. The exercise price of the options is equal to the closing market price as of the grant date. Mr. Shen is also eligible for an annual cash performance bonus based upon our financial performance as determined by our board of directors and targeted at up to 75% of Mr. Shen’s annual base salary, which target was increased by the board of directors, from 60%. Mr. Shen is entitled to participate fully in our employee benefit plans and programs and is entitled to four weeks of vacation per year. Mr. Shen will also be reimbursed for reasonable and necessary out-of-pocket expenses incurred by him in the performance of his duties and responsibilities as Chief Executive Officer. Under the terms of the CEO Employment Agreement, and in connection with his relocation to Westminster, Massachusetts, Mr. Shen was also entitled to assistance with temporary living arrangements and a relocation allowance of $35,000 at the time of his relocation.
Pursuant to the terms of the CEO Employment Agreement and subject to Mr. Shen’s execution of a release of claims in favor of the Company, in the event we terminate Mr. Shen’s employment without “cause” (as defined below) or Mr. Shen resigns his employment for “good reason” (as defined below) at any time during the six-month period following a change in control, he will be entitled to receive continuation of his base salary for twelve months following termination of his employment, payable under the Company’s normal payroll practices. We may terminate the CEO Employment Agreement for cause upon seven days written notice, during which period Mr. Shen may contest his termination before our board of directors.
In general, “cause” is defined as: (i) Mr. Shen’s refusal to perform material duties and responsibilities or follow legal and reasonable directive of the board of directors, (ii) the willful misappropriation of Company funds or property, (iii) any willful or intentional act which he should have reasonably anticipated would reasonably be expected to materially damage the Company’s reputation, business and/or relationships, (iv) excessive use of alcohol or use of illegal drugs, or (v) any material breach of the CEO Employment Agreement. Mr. Shen is also subject to a covenant not to compete with us for a period of 12 months following termination of the CEO Employment Agreement. In general, “good reason” is defined as: (A) a material adverse change in the duties, responsibilities or effective authority associated with his position, or (B) a material reduction by the Company of Mr. Shen’s base salary, each after Mr. Shen has given the Company written notice and the Company has failed to cure such act within 30 days following receipt of such notice.
68
In addition to the compensation and severance arrangements described above, the CEO Employment Agreement contains customary provisions (i) prohibiting Mr. Shen from divulging to third parties or using confidential information or trade secrets of the Company; (ii) confirming that all intellectual work products generated by Mr. Shen during the term of his employment with the Company are the sole property of the Company; and (iii) prohibiting Mr. Shen from competing against the Company, including by soliciting the Company’s employees or its current or prospective clients, until the one year anniversary of the termination of his employment.
Phillip Podgorski Employment Agreement
On March 31, 2025, the Company executed an employment agreement with Mr. Podgorski (the “CFO Employment Agreement”) to serve as the Chief Financial Officer of the Company.
Pursuant to the CFO Employment Agreement, Mr. Podgorski receives an annual base salary of $265,000, which shall be increased an additional $10,000 on each of March 31, 2026 and March 31, 2027 and thereafter may be increased by order of the CEO, the Compensation Committee of the Board or the full Board; and received: (i) a relocation bonus of $50,000, (ii) a first year bonus of $60,000, and (iii) a one-time grant of 78,261 shares of the Company’s common stock pursuant to the TechPrecision Corporation 2016 Equity Incentive Plan, as amended (the 2016 Plan), which shall vest in equal amounts annually for three years starting on March 31, 2026. Under the Employment Agreement, Mr. Podgorski also will be eligible to participate in Company benefits provided to other senior executives as well as benefits available to Company employees generally.
In addition to the compensation arrangements described above, the Employment Agreement contains customary provisions (i) prohibiting Mr. Podgorski from using or divulging to third parties confidential information or trade secrets of the Company; (ii) confirming that all intellectual work products generated by Mr. Podgorski during the term of his employment with the Company are the sole property of the Company; and (iii) prohibiting Mr. Podgorski from competing against the Company, including by soliciting the Company’s employees or its current or prospective clients, until the one-year anniversary of the termination of his employment. The Employment Agreement has an indefinite term and each of Mr. Podgorski and the Company may terminate the Employment Agreement upon the giving of written notice.
2016 Plan
The purposes of the 2016 Plan are to: (a) enable the Company and its affiliated companies to recruit and retain highly qualified employees, directors and consultants; (b) provide those employees, directors and consultants with an incentive for productivity; and (c) provide those employees, directors and consultants with an opportunity to share in the growth and value of the Company.
Employees, directors, consultants and other individuals who provide services to the Company or its affiliates are eligible to be granted awards under the 2016 Plan; provided, however, that only employees of the Company or any parent company or subsidiary of the Company are eligible to be granted incentive stock options.
As of March 31, 2026, 152 employees and four non-employee directors are eligible to participate in the 2016 Plan, and there were outstanding options granted under the 2016 Plan to purchase 300,000 shares of our Common Stock with a weighted-average exercise price of $2.11. This amount included options granted to our chief executive officer to purchase 250,000 shares of our Common Stock. As of March 31, 2026, the closing price of our Common Stock was $3.01 per share.
Additional Retirement Benefits
During fiscal 2026, our chief executive officer and chief financial officer each participated in our qualified 401(k) plan that provides participants the opportunity to defer taxation on a portion of their income, up to limits set forth in the Internal Revenue Code and receive a matching Company contribution.
Compensation Policies and Practices and Risk Management
One of the responsibilities of our board of directors, in its role in setting executive compensation and overseeing our various compensation programs, is to ensure that our compensation programs are structured so as to discourage inappropriate risk-taking. We believe that our existing compensation practices and policies for all employees, including executive officers, mitigate against this risk by, among other things, providing a meaningful portion of total compensation in the form of equity incentives. These equity incentives are awarded with either staggered or cliff vesting over several years, so as to promote long-term rather than short-term financial performance and to encourage employees to focus on sustained stock price appreciation. In addition, our existing compensation policies attempt to discourage employees from taking excessive risks to achieve individual performance objectives such as annual cash incentive
69
compensation and long-term incentive compensation which are based upon balanced company-wide, business unit and individual performance and base salaries structured to be consistent with an employee’s responsibilities and general market practices. The board of directors, as a whole, is responsible for monitoring our existing compensation practices and policies and investigating applicable enhancements to align our existing practices and policies with avoidance or elimination of risk and the enhancement of long-term stockholder value.
Board of Directors Compensation
Fees and Equity Awards for Non-Employee Directors
The annual fee structure for non-employee directors is as follows:
Fee Category | | Fees | |
Non-employee directors | | $ | 24,000 |
Chair - Audit Committee | | $ | 7,500 |
Chairman of the Board | | $ | 20,000 |
Chair - Compensation or the Nominating and Governance Committee | | $ | 5,000 |
In addition, our board of directors receives an annual grant of $45,000 of restricted stock under the 2016 TechPrecision Equity Incentive Plan (the “2016 Plan”), which shall vest on the one-year anniversary of the annual stockholders’ meeting immediately prior to such grant, subjected to continued service.
Director Compensation Table
The following table sets forth compensation paid to each non-employee director who served during the fiscal year ended March 31, 2026.
| | Fees | | Stock | | | | ||
Name | | Earned(1) | | Awards(2)(3) | | Totals | |||
Andrew Levy | | $ | 14,500 |
| $ | 117,426 | | $ | 131,926 |
Walter M. Schenker | | $ | 15,750 |
| $ | 118,676 | | $ | 134,426 |
Eugene Renuart, Jr. | | $ | 22,000 |
| $ | 72,626 | | $ | 94,626 |
Robert Straus | | $ | 14,500 |
| $ | 65,126 | | $ | 79,626 |
(1) | The members of the board of directors received one-half of the cash fees they were entitled to for fiscal 2026 in cash. The remaining one-half of all fees for fiscal 2026. service were paid in the form of Common Stock and, therefore, are reported in the Stock Awards column. |
(2) | Represents the aggregate grant date fair value of Stock Awards computed in accordance with ASC Topic 718. Key assumptions in calculating these amounts are outlined in Note 7 to our Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026. The Stock Awards consist of the following, which in the case of clauses (ii) and (iii) were granted pursuant to the 2016 Plan: (i) for Mr. Levy and Mr. Schenker only, an October 2, 2025 issuance of Common Stock with a fair value of $52,300 as compensation for services rendered in fiscal 2025; (ii) for each non-employee director, a March 6, 2026 grant of $45,000 of restricted stock as compensation for services rendered in fiscal 2026 that will vest October 28, 2026 (the one year anniversary of the annual meeting), subject to continued service until such date; and (iii) a March 6, 2026 issuance of Common Stock equal to one-half of the cash fees each director was entitled to for fiscal 2026 service (Mr. Levy and Mr. Straus - $14,000 each; Mr. Schenker - $15,750; and Mr. Renuart, Jr. - $22,000). |
(3) | The aggregate number of stock awards outstanding for each director as of March 31, 2026 is as follows: |
Name | | Shares Subject to Stock Awards Outstanding |
Andrew Levy |
| 16,168 |
Walter M. Schenker |
| 16,507 |
Eugene Renuart, Jr. |
| 18,206 |
Robert Straus |
| 16,168 |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
There are no individuals or entities known by TechPrecision (through their Section 13 filings), excluding directors and Named Executive Officers, to own more than 5% of the outstanding Common Stock as of June 16, 2026.
70
The following table provides information as to shares of our Common Stock beneficially owned, as of June 16, 2026, by:
| ● | each of our current directors; |
| ● | each Named Executive Officer; and |
| ● | all current directors and executive officers as a group. |
Except as otherwise indicated, each person has the sole power to vote and dispose of all shares of our Common Stock listed opposite his name. Each person is deemed to own beneficially shares of Common Stock that may be acquired upon exercise of stock options if they are vested and exercisable within 60 days of the measurement date, June 16, 2026. As of June 16, 2026, there were 10,078,381 shares of our Common Stock outstanding.
Except as otherwise indicated, the address of each person listed below is c/o TechPrecision Corp., 1 Bella Drive, Westminster, MA 01473.
| | Shares of | | | |
Name | | common stock | | Percentage |
|
Victor Renuart |
| * |
| * | |
Andrew A. Levy(1) |
| 406,986 |
| 4.04 | % |
Robert Straus |
| 229,889 |
| 2.28 | % |
Walter M. Schenker(2) |
| 395,629 |
| 3.93 | % |
Alexander Shen(3) |
| 479,793 |
| 4.76 | % |
Phillip Podgorski |
| * |
| * | |
All executive officers and directors as a group (six individuals)(4) |
| 1,544,223 |
| 15.32 | % |
* | Percentage of shares beneficially owned does not exceed one percent of the class. |
(1) | Includes 25,000 shares of common stock that may be acquired pursuant to stock options that may be exercised within 60 days of June 16, 2026. |
(2) | According to a Schedule 13D filed by Maz Partners LP (“MAZ Partners”), MAZ Capital Advisers, LLC (“MAZ Capital”) and Mr. Schenker on February 13, 2018, MAZ Partners, MAZ Capital and Mr. Schenker share voting and dispositive power over 300,902 shares of the Company’s common stock, which are included in this amount. Mr. Schenker is the sole managing member of MAZ Capital, which is the sole general partner of MAZ Partners. This amount also includes (a) 25,000 shares of common stock that may be acquired pursuant to stock options that may be exercised within 60 days of June 16, 2026, and (b) 14,500 shares of common stock held in an IRA account of Mr. Schenker over which Mr. Schenker has sole voting and sole dispositive power. |
(3) | Includes 250,000 shares of common stock that may be acquired pursuant to stock options that may be exercised within 60 days of June 16, 2026. |
(4) | Includes 300,000 shares of Common Stock issuable upon the exercise of stock options granted to executive officers and/or directors that may be exercised within 60 days of June 16, 2026. |
Changes in Control
To our knowledge, there are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.
71
Equity Compensation Plan Information
The following table summarizes our equity compensation plan information as of March 31, 2026.
| | | | | | | Number of Securities |
| | | | | | | Remaining Available |
| | | | | | | for Future Issuance |
| | Number of Securities | | | | | Under Equity |
| | to Be Issued upon | | Weighted-Average | | Compensation Plans | |
| | Exercise of | | Exercise Price of | | (Excluding | |
| | Outstanding Options, | | Outstanding Options, | | Securities Reflected in | |
| | Warrants and Rights | | Warrants and Rights | | Column (a)) | |
Plan Category | | (a) | | (b) | | (c) | |
Equity compensation plans approved by security holders |
| 300,000 |
| $ | 2.11 |
| 60,635 |
Item 13. Certain Relationships and Related Transactions, and Director Independence
Related Party Transaction Policy
All transactions with related parties that may present actual, potential or perceived conflicts of interest are subject to approval by the Audit Committee, under the terms of the Audit Committee’s charter. As part of its review of related party transactions, the Audit Committee generally seeks to obtain evidence regarding whether the terms of the related party transaction are market-based. The Audit Committee relies on such information, in addition to other transaction-specific factors, in its review and approval of related party transactions.
Related Person Transactions
We are not aware of any transactions, since April 1, 2025, or any proposed transactions, in which the Company was a party, where the amount involved exceeded $120 and in which a director, executive officer, holder of more than 5% of our Common Stock, any member of the immediate family of any of the foregoing persons or any other “related person” (as defined under the rules of the SEC), had or will have a direct or indirect material interest.
Director Independence
We evaluate the independence of our directors in accordance with the listing standards of the Nasdaq Stock Market, LLC (“Nasdaq”), the national securities exchange on which our common stock trades, and the regulations promulgated by the Securities and Exchange Commission (the “SEC’). Nasdaq’s rules require that a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Under Nasdaq rules, we are required to have a board of directors comprised of a majority of independent directors. Accordingly, after review of all relevant transactions and relationships between each director, or any of his family members, and us, our senior management and our independent registered public accounting firm, our board of directors has determined that the following directors, which comprise a majority of the members of our board of directors, are independent directors within the meaning of the Nasdaq listing standards: Andrew A. Levy, Victor Renuart, Robert Straus, and Walter M. Schenker.
72
Item 14. Principal Accountant Fees and Services
The following is a summary of fees for professional services rendered by our independent registered public accounting firm for the years ended:
| | March 31, 2026 | | March 31, 2025 | ||
Audit Fees | | $ | 480,838 | | $ | 569,666 |
Audit related fees | |
| — | |
| — |
Tax fees | |
| — | |
| — |
All other fees | | | — | | | — |
Total | | $ | 480,838 | | $ | 569,666 |
Audit fees. Audit fees represent fees for professional services performed by our independent registered public accounting firm for the audit of our annual financial statements and the review of our quarterly financial statements, as well as services that are normally provided in connection with statutory and regulatory filings or engagements.
Audit-related fees. Audit-related fees represent fees for assurance and related services performed by our independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are traditionally performed by the independent registered public accounting firm. These include services related to consultation with respect to special procedures required to meet certain regulatory requirements.
Tax fees. There were no fees paid to our independent registered public accounting firm for tax compliance, tax advice and tax planning services for the fiscal years ended March 31, 2026 and 2025.
All other fees. There were no other fees paid to our independent registered public accounting firm for services not captured in any of the above three categories for the fiscal years ended March 31, 2026 and 2025.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. The independent registered public accounting firm and our management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. All services provided by the independent registered public accounting firm in fiscal 2026 and fiscal 2025 were pre-approved by the Audit Committee.
73
Part IV
Item 15. Exhibits and Financial Statement Schedules.
The following documents are filed as part of this report:
| (1) | Financial Statements, included in Part II, “Item 8. Financial Statements and Supplementary Data”: |
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of March 31, 2026 and 2025
Consolidated Statements of Operations for the years ended March 31, 2026 and 2025
Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2026 and 2025
Consolidated Statements of Cash Flows for the years ended March 31, 2026 and 2025
Notes to Consolidated Financial Statements
| (2) | Financial Statement Schedules: |
Financial statement schedules have been omitted because either they are not applicable or the required information is included in the financial statements or the notes thereto.
| (3) | List of Exhibits: |
The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC.
Exhibit Index
Exhibit | | Description | | Incorporated | | File No. | | Date Filed | | Exhibit | | Filed |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |
2.1 | | | 8-K | | 000-51378 | | October 20, 2020 | | 2.1 | | | |
2.2 | | | 8-K | | 000-51378 | | February 3, 2021 | | 10.2 | | | |
2.3 | | | 8-K | | 000-51378 | | July 26, 2021 | | 2.1 | | | |
2.4* | | | 8-K | | 001-41698 | | November 29, 2023 | | 2.1 | | | |
3.1 | | | SB-2 | | 333-133509 | | August 28, 2006 | | 3.1 | | | |
3.2 | | Certificate of Amendment to the Certificate of Incorporation of TechPrecision Corporation | | 8-K | | 000-51378 | | February 23, 2023 | | 3.1 | | |
3.3 | | | 8-K | | 000-41698 | | August 14, 2025 | | 3.1 | | | |
3.4 | | Certificate of Designation for Series A Convertible Preferred Stock of the Registrant | | 8-K | | 000-51378 | | March 3, 2006 | | 3.1 | | |
3.5 | | | 10-Q | | 000-51378 | | November 12, 2009 | | 3.5 | | | |
4.1 | | | 10-K | | 001-41698 | | September 13, 2024 | | 4.1 | | |
74
Exhibit | | Description | | Incorporated | | File No. | | Date Filed | | Exhibit | | Filed |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |
4.2 | | | 8-K | | 001-41698 | | July 10, 2024 | | 4.1 | | | |
4.3 | | | 8-K | | 001-41698 | | July 10, 2024 | | 4.2 | | | |
10.1† | | | 8-K | | 000-51378 | | December 28, 2016 | | 10.3 | | | |
10.2† | | | 10-Q | | 000-51378 | | February 14, 2017 | | 10.4 | | | |
10.3† | | First Amendment to TechPrecision Corporation 2016 Equity Incentive Plan | | 8-K | | 000-51378 | | February 15, 2022 | | 10.1 | | |
10.4† | | Second Amendment to TechPrecision Corporation 2016 Equity Incentive Plan | | 8-K | | 001-41698 | | August 14, 2025 | | 10.1 | | |
10.5† | | 2006 Long-term Incentive Plan, as restated effective November 22, 2010 | | 10-Q | | 000-51378 | | February 14, 2011 | | 10.2 | | |
10.6† | | | 8-K | | 000-51378 | | June 17, 2013 | | 10.1 | | | |
10.7† | | | 8-K | | 000-51378 | | March 20, 2014 | | 10.1 | | | |
10.8† | | | 8-K | | 000-51378 | | December 10, 2018 | | 10.1 | | | |
10.9† | | Employment Agreement, dated November 14, 2014, between TechPrecision Corporation and Alexander Shen | | 8-K | | 000-51378 | | November 20, 2014 | | 10.1 | | |
10.10 | | | 8-K | | 000-51378 | | August 30, 2021 | | 10.11 | | | |
10.11 | | | 8-K | | 000-51378 | | December 20, 2021 | | 10.1 | | | |
10.12 | | | 8-K | | 000-51378 | | March 21, 2022 | | 10.1 | | | |
10.13 | | | 8-K | | 000-51378 | | June 23, 2022 | | 10.1 | | | |
10.14* | | | 8-K | | 000-51378 | | September 19, 2022 | | 10.1 | | | |
10.15* | | | 8-K | | 000-51378 | | December 30, 2022 | | 10.1 | | |
75
Exhibit | | Description | | Incorporated | | File No. | | Date Filed | | Exhibit | | Filed |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |
10.16* | | | 8-K | | 001-41698 | | January 5, 2024 | | 10.1 | | | |
10.17 | | | 8-K | | 001-41698 | | April 9, 2024 | | 10.1 | | | |
10.18 | | | 8-K | | 001-41698 | | June 3, 2024 | | 10.1 | | | |
10.19 | | | 8-K | | 000-41698 | | September 10, 2024 | | 10.1 | | | |
10.20 | | | 8-K | | 000-41698 | | December 26, 2024 | | 10.1 | | | |
10.21 | | | 8-K | | 000-41698 | | May 1, 2025 | | 10.1 | | | |
10.22 | | | 8-K | | 000-41698 | | August 29, 2025 | | 10.1 | | | |
10.23 | | | 8-K | | 000-41698 | | January 14, 2026 | | 10.1 | | |
76
Exhibit | | Description | | Incorporated | | File No. | | Date Filed | | Exhibit | | Filed |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |
10.24 | | | 8-K | | 000-41698 | | May 19, 2026 | | 10.1 | | | |
10.25 | | | 8-K | | 000-51378 | | April 29, 2021 | | 10.1 | | | |
10.26 | | | 8-K | | 000-51378 | | June 29, 2021 | | 10.1 | | | |
10.27 | | | 8-K | | 000-51378 | | August 30, 2021 | | 10.1 | | | |
10.28 | | | 8-K | | 000-51378 | | August 30, 2021 | | 10.2 | | | |
10.29# | | | 8-K | | 000-51378 | | February 3, 2023 | | 10.1 | | | |
10.30* | | | 8-K | | 001-41698 | | July 10, 2024 | | 10.1 | | | |
10.31 | | | 8-K | | 001-41698 | | July 10, 2024 | | 10.2 | | | |
10.32† | | | 8-K | | 001-41698 | | April 1, 2025 | | 10.1 | | | |
19.1 | | | | | | | | | | | X | |
21.1 | | | 10-K | | 001-41698 | | September 13, 2024 | | 21.1 | | | |
23.1 | | | | | | | | | | X | ||
31.1 | | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | | | | | | | X | |
31.2 | | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | | | | | | | X | |
32.1 | | | | | | | | | | X | ||
97.1 | | | 10-K | | 001-41698 | | September 13, 2024 | | 97.1 | | |
77
Exhibit | | Description | | Incorporated | | File No. | | Date Filed | | Exhibit | | Filed |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |
101 | | The following financial information from this Annual Report on Form 10-K for the fiscal year ended March 31, 2026, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at March 31, 2026 and 2025; (ii) the Consolidated Statements of Operations for the years ended March 31, 2026 and 2025; (iii) the Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2026 and 2025; (iv) the Consolidated Statements of Cash Flows for the years ended March 31, 2026 and 2025; and (v) the Notes to the Consolidated Financial Statements. | | | | | | | | | X | |
104 | | Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | | | | | | | | | | X |
† Management contract or compensatory arrangement or plan
* Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and attachments have been omitted. A copy of any omitted schedule or attachment will be furnished supplementally to the Securities and Exchange Commission upon request.
# Certain portions of this Exhibit were redacted pursuant to Item 601(a)(6) of Regulation S-K and marked by means of brackets and asterisks (“[****]”).
Item 16. Form 10-K Summary.
None.
78
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
| TechPrecision Corporation |
|
|
|
June 25, 2026 | By: | /s/ Phillip E. Podgorski |
|
| Phillip E. Podgorski |
|
| Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | | Title | | Date |
|
|
|
|
|
/s/ Alexander Shen |
| Chief Executive Officer, Director |
| June 25, 2026 |
Alexander Shen |
| (Principal Executive Officer) |
|
|
|
|
|
|
|
/s/ Phillip E. Podgorski | | Chief Financial Officer |
| June 25, 2026 |
Phillip E. Podgorski | | (Principal Financial Officer and Principal Accounting Officer) |
|
|
| | |
|
|
/s/ Victor E. Renuart | | Chairperson |
| June 25, 2026 |
Victor E. Renuart | | |
|
|
|
|
|
|
|
/s/ Robert D. Straus |
| Director |
| June 25, 2026 |
Robert D. Straus |
|
|
|
|
|
|
|
|
|
/s/ Andrew A. Levy |
| Director |
| June 25, 2026 |
Andrew A. Levy |
|
|
|
|
|
|
|
|
|
/s/ Walter M. Schenker |
| Director |
| June 25, 2026 |
Walter M. Schenker |
|
|
| |
79
Exhibit 19.1
INSIDER TRADING POLICY
(Effective November 12, 2025)
This Insider Trading Policy (this “Policy”) has been adopted by the Board of Directors (the “Board”) of TechPrecision Corporation (the “Company”) and provides the standards of the Company on trading of the Company’s securities or securities of other publicly-traded companies with whom the Company has a business relationship. This policy is divided into two parts:
1. | the first part prohibits trading in certain circumstances and applies to all directors, officers and employees of the Company; and |
2. | the second part imposes additional trading restrictions and applies to all “Covered Persons,” who are (a) directors of the Company, (b) officers of the Company and its subsidiaries at the level of Vice President and above, and (c) employees in the finance, investor relations and accounting departments. |
One of the principal purposes of the federal and state securities laws is to prohibit so-called “insider trading.” Simply stated, insider trading occurs when a person uses material, nonpublic information obtained through involvement with a company to make decisions to purchase, sell, gift or otherwise trade a company’s securities or to provide that information to others outside such company. The prohibitions against insider trading apply to trades, tips and recommendations by virtually any person, including all persons associated with the Company, if the information involved is “material” and “nonpublic” (these terms are defined in this Policy under Part I, Article IV below).
This Policy is designed to prevent insider trading or allegations of insider trading, and to protect the Company’s and your reputation for integrity and ethical conduct.
PART I
A.APPLICABILITY
This Policy applies to all transactions in (i) the Company’s securities, including common stock, options and any other securities that the Company may issue, such as preferred stock, notes, bonds, warrants and convertible securities, as well as to derivative securities relating to any of the Company’s securities, whether or not issued by the Company, and (ii) another company’s securities, to the extent such securities are of publicly-traded companies with whom the Company has an ongoing business relationship.
This Policy’s trading restrictions generally do not apply to the exercise of a stock option for cash or a true cashless exercise of a stock option. The trading restrictions do apply, however, to any sale of the underlying stock or to a cashless exercise of the option through a broker, as this entails selling a portion of the underlying stock to cover the costs of exercise.
This Policy applies to all directors, officers and employees of the Company and its subsidiaries. The restrictions identified in this Policy also apply to your family members who reside with you, anyone else who lives in your household and any family members who do not live in your household but whose transactions in Company securities are directed by you or are subject to your influence or control (such as parents or children who consult with you before they trade in Company securities). You are responsible for making sure that the purchase or sale of any security covered by this Policy by any such person complies with this Policy.
B. | GENERAL POLICY: NO TRADING OR CAUSING TRADING WHILE IN POSSESSION OF MATERIAL, NONPUBLIC INFORMATION |
1. | No director, officer or employee may purchase, sell or make any gift of any Company security, directly or through family members or other persons or entities, while in possession of material, nonpublic information about the Company (the terms “material” and “nonpublic” are defined in Part I, Section IV.A and Part I, Section IV.B below). |
2. | No director, officer or employee who knows of any material, nonpublic information about the Company may communicate that information or recommend the purchase or sale of the Company’s securities to any other person, including family and friends, which is a practice known as “tipping.” |
3. | No director, officer or employee may purchase or sell any security of any other public company with which the Company has a business relationship, while in possession of material, nonpublic information about that company that was obtained in the course of his or her involvement with the Company. No director, officer or employee who knows of any such material, nonpublic information may communicate that information to any other person, including family and friends. |
4. | Covered Persons must “pre-clear” all purchases, sales and gifts of securities of the Company in accordance with the procedures set forth in Part II, Section III below. |
C. | OTHER PROHIBITED TRANSACTIONS |
Particular types of hedging or monetization transactions allow a person to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the person to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the person may no longer have the same objectives as the Company’s other stockholders. Accordingly, all transactions in the Company’s securities by directors, officers or employees, including such person’s immediate family and the other members of their household, are subject to the following:
1. | Short sales. Directors, officers or employees may not sell the Company’s securities short (sales of securities that are not then owned), including a “sale against the box” (a sale with delayed delivery); |
2. | Options trading. Directors, officers or employees may not buy or sell puts, calls or other derivative securities on the Company’s securities; |
2
3. | Margin accounts and pledging. Directors, officers or employees may not hold Company securities in a margin account against which there is at any time a margin loan or pledge Company securities as collateral for a loan; and |
4. | Hedging. Directors, officers or employees may not enter into hedging or monetization transactions or similar arrangements with respect to Company securities, including zero-cost collars, prepaid variable forward sale contracts, equity swaps and exchange funds. |
D. | DEFINITIONS |
1. | Materiality. Insider trading restrictions come into play only if the information you possess is “material.” Information is generally regarded as “material” if it has market significance, that is, if its public dissemination is likely to affect the market price of securities, or if it otherwise is information that a reasonable investor would want to know before making an investment decision. Information dealing with the following subjects is reasonably likely to be found material in particular situations: |
(i) | significant write-downs in assets or increases in reserves; |
(ii) | developments regarding significant litigation or government agency investigations; |
(iii) | liquidity problems; |
(iv) | projections of future earnings or losses or other earnings guidance; |
(v) | changes in earnings estimates or unusual gains or losses in major operations; |
(vi) | major changes in management; |
(vii) | major events regarding the Company’s securities, including the declaration of a stock split, a change in dividend policy or the offering of additional securities; |
(viii) | extraordinary borrowings or similar financing transactions; |
(ix) | award or loss of a significant contract; |
(x) | changes in debt ratings; and |
(xi) | public or private financings, or proposals, plans or agreements, even if preliminary in nature, involving mergers, acquisitions, divestitures, recapitalizations, strategic alliances, licensing arrangements, joint ventures, or purchases or sales of substantial assets. |
Material information is not limited to historical facts but may also include projections and forecasts. With respect to a future event, such as a merger or acquisition, the point at which negotiations or product development are determined to be material is determined by balancing the
3
probability that the event will occur against the magnitude of the effect the event would have on a company’s operations or stock price should it occur. Thus, information concerning an event that would have a large effect on stock price, such as a merger, may be material even if the probability that the event will occur is not great. Because trading that receives scrutiny will be evaluated after the fact with the benefit of hindsight, questions concerning the materiality of particular information should be resolved in favor of materiality, and trading should be avoided. If you are unsure whether information is material, you should consult the Compliance Officer before making any decision to disclose such information or to trade in or recommend securities to which that information relates.
2. | Nonpublic Information. Insider trading prohibitions come into play only when a person possesses information that is material and “nonpublic.” The fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. To be “public” the information must have been disseminated in a manner designed to reach investors generally (such as by a press release or a filing with the Securities and Exchange Commission (“SEC”)), and the investors must be given the opportunity to absorb the information fully. Nonpublic information may include: |
(i) | information available to a select group of analysts or brokers or institutional investors; |
(ii) | undisclosed facts that are the subject of rumors, even if the rumors are widely circulated; and |
(iii) | information that has been entrusted to the Company on a confidential basis until a public announcement of the information has been made and enough time has elapsed for the market to respond to a public announcement of the information. |
As a general rule, information should be considered nonpublic until the conclusion of the second full trading day after the day on which the information is released. For example, if the Company makes an announcement on a Monday, the first time you can buy or sell Company securities is on Thursday (assuming you are not aware of other material, nonpublic information at that time).
As with questions of materiality, if you are not sure whether information is considered public, you should either consult with the Compliance Officer or assume that the information is “nonpublic” and treat it as confidential.
3. | Compliance Officer. The Board has appointed the Company’s Chief Financial Officer as the compliance officer (the “Compliance Officer”) for this Policy. |
E. | CERTIFICATION |
All employees of the Company must certify their understanding of, and intent to comply with, this Policy, on the form attached to this Policy.
4
F. | VIOLATIONS OF INSIDER TRADING LAWS |
Penalties for trading on or communicating material, nonpublic information can be severe, both for individuals involved in such unlawful conduct and their employers and supervisors, and may include jail terms, criminal fines, civil penalties and civil enforcement injunctions. Given the severity of the potential penalties, compliance with this Policy is absolutely mandatory.
1. | Legal Penalties. Violation of this Policy may result in both civil and criminal penalties under applicable securities laws, including imprisonment for up to 20 years, criminal fines of up to $5 million and civil penalties of up to three times the profits gained, or losses avoided. |
In addition, a person who tips others may also be liable for transactions by the tippees to whom he or she has disclosed material, nonpublic information. Tippers can be subject to the same penalties and sanctions as the tippees, and the SEC has imposed large penalties even when the tipper did not profit from the transaction.
2. | Company-imposed Penalties. Employees who violate this Policy may be subject to disciplinary action by the Company, including dismissal for cause. Any exceptions to the Policy, if permitted, may only be granted by the Compliance Officer and must be provided before any activity contrary to the above requirements takes place. |
PART II
Part II applies to Covered Persons.
A. | BLACKOUT PERIODS |
All Covered Persons are prohibited from trading in the Company’s securities during blackout periods.
1. | Quarterly Blackout Periods. Trading in the Company’s securities is prohibited during the period beginning on the 15th day prior to the end of each fiscal quarter and ending at the close of business on the second trading day following the date of the Company’s earnings release for that fiscal quarter. |
2. | Interim Earnings Guidance. The Company may on occasion issue interim earnings guidance or other potentially material information by means of a press release, SEC filing on Form 8-K or other means designed to achieve widespread dissemination of the information. Covered Persons should anticipate that trading will be prohibited while the Company is in the process of assembling the information to be released and until the information has been released and fully absorbed by the market. |
3. | Other Blackout Periods. From time to time, an event may occur that is material to the Company and is known to only a few directors and executives (such as negotiation of mergers, acquisitions or dispositions or new product developments). So long as the event remains material and nonpublic, the persons who are aware of the event may not trade in the Company’s securities. The existence of an event-specific blackout will not |
5
be announced, other than to those who are aware of the event giving rise to the blackout. If, however, a person whose trades are subject to pre-clearance requests permission to trade in the Company’s securities during an event-specific blackout, the Compliance Officer will inform the requesting person of the existence of a blackout period by means of the Form of Event-Specific Blackout Letter set forth in Exhibit A to this Policy, without disclosing the reason for the blackout. Any person made aware of the existence of an event-specific blackout should not disclose the existence of the blackout to any other person. The failure of the Compliance Officer to designate a person as being subject to an event-specific blackout will not relieve that person of the obligation not to trade while aware of material, nonpublic information.
B. | EXCEPTIONS. |
1. | Hardship Exceptions. A Covered Person who is subject to a quarterly earnings blackout period and who has an unexpected and urgent need to sell Company stock in order to generate cash may, in appropriate circumstances, be permitted to sell Company stock even during the quarterly blackout period. Hardship exceptions may be granted only by the Compliance Officer and must be requested at least two days in advance of the proposed trade. A hardship exception may be granted only if the Compliance Officer reasonably concludes that the individual making the hardship exception request does not possess material, nonpublic information. |
2. | Exceptions for Approved 10b5-1 Plans. These trading restrictions do not apply to transactions under a pre-existing written plan, contract, instruction or arrangement under Rule 10b5-1 (an “Approved 10b5-1 Plan”) that: |
(i)has been reviewed and approved in advance of any trades thereunder by the Compliance Officer (or, if revised or amended, such revisions or amendments have been reviewed and approved by the Compliance Officer);
(ii)was entered into in good faith by the Covered Person at a time when the Covered Person was not in possession of material, nonpublic information about the Company; and
(iii)(x) specifies the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold, (y) includes a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold; or (z) does not permit the Covered Person to exercise any subsequent influence over how, when, or whether to effect purchases or sales;
so long as such Covered Person certifies at the time he or she is adopting the Approved 10b5-1 Plan that such Covered Person does not possess any material, nonpublic information about the Company or its securities and such Covered Person is adopting the Approved 10b5-1 Plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5.
6
A Covered Person may not have multiple Approved 10b5-1 Plans in place that cover the same period of time, except under certain conditions specified in Rule 10b5-1. Such plans must also include a mandatory cooling-off period before trading can commence for Covered Persons that are directors or officers of the Company that expires on the later of (i) 90 days following such plan adoption or modification or (ii) two business days following the disclosure in the Company’s SEC-filed reports of its financial results for the fiscal quarter in which the plan was adopted or modified (but not to exceed 120 days following plan adoption or modification). The plans must also include a mandatory cooling-off period before trading can commence of 30 days for persons other than the Company or officers and directors.
C. | PRE-CLEARANCE OF SECURITIES TRANSACTIONS |
1. | Because Covered Persons are likely to obtain material, nonpublic information on a regular basis, the Company requires all such persons to refrain from transacting in Company securities, even when no blackout period is in effect, without first pre-clearing all transactions in the Company’s securities. |
2. | Subject to the exemption in Part II, Section III.D below, no Covered Person may, directly or indirectly, purchase or sell (or otherwise make any transfer or gift) any Company security at any time without first obtaining prior approval from the Compliance Officer. These procedures also apply to transactions by such person’s immediate family members and other members of their household, and to transactions by entities over which such person exercises control. |
3. | A request for pre-clearance to transact in Company securities should be submitted to the Compliance Officer via email at least one (1) business day in advance of the proposed transaction. When a request for pre-clearance is made, the requestor should summarize the details of the proposed transaction and should not in possession of any “material nonpublic information” concerning the Company or its |
7
securities. The Compliance Officer shall record the date each request is received and the date and time each request is approved or disapproved. If the request is approved, the Compliance Officer shall affirmatively reply to the requester in a timely manner. Unless revoked, a grant of permission will normally remain valid until the close of trading five (5) trading days following the day on which it was granted. If the transaction does not occur during the five (5)-trading day period, pre-clearance of the transaction must be re-requested. If the requestor becomes aware of material, nonpublic information concerning the Company or its securities before the trade is executed, the pre-clearance shall be void and the trade must not be completed. If a person seeks pre-clearance and permission to engage in the transaction is denied, then he or she should refrain from initiating any transaction in Company securities and should not inform any other person of the denial.
4. | Pre-clearance is not required for purchases and sales of securities under an Approved 10b5-1 Plan. With respect to any purchase or sale under an Approved 10b5-1 Plan, the third party effecting transactions on behalf of the Covered Person should be instructed to send duplicate confirmations of all such transactions to the Compliance Officer. |
D. | POST-EMPLOYMENT TRANSACTIONS |
The trading restrictions of this Policy apply to all Covered Persons who are aware of material, nonpublic information when they terminate employment or services. Such Covered Persons may not transact in the Company’s securities until that information has become public or is no longer material. In all other respects, the pre-clearance and blackout procedures set forth in this section of this Policy will cease to apply to such Covered Person’s transactions in the Company’s securities upon the expiration of any “blackout period” that is applicable at the time of such person’s termination of employment or services.
E. | COMPLIANCE WITH SECTION 16 AND RULE 144 |
Covered Persons who are also directors and executive officers are responsible for compliance with Section 16 of the Securities Exchange Act of 1934 (“Section 16”) and Rule 144 of the Securities Act of 1933 (“Rule 144”) in connection with their transactions in the Company’s securities. The requirements of this Policy do not supersede the required compliance with your obligations under Section 16 or Rule 144.
1. | Section 16. Directors and executive officers should be aware that most transactions in Company stock, including bona fide gifts of securities of the Company, are subject to the accelerated two business day reporting requirements under Section 16. The Company’s policy is to assist directors and officers in completing and filing their Section 16 reports. It is important that the Compliance Officer receive prompt notice of reportable transactions, so that the Company can assist in filing the required reports on a timely basis. |
2. | Rule 144. Directors and executive officers are required to file Form 144 before making open market sales of Company stock. This form is generally prepared and filed by such individual’s broker. |
* * * * *
8
INSIDER TRADING POLICY
CERTIFICATION
To TechPrecision Corporation:
I have received and read a copy of the TechPrecision Insider Trading Policy (the “Policy”). I have reviewed and understand how the Policy applies to me and hereby agree to comply with the provisions of the Policy.
| |
(Name) | |
| |
(Signature) | |
| |
(Date) | |
EXHIBIT A
FORM OF EVENT-SPECIFIC BLACKOUT LETTER
Date: ,
CONFIDENTIAL
Dear :
Until further notice, you may not trade in any securities of the Company, as described under “Part I– Applicability” in the Company’s Insider Trading Policy previously delivered to you. You also may not inform anyone else of these restrictions on trading.
These restrictions on trading do not apply to the exercise for cash of stock options granted to you by the Company. However, the sale of stock received from an option exercise, including in a broker-assisted cashless exercise, is subject to the restrictions. The restrictions also do not apply to trading under an approved and previously established Rule 10b5-1 plan.
Very truly yours,
| |
Phil Podgorski | |
| |
Chief Financial Officer, TechPrecision Corporation | |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement of TechPrecision Corporation on Form S-1 (File No. 333-291711, 333-279091 and 333-262063) and Form S-8 (File No. 333-215028, 333-214541, 333-177315, and 333-148152) of our report dated June 25, 2026, with respect to the consolidated financial statements of TechPrecision Corporation (the “Company”) included in this Annual Report on Form 10-K for the years ended March 31, 2026 and 2025.
/s/ CBIZ CPAs P.C.
Philadelphia, Pennsylvania
June 25, 2026
Exhibit 31.1
CERTIFICATION
I, Alexander Shen, certify that:
1. I have reviewed this annual report on Form 10-K of TechPrecision Corporation for the year ended March 31, 2026;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and |
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: June 25, 2026 | /s/ Alexander Shen |
| Alexander Shen |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
I, Phillip Podgorski, certify that:
1. I have reviewed this annual report on Form 10-K of TechPrecision Corporation for the year ended March 31, 2026;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and, |
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: June 25, 2026 | /s/ Phillip E. Podgorski |
| Phillip E. Podgorski |
| Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of TechPrecision Corporation (the “Company”) for the year ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alexander Shen, the Chief Executive Officer of the Company, and I, Phillip E. Podgorski, the Chief Financial Officer of the Company, do hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: June 25, 2026 | /s/ Alexander Shen |
| Alexander Shen |
| Chief Executive Officer (Principal Executive Officer) |
| |
Dated: June 25, 2026 | /s/ Phillip E. Podgorski |
| Phillip E. Podgorski |
| Chief Financial Officer (Principal Financial Officer) |