TechPrecision Corporation (NASDAQ:TPCS)

Techprecision Corp (OOTC:TPCS) an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced the acquisition of Votaw Precision Technologies, a leading precision manufacturing company with comprehensive and vertically integrated capabilities and capacity in precision machining, fabrication, large complex assembly, testing and finishing, enabling it to support a diverse customer base from first article to full-rate production.

Votaw, whose fiscal year ends October 31, projects its FY23 revenue to be approximately $46M; its net income to be approximately $4.7M; and its EBITDA to be approximately $7.7M.

Below is a brief summary of the terms of the SPA. For more complete information, please see our Current Report on Form 8-K to be filed with the Securities and Exchange Commission and the full text of the agreement filed with such Current Report.

• Purchase Price: $85M on a cash and debt free basis.

• Closing Payment: TechPrecision will pay $70M to Seller at closing.

• Semi-annual payments: TechPrecision will pay Seller $2.5M every six months thereafter until it has paid a total of $15M.

• Earnout: TechPrecision will be obligated to pay up to an additional $25M as an earnout payment; to be paid out over three years starting June 30, 2024, based on Votaw's FY2024 EBITDA. The earnout payment will be determined by a formula based on Votaw's achieving FY2024 of EBITDA over $11.175M and will be $25M if EBITDA is at least $14.1M.

• Equipment Purchase: Seller is paying for up to three new machines currently being installed or scheduled to be installed in calendar year 2024, at a cost to it of up to approximately $6.6M.

• Closing Date: The acquisition is expected to be completed between December 15, 2023, and March 31, 2024, subject to the satisfaction of customary closing conditions.

• Termination Rights: TechPrecision has 45 days from the date of signing to complete its ongoing due diligence to its satisfaction or terminate the SPA without recourse.

Techprecision Corp (OOTC:TPCS) ($6.98; $60.3M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced it has been approved to uplist to the NASDAQ. The stock will begin trading on the NASDAQ on May 5, 2023 under its current ticker symbol.

Recall, in February 2023, the company effected a 1 for 4 reverse split to meet requirements for a potential NASDAQ listing. 

Techprecision Corp (OOTC:TPCS)($1.69; $4.8M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems filed a NT-10Q (late filing).  As we mentioned before, NT filings sometimes contain specific results if the changes are significant. For Q2 2022 the company expects to report:

• Sales of $8.5 million vs $4.8 million in the prior year
• EPS of $0.01 vs a loss of $0.01

Please note the filing was Monday after the market hours and the year over year revenue results are benefitting from the company’s acquisition of Stadco in August 2021. More importantly, per our discussion with GeoInvesting Member Mark Gomes (backing out the numbers), that Stadco may have experienced a significant  improvement in gross margins. This would come on top of the company’s legacy business posting strong gross margins in Q2.

Techprecision Corp (OOTC:TPCS), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced Q4 2022 results:

• Sales of $7.6 million vs $4.0 million in the prior year

• Loss per share of $0.01 vs EPS of $0.01

“We are pleased and encouraged by the results of our focus, and our path forward is clear: rebuild Stadco back to profitability with disciplined and sustainable actions, including specific initiatives to right-size costs and ‘do it right the first time,' improving operational accountability and reducing unplanned overtime," added Mr. Shen. "We believe these improvements coupled with the material increase in our backlog provide a solid base to grow the Company."

Techprecision Corp (OOTC:TPCS) ($1.74; $59.6M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced Q3 2022 results:

• Sales of $6.5 million vs $3.5 million in the prior year
• Loss per share of $0.04 vs loss of $0.00

“Strong business prospects are evidenced by the significant increase in sales orders. We expect margins to improve as the current mix of unfavorable projects are completed and we begin work on new orders of repeat business. In addition, one-time costs are expected to decrease materially as we move past the initial integration and transaction reporting requirements related to the acquisition of Stadco. We are encouraged by the prospects for growing our revenue and increasing profitability in future quarters."

Additional comments in the 10-Q regarding the pressures on margins state: 

Cost of sales consists primarily of raw materials, parts, labor, overhead and subcontracting costs. Our cost of sales for the three months ended December 31, 2021 was $6.0 million, or 111% higher when compared to the three months ended December 31, 2020. Gross margin was 7.3% for the three months ended December 31, 2021 and 19.8% for the three months ended December 31, 2020. Gross profit was $0.5 million for the three months ended December 31, 2021, or 32% lower, when compared to the three months ended December 31, 2020, primarily the result of higher labor and overhead costs

This is the first quarterly period that includes the operations of our Stadco business for the entire quarterly period. We also recorded higher labor costs and under-absorbed factory overhead during the third quarter because of a lower number of available production hours

Techprecision Corp (OOTC:TPCS) ($1.90; $56.0M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced Q4 2021 results:

• Sales of $4.8 million vs $4.7 million in the prior year
• Loss per share of $0.01 vs EPS of $0.01

"Our financials for the second quarter of fiscal 2022 include 36 days of activity from our newly acquired subsidiary, STADCO. As we began to integrate the STADCO operations, we recognized additional revenue, but absorbed additional costs that dampened our margins, and added to our selling, general and administrative, and interest expenses," stated Alexander Shen, TechPrecision's Chief Executive Officer. Our backlog for sales orders was $26.4 at September 30, 2021, which included the addition of STADCO backlog.

Key personnel and assets remain in place as we begin to integrate the STADCO business," added Mr. Shen. "We believe business prospects are good as we expect higher revenues for the Company in future quarters."

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Techprecision Corp (OTC:TPCS) ($2.26; $66.9M market cap) - Select long TPCS shares hit a new high of $2.34 in yesterday’s trading session. In our September 27, 2021 email, we highlighted that the company was back in favor as shares rose over 60% in the last 6 months.

We’ve been following TPCS since 2011. The company  manufactures and sells precision, large-scale fabricated, and machined metal structural components and systems primarily in the United States. It offers custom components for ships and submarines, aerospace equipment, nuclear power plants, and large scale medical systems. 

We became increasingly interested in the company in June 2019 to track if it would  benefit from the United States Navy plans to modernize and expand its submarine fleet, a 20 year plan that will cost $21 billion, and added the stock to our Select Longs Disclosure List shortly thereafter, in July at a price of $1.29.

Mark Gomes, a GeoInvesting member and contributor also likes the company. Yesterday, Mark published an article on his site, “TPCS Is Taking Flight (Don't Miss The Boat)”.

“...defense stock outperformance would be nothing new. Over the past two decades, the SPADE Defense Index has outperformed the S&P 500 by more than 120 percent. As we enter a new mega-cycle of defense spending, that outperformance is poised to move to a whole new level (especially with the major macro themes of Federal spending and geopolitical tension delivering heavy tailwinds to the sector).”

Mark lays out the case for a potential multibagger as the recent acquisition of Stadco and global ramp-up in demand accelerate. He believes it might take a little time for the story to play out, but much like us, we know Mark is a patient investor who sticks by his bullish bets.

Techprecision Corp (OOTC:TPCS) ($1.55; $45.7M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems announced Q3 2021 results:

• Sales of $3.6 million vs $3.7 million in the prior year
• Loss per share of $0.00 vs loss per share of $0.01

"Our results for the third quarter were highlighted by a more favorable project mix which drove improved gross margins when compared to the same period a year ago," stated Alexander Shen, TechPrecision's Chief Executive Officer. "We have also realized manufacturing improvements on the remaining components which negatively impacted our prior year results with learning-curve related costs.

This outcome resulted in an overall improvement in reported financial results for the first nine months of fiscal 2021 when compared to the same period in the prior year," added Mr. Shen. "We expect to carry these improvements in revenues and margins into the last quarter of fiscal 2021 and beyond."

Techprecision Corp (OOTC:TPCS) ($1.44; $42.4M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced Q1 2021 results:

• Sales of $3.3 million vs $4.3 million in the prior year
• Net loss of $0.01 vs EPS of $0.01 in the prior year

"As we discussed at the end of fiscal 2020, we have learning-curve challenges on a limited number of projects in the manufacturing schedule, resulting in an unfavorable financial impact. These projects as well as an unfavorable mix of other lower-margin projects contributed to our net loss in the first quarter of fiscal 2021," stated Alexander Shen, TechPrecision's Chief Executive Officer. "The project mix also contributed to slower project turnover, dampening revenue during the first quarter. We do, however, expect overall improvement in revenues and margins during the remainder of fiscal 2021."

"The Company's sales order backlog was $14.4 million on June 30, 2020 compared with $16.8 million on March 31, 2020." stated Mr. Shen. "We continue to replenish backlog as we booked over $4.0 million of new orders in the month of July."

Techprecision Corp (OOTC:TPCS) ($1.49; $43.7M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced Q4 2020 results:

• Sales of $4.9 million vs $4.7 million in the prior year
• Non-GAAP EPS of $0.02 vs $0.02

"As we discussed at the end of the previous quarter, increased loss provisions of $1.0 million due to learning-curve challenges on a limited number of new projects had an unfavorable impact on fiscal 2020 results," stated Alexander Shen, TechPrecision's Chief Executive Officer. "A number of these units have now been completed, and we expect improved margins going forward as the remaining of these projects approach completion, their costs stabilize, and additional profitable projects come on-line during FY 2021...

...The Company's sales order backlog was $16.8 million on March 31, 2020 compared to $12.6 million the year prior, as approximately $20.1 million of additional orders were booked over the full year of fiscal 2020," stated Mr. Shen. "We continue to replenish backlog and we believe this will provide for a steady revenue stream and profitable margins in fiscal 2021."

Techprecision Corp (OOTC:TPCS) ($1.61; $47.3M market cap), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems, announced Q3 2020 results:

• Sales of $3.7 million vs $4.3 million in the prior year
• Loss of $0.01 vs EPS of $0.01 in the prior year
• Backlog of $17 million vs $12.6 million in the prior year

"Our results for the third quarter were negatively impacted by learning-curve related cost overruns that resulted in negative margins and increased loss provisions on a limited number of new projects," stated Alexander Shen, TechPrecision's Chief Executive Officer. "These new projects are an opportunity to demonstrate technical excellence in custom know-how of complex fabrication and complex machining, and represent a definite entry point into new business prospects. We expect improved margins going forward as these projects approach completion, costs stabilize, and additional profitable projects come on-line."

		Years ended March 31,
		2016				2015
Net sales		$	16,853,952			$	18,233,214
Cost of sales			11,360,206				15,925,742
Gross profit			5,493,746				2,307,472
Selling, general and administrative			3,385,009				4,533,181
Income (loss) from operations			2,108,737				(2,225,709	)
Other income (expense)			1,199				(4,633	)
Interest expense			(752,280	)			(1,514,465	)
Interest income			30				121
Total other expense, net			(751,051	)			(1,518,977	)
Income (loss) before income taxes			1,357,686				(3,744,686	)
Income tax benefit			(768	)			(160,505	)
Net income (loss)		$	1,358,454			$	(3,584,181	)
Other comprehensive income (loss), before tax:
Reclassification adjustments for cash flow hedges		$	--			$	248,464
Change in unrealized loss on cash flow hedges			--				(16,681	)
Foreign currency translation adjustments			(1,993	)			(334	)
Other comprehensive income (loss), before tax			(1,993	)			231,449
Tax expense from reclassification adjustment			--				152,791
Other comprehensive income (loss), net of tax		$	(1,993	)		$	78,658
Comprehensive income (loss)		$	1,356,461			$	(3,505,523	)
Net income (loss) per share (basic)		$	0.05			$	(0.15	)
Net income (loss) per share (diluted)		$	0.05			$	(0.15	)
Weighted average number of shares outstanding (basic)			26,392,514				24,120,402
Weighted average number of shares outstanding (diluted)			26,572,737				24,120,402

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On June 21, 2016, TechPrecision Corporation (the "Company") entered into a Termination, Separation and Release Agreement (the "Separation Agreement") with Richard F. Fitzgerald, who served as Chief Financial Officer of the Company until October 23, 2015. The Separation Agreement is dated and effective as of June 14, 2016. The Separation Agreement concludes Mr. Fitzgerald's employment agreement with the Company, dated March 23, 2009. Pursuant to the Separation Agreement, until October 23, 2016, Mr. Fitzgerald will provide services as a consultant to the Company as set forth in the Separation Agreement, and the Company will pay Mr. Fitzgerald, in scheduled installments through May 2017, an aggregate amount of $216,666.70. In addition, the Company will pay legal expenses up to $7,953.65 incurred by Mr. Fitzgerald in connection with negotiating and entering into the Separation Agreement.

In addition to the compensation arrangements described above, the Separation Agreement contains customary provisions relating to confidentiality, non-competition, and non-disparagement and includes provisions for a general release of claims.

Item 1.01                          Entry into a Material Definitive Agreement.

People's Capital and Leasing Corp. Equipment Loan Facility

On April 26, 2016, TechPrecision Corporation (the "Company"), through its wholly owned subsidiary Ranor, Inc. ("Ranor"), executed and closed a Master Loan and Security Agreement No. 4180, as supplemented by Schedule No. 001 (together, the "MLSA"), with People's Capital and Leasing Corp. ("People's"). The MLSA is dated and effective as of March 31, 2016. Loan proceeds were disbursed to Ranor on April 26, 2016. Pursuant to the MLSA, People's agreed to loan $3,011,648 to Ranor (the "People's Loan"). The People's Loan is secured by a first lien on certain machinery and equipment of Ranor (the "Equipment Collateral"). Payments on the People's Loan will be made in 60 monthly installments of $60,921.07 each, inclusive of interest at a fixed rate of 7.90% per annum. The first monthly installment payment will be due on May 26, 2016. A prepayment penalty will apply during the first four years of the loan term. Ranor's obligations under the MLSA are guaranteed by the Company. The Company covenants to maintain a debt service coverage ratio ("DSCR") of at least 1.5 to 1.0 during the term of the People's Loan. The DSCR will be measured at the end of each fiscal year of the Company.

The People's Loan may be accelerated upon the occurrence of an "Event of Default" (as defined in the MLSA). Events of Default include (i) the failure to pay any monthly installment payment before the fifth day following the due date of such payment, (ii) the sale, transfer or encumbrance of any Equipment Collateral or other assets of Ranor or the Company (except as otherwise permitted by the terms of the MLSA), (iii) failure to maintain insurance as provided in the MLSA, (iv) failure of Ranor or the Company to observe or perform any obligations under the MLSA or any other obligation to People's, (v) failure to pay any indebtedness (other than the People's Loan) or to perform any covenant relating to any such indebtedness, (vi) Ranor's default under any lease for property where any of the Equipment Collateral is located, (vii) Ranor or the Company cease doing business as a going concern, make an assignment for the benefit of creditors, or commence a bankruptcy or other similar insolvency proceeding, (viii) Ranor or the Company terminate their existence, sell all or substantially all of their assets, or merge into another entity, and (ix) the entry of a judgment against Ranor or the Company in excess of $50,000 which is not fully covered by insurance and which could have a material adverse effect on Ranor or the Company. Some of the Events of Default are subject to certain cure periods.
In connection with the MLSA, $2,653,352.51 of the proceeds from the People's Loan were disbursed to Utica Leaseco, LLC as payment in full of an existing equipment loan (the "Utica Loan"). People's retained a holdback in the amount of $182,763.21. The holdback will be released to Ranor provided there is no Event of Default under the MLSA and the Company achieves a DSCR of at least 1.5 to 1.0 as of March 31, 2016. If the DSCR is not achieved as of March 31, 2016, then the funds held back will not be released to Ranor until the DSCR covenant is satisfied as of the end of a subsequent fiscal year. Ranor retained $175,532.28 of the proceeds from the People's Loan for general corporate purposes.
The description of the MLSA is qualified in its entirety by reference to the full text of the MLSA, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Amendment of Revere High Yield Fund, LP Facility

On April 26, 2016, the Company and Ranor executed and closed on a Loan Documents Modification Agreement No. 3 (the "Amendment") with Revere High Yield Fund, LP ("Revere"). The Amendment, dated and effective as of March 31, 2016, amends that certain Term Loan and Security Agreement dated December 22, 2014 (the "TLSA") between Ranor and Revere pursuant to which Revere agreed to loan an aggregate of $2,250,000 to Ranor (the "Revere Loan").
 
The Amendment, among other things, (i) permits Ranor to pay off in its entirety the indebtedness owed under the Utica Loan with proceeds from the People's Loan, (ii) adds the People's security interest as a "Permitted Lien" under the TLSA, (iii) deletes certain references to Utica Leaseco, LLC, the Utica Loan and loan documents related to the Utica Loan and replaces those references with new definitions relating to the People's Loan, (iv) adds the People's Loan and the Company's guaranty of the People's Loan as "Existing Indebtedness" under the TLSA, (v) requires Ranor, People's and Revere to enter into an Intercreditor and Subordination Agreement (the "Intercreditor Agreement") to, among other things, establish the relative priorities between Revere and People's with regard to certain assets of Ranor, (vi) requires Ranor to cause People's and Revere to enter into a Mortgagee's Disclaimer and Consent (the "Mortgagee Consent") to, among other things, require that Revere permit People's access to certain real property owned by Ranor and mortgaged to Revere as collateral for the Revere Loan in the event that Ranor defaults on the People's Loan and Revere has taken possession of the real property, and (vii) includes a reaffirmation of the Company's guarantee of Ranor's obligations under the TLSA.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 31, 2016, TechPrecision Corporation (the "Company") entered into an Employment Agreement with Thomas Sammons (the "Employment Agreement"), which is effective as of January 20, 2016 and governs Mr. Sammons's employment as Chief Financial Officer of the Company. Pursuant to the Employment Agreement, Mr. Sammons will: (i) receive an annual base salary of $200,000; (ii) receive an award of stock options to purchase 500,000 shares of the Company's common stock pursuant to the TechPrecision Corporation 2006 Long-Term Incentive Plan, as amended, with an exercise price equal to the fair market value of the common stock on the grant date and which shall vest in substantially equal amounts on the date of initial grant and each of the subsequent two anniversaries of the date of grant; and (iii) be eligible for an annual cash performance bonus of up to 50% of base salary, subject to goals and objectives set by the Chief Executive Officer and Board of Directors (the "Board") of the Company. Under the Employment Agreement, Mr. Sammons also will be eligible to participate in Company benefits provided to other senior executives as well as benefits available to Company employees generally.

The Employment Agreement also provides for certain severance payments to Mr. Sammons in the event of his termination. If Mr. Sammons is terminated without "Cause" or Mr. Sammons terminates his employment for "Good Reason" 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. Under the Employment Agreement, "Cause" is defined to include, without limitation, (i) Mr. Sammons's failure or refusal to perform his material duties and responsibilities (other than any such failure resulting from Mr. Sammons's death) or his repeated failure or refusal to follow lawful and reasonable directives of the Board; (ii) the willful misappropriation by Mr. Sammons of the funds or property of the Company or its affiliates; (iii) the commission by Mr. Sammons of any willful or intentional act, which he should reasonably have anticipated would reasonably be expected to have the effect of materially injuring the reputation, business or business relationships of the Company or its affiliates; (iv) use of alcohol to excess or illegal drugs, continuing after written warning from the Board; or (v) any breach by Mr. Sammons of any material provision of the Employment Agreement. Mr. Sammons's written notice within thirty days after the occurrence of any of the following, without his consent and not cured within thirty days after the Company's receipt of such notice, constitutes "Good Reason" under the Employment Agreement: (i) Mr. Sammons suffers a material adverse change in the duties, responsibilities or effective authority associated with his titles and positions; or (ii) a material reduction by the Company of Mr. Sammons's base salary.

In addition to the compensation and severance arrangements described above, the Employment Agreement contains customary provisions (i) prohibiting Mr. Sammons 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. Sammons during the term of his employment with the Company are the sole property of the Company; and (iii) prohibiting Mr. Sammons 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 replaces and supersedes in its entirety the Employment Agreement, dated February 4, 2014, between Ranor, Inc., a subsidiary of the Company, and Mr. Sammons.

The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

Item 1.01 Entry into a Material Definitive Agreement.

On January 22, 2016, TechPrecision Corporation (the "Company") and its wholly owned subsidiary, Ranor, Inc. ("Ranor"), entered into the Note and Other Loan Documents Modification Agreement No. 2 (the "Amendment") with Revere High Yield Fund, LP ("Revere"), which amends that certain Term Loan and Security Agreement, dated December 22, 2014 (the "TLSA") between Ranor and Revere pursuant to which Revere agreed to loan an aggregate of $2.25 million to Ranor. In connection with the Amendment, Ranor entered into an Amended and Restated Term Loan Note in the aggregate principal amount of $1.5 million (the "Note A") and an Amended and Restated Term Loan Note in the aggregate principal amount of $750,000 (the "Note B" and together with the Note A, the "Notes"), each in favor of Revere and each dated January 22, 2016.

The Amendment (a) extends the maturity date of the term loans made pursuant to the TLSA to January 22, 2018, (b) amends the amortization schedule such that payments under the TLSA and Notes are due as follows: (i) payments of interest only on advanced principal on a monthly basis on the first day of each month from March 1, 2016 until January 1, 2017 and (ii) payments of $9,375 in principal plus accrued interest on a monthly basis on the first day of each month from February 1, 2017 until January 22, 2018, (c) reduces the annual interest rate on the unpaid principal balance of the loans to 10% per annum (the "Interest Rate") from 12% per annum, (d) amends the definition of the "Minimum Guaranteed Interest" payable by Ranor to Revere on the earlier of prepayment in full of the loans or payment in full of the loans on the maturity date to the greater of (i) twelve (12) months interest at the Interest Rate on the amount outstanding on the loans or (ii) interest due on any amount advanced under the TLSA at the Interest Rate, (e) adds a restrictive covenant whereby Ranor must maintain monthly minimum cash balances, with failure to comply with such restrictive covenant an event of default pursuant to which Revere may accelerate the repayment of the loans, and (f) includes a reaffirmation of the Company's guarantee of Ranor's obligations under the TLSA and the Notes pursuant to a Guaranty Agreement between the Company and Revere.

Item 1.01 Entry into a Material Definitive Agreement.

On December 31, 2015, TechPrecision Corporation (the "Company") and its wholly owned subsidiary Ranor, Inc. ("Ranor") executed a Note and Other Loan Documents Modification Agreement (the "Modification Agreement") to the Term Loan and Security Agreement, dated December 22, 2014, between Revere High Yield Fund, LP (the "Lender") and Ranor (as so amended, the "Loan Agreement"). Pursuant to the Loan Agreement, the Lender loaned an aggregate of $2.25 million to Ranor under two term loan notes (the "Notes"). Ranor's obligations under the Loan Agreement and the Notes are guaranteed by the Company pursuant to a Guaranty Agreement with the Lender (the "Guaranty Agreement" and, together with the Loan Agreement, the Notes and certain other documents entered into in connection with the Loan Agreement, the "Loan Documents").

The Modification Agreement extends the maturity date of the Loan Agreement and the Notes from December 31, 2015 to January 22, 2016 and provides that Ranor agrees to waive its right to extend the maturity date of the Loan Agreement and the Notes by six months as set forth in the Loan Agreement. Other than the changes described in the preceding sentence, all other terms and conditions of the Loan Documents remain the same and in full force and effect.
The foregoing summary of the Modification Agreement is qualified in its entirety by reference to the full text of the Modification Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.

 

Second Quarter 2016 Financial Results

• Net sales were $4.1 million compared to $4.6 million in the year-ago quarter and compared sequentially to the $4.4 million reported in Q1 of fiscal 2016.
• Net income (loss) per share (diluted) was $0.01 vs. last years same quarter $(0.03).

"This was another quarter of operational and financial progress, as we delivered our second consecutive quarter of net profit and expanded our sales order backlog by approximately $3 million in the last six months," stated Alexander Shen, TechPrecision's Chief Executive Officer. "Our continued efforts with our core customers enabled us to expand our backlog at September 30, 2015 to approximately $17.5 million compared to $14.3 million at March 31, 2015. We improved profitability in the second quarter of fiscal year 2016 on a sales volume that was 10% lower than the same period last fiscal year. We ended Q2 FY2016 with a 25% decrease in selling, general, and administrative expense, and had a net profit of 6% compared to a net loss of 14% for Q2 FY15. We achieved these results with our consistent sharp focus on productivity initiatives, resource realignment, and top line growth with key customers."

"Moving forward, we intend to maintain the sharp focus that got us to this point of our recovery," continued Mr. Shen. "We plan to increase our backlog and focus on new business contracts with our core customers which utilize our core competencies in custom, large scale, high precision fabrication and machining, and leverage our established expertise, certifications, and qualifications in the defense, nuclear, and precision industrial sectors. We must continue to execute and maintain operational run rate improvements to improve gross margins, and increase the amount of cash generated from operations."

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers

Appointment of Principal Financial Officer

On October 23, 2015, in connection with the resignation of Richard Fitzgerald as Chief Financial Officer of TechPrecision Corporation (the "Company"), the Company appointed Thomas Sammons, who joined the Company in March 2015 as Vice President, Finance, of the Company's wholly owned subsidiary, Ranor, Inc., to succeed Mr. Fitzgerald as Chief Financial Officer of the Company effective on October 23, 2015. In his capacity as Chief Financial Officer, Mr. Sammons will serve as the Company's principal financial officer and principal accounting officer.
 
Mr. Sammons, 60, has served as Vice President, Finance, of Ranor, Inc. since March 9, 2015. Prior to joining the Company, Mr. Sammons served as the financial controller of Xchanging Services, Inc., an international provider of technology-enabled business processing, technology and procurement services, from February 2012 through February 2015 and as international controller and business unit controller at Ryerson, Inc., a metals distribution and processing company, from May 2005 through January 2012. Mr. Sammons holds certifications as a Certified Management Accountant and a Certified Financial Manager and received his B.S. in Business Administration from SUNY, Empire State College and an M.B.A. from Cornell University.

First Quarter 2016 Financial Results

• Net sales decreased 30% or $1.9 million to $4.4 million down from $6.2 million in the year-ago quarter but increased 12% from $3.9 million in revenues sequentially from fiscal Q4 of 2015. 
• The net income was $0.2 million for the first quarter compared to a net loss of $1.3 million in the prior year first quarter and compared sequentially to a net loss of $0.7 million in the fourth quarter of fiscal 2015.

"Opening the first quarter of fiscal year 2016 with net profit is certainly a significant achievement for all of us. This is the first profitable quarter the Company has reported since June 30, 2011 and the first profitable quarter since I joined the Company back in late June, 2014. We achieved this result with our consistent sharp focus on productivity initiatives, resource realignment, and top line growth with key customers. We improved profitability on a sales volume that was 30% lower than the same period last fiscal year. We ended the first quarter of fiscal year 2016 with a 39% decrease in selling, general, and administrative expense, and a positive gross margin of 29% compared to 3.5% for Q1 FY15," stated Alexander Shen, TechPrecision's Chief Executive Officer.

"Moving forward, we intend to maintain the sharp focus that got us to this point of our recovery. We plan to increase our backlog and focus on new business contracts which utilize our core competencies in custom, large scale, high precision fabrication and machining, with our core customers, which leverage our established expertise, certifications, and qualifications in the defense, nuclear, and precision industrial sectors. We must continue to execute and maintain operational run rate improvements to improve gross margins, and increase the amount of cash generated from operations."

Item 1.01 Entry into a Material Definitive Agreement.

Entry into a New Lease

On June 1, 2015, TechPrecision Corporation (the “Company”) entered into an office lease (the “New Lease”) with GPX Wayne Office Properties, L.P. (the “New Landlord”), pursuant to which the Company will lease approximately 1,100 square feet located at 992 Old Eagle School Road, Wayne, PA 19087 (the “Wayne Property”), commencing on the earlier of (i) the date when the Company assumes possession of the Wayne Property or (ii) the date set in a notice by the New Landlord to the Company at least fifteen days before the substantial completion of certain leasehold improvements to the Wayne Property (the “Commencement Date”), such Commencement Date anticipated to be on or about June 15, 2015. The initial term of the New Lease will expire on the last day of the twelfth calendar month after the Commencement Date, unless sooner terminated in accordance with the terms of the New Lease. The Company’s monthly base rent for the Wayne Property will be $1,837.88 per month in addition to payments for electricity (on a proportionate ratio basis for the entire building), certain contributions for leasehold improvements, and certain other additional rent items (including certain taxes, insurance premiums and operating expenses). Other than as described above, there is no relationship between the Company and the New Landlord.

Termination of Prior Lease

On June 4, 2015, the Company entered into a lease termination agreement (the “Termination Agreement”) with CLA Building Associates, L.P. (“Prior Landlord”) pursuant to which the Company and Prior Landlord agreed to terminate that certain Lease Agreement, dated March 15, 2015, by and between the Company and Prior Landlord (the “Prior Lease”). As a result of the Termination Agreement, the Prior Lease will be terminated on, and the Company will vacate its corporate offices located at 2 Campus Boulevard, Newtown Square, PA 19073 on or before June 30, 2015. Other than as described above, there is no relationship between the Company and the Prior Landlord.

Item 1.01 Entry into a Material Definitive Agreement.

On April 17, 2014, TechPrecision Corporation (the “Company”), through its wholly owned subsidiary, Ranor, Inc. (“Ranor”), entered into an Assignment of Claim Agreement (the “Assignment Agreement”) with Citigroup Financial Products Inc. (“Citigroup”). Pursuant to the terms of the Assignment Agreement, Ranor agreed to sell, transfer, convey and assign to Citigroup all of Ranor’s right, title and interest in and to Ranor’s unsecured claim against GTAT Corporation (“GTAT”) in the aggregate amount of $3,740,956.34 (the “Claim”).

As previously disclosed, GTAT, together with certain of its direct and indirect subsidiaries, or collectively, the GTAT Group, commenced voluntary cases under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire. The GTAT Group’s bankruptcy filing caused an automatic stay in any arbitration proceedings in which the GTAT Group is involved, including the arbitration proceeding with Ranor (the “Ranor Arbitration”). The automatic stay under the Bankruptcy Code stayed the arbitration with the GTAT Group as a matter of law. The Company’s claim asserted in the Ranor Arbitration was then asserted as an unsecured creditor claim in the GTAT Group’s bankruptcy case.

Pursuant to the Assignment Agreement, Citigroup will pay to Ranor an initial amount equal to $1,122,286.90, subject to a 54.75% holdback (the “Holdback”), such Holdback to be paid either (A) upon receipt of written notice that the Claim (or any portion thereof) has been fully and finally allowed against GTAT as a non-contingent, liquidated, and undisputed general unsecured claim, been listed as non-contingent, liquidated, and undisputed on schedules filed by GTAT with the Bankruptcy Court, or appeared on the claim’s agent’s or trustee’s or other estate representative’s records, or has otherwise been conclusively and finally treated in the GTAT proceedings, as “allowed” or “accepted as filed”; or (B) the time period during which any party (including GTAT) is permitted to file an objection, dispute or challenge with respect to the Claim in the proceedings expires and no objection, dispute or challenge has been filed with respect to any portion of the Claim. If the total amount of the Claim is allowed against GTAT, then Citigroup must pay the Company the entire Holdback; however; if the amount of the Claim allowed is greater than $1,692,782.74 but less than the total Claim amount, then Citigroup only has to pay the Company an amount equal to the Holdback minus the product of 30% multiplied by the difference between the total Claim amount and the claim amount actually allowed against GTAT. If the total amount of the Claim allowed against GTAT is less than $1,692,782.74, then Ranor may be obligated to repurchase, at Citigroup’s election, any portion of the Claim not allowed below $1,692,782.74 multiplied by 30%, plus interest at 7% per annum from April 21, 2015 through the repurchase date on any portion of the claim Ranor is obligated to repurchase from Citigroup. The Company cannot predict the amount at which the Claim will be finally allowed or admitted in the GTAT bankruptcy proceeding and cannot guarantee that it will receive any additional payment on the Claim.

Management Discussion and Analysis

Net Sales

For the three months ended December 31, 2014, net sales decreased by $1.6 million, or 32%, to $3.5 million. By market sector, Net Sales  decreased in our naval/maritime group by $1.3 million or 54% on lower demand for products from certain defense customers,  decreased in our energy group by $0.3 million or 26% because of delayed shipments and soft energy contract demand, and  decreased in our precision industrial group by less than 1% on flat demand quarter over quarter. Certain customers have not achieved anticipated demand levels for their products and have delayed orders under our purchase and sale agreements.
 
Additional shipments for sapphire production furnaces were delayed under a purchase agreement with GTAT, which has indicated a desire to reduce the number of units ordered under the contract. We have been unable to replace the delayed GTAT production units originally scheduled in fiscal 2015 with new orders in a timely manner. We have filed a demand for arbitration under the terms of the agreement. GTAT’s bankruptcy filing on October 6, 2014 causes and automatic stay suspending administration of the arbitration and the  claim in the arbitration is now considered an unsecured creditor claim within GTAT’s overall bankruptcy proceedings. Manufacturing activities and shipments under this contract have been suspended until a settlement can be reached among the parties.

Net Loss
 
Our net loss was $0.9 million, or $0.04 per share basic and fully diluted, for the three months ended December 31, 2014, as compared to net loss of $0.8 million, or $0.04 per share basic and fully diluted, for the three months ended December 31, 2013.

Item 1.01 Entry into a Material Definitive Agreement

On December 22, 2014, TechPrecision Corporation (the “Company”), through its wholly owned subsidiary, Ranor, Inc. (“Ranor”), entered into a Term Loan and Security Agreement (the “TLSA”) with Revere High Yield Fund, LP (“Revere”). Pursuant to the TLSA, Revere agreed to loan an aggregate of $2.25 million to Ranor under a Term Loan Note in the aggregate principal amount of $1.5 million (the “First Loan Note”) and a Term Loan Note in the aggregate principal amount of $750,000 (the “Second Loan Note” and together with the First Loan Note, the “Notes”). The First Loan Note is collateralized by a secured interest in all of Ranor’s Massachusetts facility and certain machinery and equipment at Ranor. The Second Loan Note is collateralized by a secured interest in certain accounts, inventory and equipment of Ranor. Payments under the TLSA and Notes are due as follows: (a) payments of interest only on advanced principal on a monthly basis on the first day of each month from February 1, 2015 until December 31, 2015 with an annual interest rate on the unpaid principal balance of the Notes equal to 12% per annum and (b) the principal balance plus accrued and unpaid interest payable on December 31, 2015. Ranor’s obligations under the TLSA and the Notes are guaranteed by the Company pursuant to a Guaranty Agreement (the “Guaranty Agreement”) with Revere.

Pursuant to the TLSA, Ranor is subject to certain affirmative covenants which, among other things, require Ranor to (1) maintain certain levels of insurance; (2) preserve and defend the collateral; and (3) provide Revere with certain ongoing financial, labor and other information. Additionally, pursuant to the TLSA, Ranor is subject to certain restrictive covenants which, among other things, restrict Ranor’s ability to (1) create, incur, assume, suffer to exist, guarantee or otherwise become or remain, directly or indirectly, liable with respect to any indebtedness, except for under the TLSA and any pre-existing indebtedness; (2) create a valid and perfected lien on or security interest in the collateral; (3) enter into any merger, consolidation or reorganization, or reclassify its stock or suffer a change of control; (4) liquidate, wind up or dissolve itself; (5) sell, dispose, transfer, assign, pledge, license, lease, convey or hypothecate any of the collateral; (6) change its name or business; (7) prepay, redeem, defease, purchase or otherwise any acquire any of its indebtedness; or (8) enter into certain transactions with its affiliates or change its accounting methods. The restrictions of these covenants are subject to certain exceptions specified in the TLSA and in some cases may be waived by written consent of Revere. Any failure to comply with the affirmative covenants or restrictive covenants outlined in the TLSA without waiver by Revere or certain other provisions in the TLSA is an event of default, pursuant to which Revere may accelerate the repayment of the loan.

The Company utilized approximately $1.45 million of the proceeds of the Notes to pay off loan obligations owed to Santander Bank, N.A. plus breakage fees on a related interest swap of approximately $220,000 under a previous the Loan Agreement with Santander Bank, N.A. The remaining proceeds of the Notes were retained by the Company to be used for general corporate purposes.

 

Second Quarter 2014 Financial Results

• Sales decreased 12% or $0.6 million to $4.6 millionfrom $5.2 million in the year-ago period and decreased $1.7 million or 27% sequentially, from $6.2 million in the first fiscal quarter of 2015.
• Net loss was $(0.6) million or ($0.03) per basic and fully diluted share for the quarter endedSeptember 30, 2014 as compared to a net loss of ($0.8) million or ($0.04) per basic and fully diluted share for the quarter ended September 30, 2013.

"While our sales volume during the second quarter remained low relative to Ranor's capacity, reported gross margin improved over last year's second quarter and the first quarter of this year. The path forward is clear in our plan to return Ranor to profitability with disciplined and sustainable actions already underway," commented Mr. Shen. "A sharp focus on right-sizing costs and top line growth is now in place. My personal contact with customers continues on a daily basis and we are aggressively pursuing new opportunities as well as declining opportunities which do not present a good fit for Ranor. Improved customer diversification and new opportunities are key elements in the developing strategy and tactics being implemented to drive a recovery plan at Ranor. Our aerospace related customers have strong demand and it appears that will be sustained for the near term. Key defense and aerospace customers continue to source Ranor for their most demanding outsourcing needs and they have embraced requested changes that enhance cash flow and help stabilize our turnaround effort. The engagement and collaboration I have witnessed from our key customers, since arriving at Ranor in late June, demonstrates our customers' need for Ranor to be a stable and viable player within their supply chain so they can achieve their strategic outsourcing goals. Ranor continues to see near and long-term opportunities that fit our manufacturing model. Our goal is to effectively capture these opportunities, execute on our manufacturing agreements, and maintain a reasonable cost structure. I believe we are making good progress against these objectives and we will remain focused on continuous improvement moving forward."

"The gross margin we are reporting for this second quarter demonstrates an improvement over last year as certain contract losses have now been curtailed at Ranor," continued Mr. Shen. "Going forward, we are tasking the Ranor team to target customer orders in a volume that efficiently utilizes the production capacity at Ranor, with gross and operating margins that facilitate a return to bottom line profitability. I also expect that certain initiatives we have in place to 'do it right the first time' will continue to improve operational efficiency and utilization, reducing unplanned overtime, resulting in sustained cost reductions and efficiency gains beyond Q2."

As previously disclosed, GT Advanced Technology's ("GTAT") chapter 11 bankruptcy filing, onOctober 6, 2014, has had the effect of placing a stay on the Company's arbitration previously commenced with GTAT and the arbitration claim will now track through the bankruptcy proceeding as an unsecured creditor claim. While the outcome of the claim within the overall bankruptcy cannot be predicted at this point, the bankruptcy process will move more slowly than the arbitration process underway prior to October 6^th. Accordingly, management is taking steps to assure the Company's liquidity and support a return to profitability.

Mr. Shen also stated, "Our efforts to refinance Ranor's real estate and secure additional working capital continue. Our goal is to build a stable capital structure and put the Company on a firm financial foundation to achieve recurring top and bottom line growth."

Item 8.01 Other Events.

On October 6, 2014, GT Advanced Technologies, Inc. (“GTAT”), together with certain of its direct and indirect subsidiaries, commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire. GTAT’s bankruptcy filing causes an automatic stay in any arbitration proceedings in which GTAT is involved, including the arbitration proceeding with Ranor, Inc., a subsidiary of TechPrecision Corporation (the “Company”) previously described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014 and the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2014, filed with the Securities and Exchange Commission on July 15, 2014 and August 18, 2014, respectively (the “Ranor Arbitration”). The automatic stay results in the American Arbitration Association suspending administration of the Ranor Arbitration and the Company’s claim in the Ranor Arbitration (the “Ranor Claim”) is now considered an unsecured creditor claim within GTAT’s overall bankruptcy proceedings.

While any payments to the Company as a result of the Ranor Claim were not certain prior to the GTAT bankruptcy, as a result of the GTAT bankruptcy, the timing of any determination in the Ranor Arbitration is uncertain and there is a significant risk that even if the Ranor Arbitration is settled or decided in favor of the Company, GTAT will not have the ability to make any award payments to the Company. In light of such uncertainty, the Company is continuing to explore various financing alternatives to enhance the Company’s financial position and ensure the Company’s continued liquidity.

TECHPRECISION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)

Management Discussion and Analysis

Net Sales

The following increases and decreases in net sales reflect an irregular order flow from our customers as they measure their demand for new and existing products. For the three months ended June 30, 2014, net sales decreased by $0.9 million, or 12%, to $6.2 million.  Net Sales in or naval/maritime group increased by $0.6 million on increased shipments of components to our largest customer.  Net sales in our energy group decreased by $1.2 million as shipments of isotope transport casks were delayed. Net Sales in our precision industrial group decreased by $0.3 million as lower sales for pressure vessels more than offset an increase in net sales of medical components and production furnaces. Sales of production furnaces increased significantly as Ranor made shipments as required under a certain customer purchase agreement from the U.S. and from our WCMC subsidiary in China. That same customer has indicated a desire to reduce the number of units ordered under the contract and we have filed a demand for arbitration under the terms of the agreement. Future manufacturing activities and shipments under this contract are at risk.

Net Loss
 
As a result of the foregoing, our net loss was $1.3 million, or $0.05 per share basic and fully diluted, for the three months ended June 30, 2014, as compared to net loss of $1.4 million, or $0.07 per share basic and fully diluted, for the three months ended June 30, 2013.
 

Item 1.01 Entry into a Material Definitive Agreement

As the Company previously disclosed in Current Reports on Form 8-K dated January 23, April 1 and June 4, 2014, the Company and Ranor, were parties to: (i) a Forbearance and Modification Agreement with Santander Bank, N.A. (formerly Sovereign Bank) (the “Bank”) dated January 16, 2014 (the “First Forbearance Agreement”) and (ii) a Forbearance and Modification Agreement with the Bank dated May 30, 2014 (the “Second Forbearance Agreement”), each in connection with the Loan and Security Agreement, dated as of February 24, 2006, between Ranor and Sovereign Bank, as supplemented and amended (the “Loan Agreement”). Under the First Forbearance Agreement, the Bank agreed to forbear from exercising certain of its rights and remedies arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement until March 31, 2014. On March 31, 2014, the First Forbearance Agreement terminated pursuant to its terms. Under the Second Forbearance Agreement, the Bank agreed to forbear from exercising certain of its rights and remedies arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement commencing retroactively on April 1, 2014 and extending until no later than June 30, 2014.

On July 1, 2014, the Company and the Bank entered into a new forbearance and modification agreement with the Bank (the “Third Forbearance Agreement”).  Under the Third Forbearance Agreement, the Bank has agreed to forbear from exercising certain of its rights and remedies (but not waive such rights and remedies) arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement commencing on July 1, 2014 and extending until no later than July 31, 2014 (the “Forbearance Period”).

The Loan Agreement consists of a secured term loan of $4.0 million, a revolving line of credit of $2.0 million and a capital expenditure line of credit facility of $3.0 million. Additionally, the Bank extended to the Company a loan facility in the amount of up to $1.9 million for the purpose of acquiring a gantry mill machine. In connection with the $6.2 million tax exempt bond financing with the Massachusetts Development Finance Authority (the “MDFA”) in 2010, the MDFA sold to the Bank MDFA Revenue Bonds, Ranor Issue, Series 2010A in the original aggregate principal amount of $4.25 million (the “Series A Bonds”) and MDFA Revenue Bonds, Ranor Issue, Series 2010B in the original aggregate principal amount of $1.95 million (the “Series B Bonds”), the proceeds of which were loaned to the Company under the terms of a Mortgage Loan and Security Agreement, dated as of December 1, 2010, by and among the Company, MDFA and the Bank (as bond owner and Disbursing Agent).

In consideration for the granting of the Forbearance Agreement, the Company agreed to: (1) pay a forbearance fee of $30,000 (originally required by the Second Forebearance Agreement), which shall be paid on the earlier of (x) payment of the obligations under the Loan Agreement and the Third Forbearance Agreement or (y) the Forbearance Termination Date (as defined in the Third Forbearance Agreement); (2) pay the installment of principal and interest on the Series A Bonds and Series B Bonds on July 1, 2014 in the amount of $22,344.26; (3) pay an interest rate per annum on the Series A Bonds and Series B Bonds commencing on July 1, 2014 to 65% of the sum of one month Libor plus 5.75% and a further increase to 65% of the sum of one month Libor plus 15%; (4) pay the full amount of the outstanding indebtedness under the Loan Agreement at the end of the Forbearance Period; and (5) pay any and all costs and expenses of the Bank in connection with the Forbearance Agreement and any and all costs and expenses incurred in connection with the credit extended by the Bank or the preservation or enforcement of any rights of the Bank under the Forbearance Agreement or the Loan Agreement.

During the Forbearance Period, the Obligors agree to comply and all the terms, covenants and provisions in the Loan Agreement and related documents.

Item 1.01 Entry into a Material Definitive Agreement

Equipment Financing Facility

On May 30, 2014, TechPrecision Corporation (the “Company”), through its wholly owned subsidiary, Ranor, Inc. (“Ranor”), entered into a Loan and Security Agreement (the “LSA”) with Utica Leasco, LLC (“Utica”). Pursuant to the LSA, Utica agreed to loan $4.15 million to Ranor under a Credit Loan Note (the “Note”), which is collateralized by a first secured interest in certain machinery and equipment at Ranor. Payments under the LSA and Note are due in monthly installments with an interest rate on the unpaid principal balance of the Note equal to 7.5% plus the greater of 3.3% and the six-month LIBOR interest rate, as described in the Note. Ranor’s obligations under the LSA and Note are guaranteed by the Company.

Pursuant to the LSA, Ranor is subject to certain restrictive covenants which, among other things, restrict Ranor’s ability to (1) declare or pay any dividend or other distribution on its equity, purchase or retire any of its equity, or alter its capital structure; (2) make any loan or guaranty or assume any obligation or liability; (3) default in payment of any debt in excess of $5,000 to any person; (4) sell any of the collateral outside the normal course of business or (5) enter into any transaction that would materially or adversely affect the collateral or Ranor’s ability to repay the obligations under the LSA and Note. The restrictions of these covenants are subject to certain exceptions specified in the LSA and in some cases may be waived by written consent of Utica. Any failure to comply with the restrictive covenants outlined in the LSA without waiver by Utica or certain other provisions in the LSA is an event of default, pursuant to which Utica may accelerate the repayment of the loan.

In connection with the execution of the LSA, the Company paid approximately $0.24 million in fees and associated costs and utilized approximately $2.65 million to pay off debt obligations owed to the Bank under the Loan Agreement described below. Additionally, the Company retained approximately $1.27 million for general corporate purposes.

The descriptions of the LSA and Note are qualified in their entirety by reference to the full text of the Loan Agreement and Note, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated by reference herein.

Forbearance and Modification Agreement

As the Company previously disclosed in Current Reports on Form 8-K dated January 23 and April 1, 2014, the Company and Ranor, were parties to a Forbearance and Modification Agreement with Santander Bank, N.A. (formerly Sovereign Bank) (the “Bank”) dated January 16, 2014 in connection with the Loan and Security Agreement, dated as of February 24, 2006, between Ranor and Sovereign Bank, as supplemented and amended (the “Loan Agreement”). Under the forbearance and modification agreement, the Bank agreed to forbear from exercising certain of its rights and remedies arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement until March 31, 2014. On March 31, 2014, the forbearance and modification agreement terminated pursuant to its terms.

On May 30, 2014, the Company and the Bank entered into a new forbearance and modification agreement with the Bank (the “Forbearance Agreement”). Under the Forbearance Agreement, the Bank has agreed to forbear from exercising certain of its rights and remedies arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement commencing retroactively on April 1, 2014 and extending until no later than June 30, 2014 (the “Forbearance Period”).

The Loan Agreement consists of a secured term loan of $4.0 million, a revolving line of credit of $2.0 million and a capital expenditure line of credit facility of $3.0 million. Additionally, the Bank extended to the Company a loan facility in the amount of up to $1.9 million for the purpose of acquiring a gantry mill machine. In connection with the $6.2 million tax exempt bond financing with the Massachusetts Development Finance Authority (the “MDFA”) in 2010, the MDFA sold to the Bank MDFA Revenue Bonds, Ranor Issue, Series 2010A in the original aggregate principal amount of $4.25 million (the “Series A Bonds”) and MDFA Revenue Bonds, Ranor Issue, Series 2010B in the original aggregate principal amount of $1.95 million (the “Series B Bonds”), the proceeds of which were loaned to the Company under the terms of a Mortgage Loan and Security Agreement, dated as of December 1, 2010, by and among the Company, MDFA and the Bank (as bond owner and Disbursing Agent).
 
As disclosed in the Company’s Annual Report on Form 10-K for the year ended March 31, 2013 and Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2013, September 30, 2013 and December 31, 2013, the Company was not in compliance with certain financial covenants under the Loan Agreement, specifically the fixed charges and interest coverage covenants, and the Bank had not waived such non-compliance.

In consideration for the granting of the Forbearance Agreement, the Company agreed to: (1) pay a forbearance fee of $30,000, half of which will be waived if all obligations under the Loan Agreement are satisfied by June 15, 2014; (2) pay an increased interest rate on the Series A Bonds and Series B Bonds commencing on June 1, 2014 to 65% of the sum of one month Libor plus 5.75% and a further increase to 65% of the sum of one month Libor plus 15% after the end of the Forbearance Period; (3) pay the full amount of the outstanding indebtedness under the Loan Agreement at the end of the Forbearance Period; and (4) pay any and all costs and expenses of the Bank in connection with the Forbearance Agreement and any and all costs and expenses incurred in connection with the credit extended by the Bank or the preservation or enforcement of any rights of the Bank under the Forbearance Agreement or the Loan Agreement.

During the Forbearance Period, the Obligors agree to comply with all the terms, covenants and provisions in the Loan Agreement and related documents. The Forbearance Agreement amends the Loan Agreement to, among other things, prohibit the Company’s Leverage Ratio (as such term is defined in the Loan Agreement) to be greater than 1.75 to 1.0. In addition, the Bank agreed to subordinate its security interest in the Company’s machinery and equipment and the related patent and licensing agreement to the security interest granted to Utica, conditioned upon the Company satisfying certain conditions including the repayment of $2.65 million under the Loan Agreement.

Upon the completion of transactions contemplated under the LSA and Note, described above, on May 30, 2014, the Company immediately repaid the Bank the $2.65 million due to it under the Loan Agreement and remained obligated to the Bank for approximately $1.75 million under the Series A Bonds. The Company continues to pursue potential alternative financing sources to secure a new financing arrangement to, among other things, repay all amounts that remain outstanding under the Series A Bonds.

Item 8.01 Other Events.

As TechPrecision Corporation (the “Company”) previously disclosed in a Current Report on Form 8-K dated January 23, 2014, the Company and its wholly owned subsidiary, Ranor, Inc., are parties to a Forbearance and Modification Agreement with Santander Bank, N.A. (formerly Sovereign Bank) (the “Bank”) dated January 16, 2014 (the “Forbearance Agreement”) in connection with the Loan and Security Agreement, dated as of February 24, 2006, between Ranor, Inc. and Sovereign Bank, as supplemented and amended (the “Loan Agreement”). Under the Forbearance Agreement, the Bank agreed to forbear from exercising certain of its rights and remedies arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement until March 31, 2014 (the “Forbearance Period”).

On March 31, 2014, the Forbearance Period expired and the Forbearance Agreement terminated pursuant to its terms. The Company has requested, and the Bank is considering, an extension of the Forbearance Period. In addition, the Company continues to engage in discussions with potential alternative financing sources to secure a new financing arrangement to, among other things, replace the financing provided by the Loan Agreement and repay all amounts that remain outstanding under the Loan Agreement.

Third Quarter 2014 Financial Results

• Third quarter fiscal 2014 sales were $5.2 million, reflecting a decrease of 29% from $7.3 million reported for the third quarter last year and essentially flat compared sequentially to the second fiscal quarter.
• Net loss for the third quarter of fiscal 2014 was ($0.8) million compared to a net loss of approximately ($0.5) million in third quarter of last year  and unchanged compared sequentially to the second  fiscal quarter.

Leonard Anthony, TechPrecision's Executive Chairman, commented, “In December, we announced that Mevion Systems' innovative proton beam device initiated first patient treatment at the Siteman Cancer Center in St. Louis. We expect that this important clinical milestone will result in  TechPrecision receiving higher order volumes from Mevion Systems during fiscal 2015 and beyond as Mevion and its customers move forward with the completion of 10 additional proton centers under development as well as other orders Mevion has within its backlog. As we progress through our fourth quarter of fiscal 2014 and first quarter of fiscal 2015, we anticipate achieving greater production volumes at our Ranor facility which, coupled with our aggressive cost control initiatives, should facilitate the Company's return to profitability. Ramping our Ranor division to higher production levels and refinancing our existing credit facilities are essential near term catalysts for positioning the Company for stability and profitability in fiscal 2015 and beyond.”

Item 1.01

Entry into a Material Definitive Agreement

Item 1.01

Entry into a Material Definitive Agreement

CENTER VALLEY, Pa., Nov. 14, 2013 /PRNewswire/ -- TechPrecision Corporation (OTC Bulletin Board: TPCS) ("TechPrecision" or "the Company"), an industry leading global manufacturer of precision, large-scale fabricated and machined metal components and tested systems with customers in the alternative energy, medical, nuclear, defense, aerospace and other commercial industries, today announced that it has executed a purchase agreement with an existing customer, to produce sapphire chambers at its Ranor facility in Massachusetts.

The $8.1 million agreement calls for a fixed number of Sapphire chambers to be delivered by the end of May, 2014. These chambers are expected to be used in a new manufacturing facility TechPrecision's customer is opening as part of a collaboration with Apple, Inc. That plant, located in the Phoenix (Ariz.) suburb of Mesa, will provide material for iPhone components, including cameras and fingerprint reading sensors.

"This purchase agreement provides us the opportunity to produce chambers we have experience manufacturing, for a customer we know well," commented Bob Francis, President and General Manager of TechPrecision's Ranor Division. "TechPrecision has already produced more than 1,100 high temperature vacuum chambers for the solar and sapphire markets. This production volume order will help utilize existing capacity at Ranor, providing revenue and profit margin as other projects in our pipeline move toward volume production levels."

Second Quarter 2014 Financial Results

• Revenues were $5.2 million, reflecting a decrease of $2.9 million or 36% from $8.1 million reported for the second quarter last year
• Net loss per share (diluted) was $ (0.04) vs. last years $ (0.00)

"This was a challenging quarter for us, as legacy issues continued to impact our operations, customer order mix and our financial results," commented Len Anthony, TechPrecision's Executive Chairman. "Our entire management team is working to put these legacy issues and associated contract losses behind us. We remain upbeat about the potential inherent opportunities in each of the verticals we serve, and quotation activity remains high. We are optimistic that we will eliminate the drag on earnings from contract losses in the near term, and see more normalized production volumes and margins as we move into calendar 2014. Subsequent to the end of the quarter, we received an $8.1 million purchase order for volume production of sapphire chambers for an existing customer, and this order will help fill existing capacity at our Ranor facility."

"Our cost reduction initiatives are already producing results," continued Mr. Anthony. "Sequentially, SG&A expenses decreased 16%. We continue to target profitability by the end of the fiscal year, positioning us for a significantly improved fiscal 2015."

First Fiscal Quarter 2014 Financial Results

• Net sales were $7.1 million comparable with $7.1 million in the year-ago quarter
• Net loss per share Basic and Diluted was $(0.07) vs last years quarter of $(0.04)

"We continue to focus our immediate efforts on reducing our expenses to align our current cost structure with current and expected revenue levels toward the goal of returning to profitability in fiscal 2014," commented Leonard Anthony, Chairman of the Board of Directors and Principal Executive Officer. "We are on track with our goal to reduce $2.0 million to $2.5 million in annualized expenses on a run-rate basis and are encouraged that our backlog continues to increase, expanding from $16.4 million at March 31 of 2013 to$19.4 million as of June 30, 2013. In addition, we continue to seek to replace or otherwise refinance our debt to align more closely with the business model that we are executing. I am confident that our near-term initiatives for stabilizing the business and the significant market opportunities we see going forward will yield the long-term results for growth and profitability that will create sustainable value for our shareholders."

CENTER VALLEY, Pa., May 13, 2013 /PRNewswire/ -- TechPrecision Corporation (OTC Bulletin Board: TPCS) ("TechPrecision" or the "Company"), an industry leading global manufacturer of precision, large-scale fabricated and machined metal components and tested systems with customers in the alternative energy, cleantech, medical, nuclear, defense, aerospace and other commercial industries, reported today that James Molinaro , the Company's Chief Executive Officer, informed the Company's board of directors that he has decided to resign from all positions he holds with the Company, including the positions of Chief Executive Officer and director, to pursue other opportunities.  Such resignation shall be effective as of the close of business on May 13, 2013.

The Company's board of directors has given Leonard Anthony , the current chairman of the board of directors, the responsibilities of the Company's principal executive officer, making him the Company's Executive Chairman while the Company undertakes a search to find a permanent Chief Executive Officer.  The Company is also discussing with Mr. Molinaro ways in which he and the Company can work together during this transition.

"I want to thank the teams at TechPrecision, Ranor and WCMC for all their support as we undertook a focused transition to multiple strategic products and customers; I wish the entire team much success," said Mr. Molinaro. Leonard Anthony expressed his gratitude to Jim for his years of service and looks forward to his new role as Executive Chairman until a permanent Chief Executive Officer is hired. 

CENTER VALLEY, P.a., Feb. 26, 2013 /PRNewswire/ -- TechPrecision Corporation (OTC Bulletin Board: TPCS) ("TechPrecision" or "the Company"), an industry leading manufacturer providing engineering, precision large-scale machined, fabricated metal and electrical components or complete tested systems with customers in the alternative energy, cleantech, medical, nuclear, defense,aerospace and other commercial industries, today announced that it has received an order, valued at approximately $860,000, to produce nuclear components for a customer in South Korea.

TechPrecision's Ranor division is one of the few N-Stamp precision manufacturing companies certified to machine, fabricate and test large scale nuclear assemblies. The order is scheduled to be delivered to the customer in South Korea in Q3 FY2014 (December of 2013).

"This order demonstrates our accelerating traction in the global nuclear industry and the success of our diversification strategy," said Mr. James Molinaro , CEO of TechPrecision Corporation. "Ranor is well recognized in the industry for understanding the extreme environments and demands placed on high-precision nuclear products as we have been fabricating critical, large-scale components that cover the complete life cycle of nuclear power for well over 50 years. Ranor is one of the  few N-Stamp certified precision manufacturing companies in North America, creating a significant competitive advantage."

First Quarter 2013 Results

• Net sales were $7.1 million compared to $9.2 million in the year-ago quarter, a 28% decrease and compared sequentially to $6.1 million in the fourth quarter of fiscal 2012, an 18% increase
• Net loss for the quarter ended June 30, 2012 was ($0.7) million or ($0.04) per basic and diluted share as compared to net income of $0.4 million or $0.02 per share basic and $0.01 per share diluted in the year ago first quarter and compared sequentially with a net loss of ($1.3) million or ($0.07) per basic and fully diluted share in the fourth quarter of fiscal 2012

Subsequent to the end of the quarter, we achieved a positive book-to-bill dynamic involving $4.3 million in additional orders bolstering our backlog and driving it to the highest level in the past five quarters," commented James S. Molinaro, CEO of TechPrecision." As we continue through fiscal 2013, we expect to significantly grow revenues and return to profitability, as we have completed the Ranor transition and are focused on profitable growth. In addition, our WCMC subsidiary is ramping volume production with its subcontractors starting in Q2 of fiscal 2013. The end result of these parallel initiatives will yield a profitable company with two growth platforms and a more diverse customer base that encompasses a wide range of industries. Already, WCMC has commenced production volume shipments of the sapphire product, which should benefit consolidated results, beginning in the second quarter."

On July 6, 2012, TechPrecision Corporation (the “Company”), through its wholly owned subsidiary, Ranor, Inc. (“Ranor”) executed an Eleventh Amendment (the “Amendment”) to the Loan and Security Agreement, dated February 24, 2006, between Sovereign Bank (the “Bank”) and Ranor (as so amended, the “Loan Agreement”).

Under the Amendment, the Company’s failure to comply with financial covenants related to the fixed charge coverage ratio and the interest coverage ratio (collectively referred to herein as the “Coverage Ratio Covenants”) for the fiscal quarter ended March 31, 2012 was waived by the Bank and the Bank waived the need to comply with the Coverage Ratio Covenants for the fiscal quarters ending June 30, 2012 and September 30, 2012. The Company will now be expected to be in compliance with all financial covenants starting with the fiscal quarter ending December 31, 2012. The requirements and testing periods of the Coverage Ratio Covenants will be modified upon resumption of the Company’s need to comply with such covenants at December 31, 2012.

Center Valley, PA – June 29, 2012 – TechPrecision Corporation (OTC Bulletin Board: TPCS) (“TechPrecision” or “the Company”), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and systems with customers in the alternative energy, cleantech, medical, nuclear, defense, aerospace and other commercial industries, today announced that it has agreed to terms effectively amending debt covenants for the period March 31, 2012 through June 30, 2013 and also extending its $2 million credit line through January 31, 2013. The latter was due to expire on July 31, 2012. Management believes the new terms are improved and favorable to the Company, when compared to previous terms. The Company expects to execute the amendment in the next few days and following such execution, the terms of the amendment will be described in a report filed with the Securities and Exchange Commission, within the time frame allowed for such a report.

On June 19, 2012, Techprecision Corporation (the “Company”) hosted a meeting with investors regarding its business.

Third Quarter 2011 Results

• For the three months ended December 31, 2011, sales increased 12%, or $1.2 million to $10.9 from $9.7 million in the year-ago period and increased $3.8 million or 52% sequentially from $7.1 million in the second quarter of fiscal 2012
• Net loss was $1.1 million, or ($0.07) per share basic and fully diluted compared to net income of $829,126, or $0.06 per share basic and $0.04 per share diluted for the quarter ended December 31, 2010.

"We continue to make progress in our efforts to expand TechPrecision's operations, and this progress is demonstrated by the favorable financial contribution from our WCMC facility," said Mr. James Molinaro, CEO of TechPrecision Corporation. "WCMC exceeded our expectations by qualifying five product lines for four customers, while also contributing 29% of the consolidated third quarter revenue and delivering positive net margin.  We are disappointed with the revenue and profitability contribution from our Ranor subsidiary. However, as we have stated before, Ranor is re-purposing its capacity after its largest customer moved production to Asia. This impacted over 50% of Ranor's historical revenue base and resulted in Ranor now having to develop new products which to date, have suffered from first article and prototype development costs and associated lower gross margins.  In addition, a decision was made to prioritize an important project that was critical to one of our key customers. While there were short-term adverse impacts to our bottom-line, we believe the long-term benefit of supporting this customer is key to Ranor's future."

Business Outlook

"We expect to grow revenues on a sequential basis during the fourth quarter and return to profitability on a consolidated basis," concluded Mr. Molinaro. "I would reiterate that, as occurred in the third quarter, the shift of a large single-order could impact our actual results. As we continue to increase revenues, a single-order event will be less impactful to a quarter and our financial results."

"I am excited to have added Bob Francis, a proven executive with multi-site operational experience, as Ranor's new president and general manager, and I am confident Bob will quickly implement improvements to Ranor's business model," added Mr. Molinaro. "Bob is focused on increasing Ranor's manufacturing efficiency, enabling us to fully utilize our capacity and unique capabilities so we can deliver growth and profitability. Coupled with WCMC, which is now qualified to manufacture five different product lines, we are positioned to quickly return to profitability and growth in Q4."

TechPrecision's backlog at the end of the third quarter of fiscal 2012 totaled $19.3 million compared with a backlog of $29.9 million at September 30, 2011 and $27.2 million at December 31, 2010.  On January 14, 2012, the Company received an additional purchase order for $4.8 million to produce poly silicon chambers in the U.S..  On February 11, 2012 the Company entered into a purchase agreement with a key alternative energy customer that contemplates $9.5 million in purchase orders to produce sapphire LED furnaces, in China, beginning in March 1, 2012 and continuing through February 28, 2013.

CENTER VALLEY, Pa., Jan. 12, 2012 /PRNewswire/ -- TechPrecision Corporation (OTC Bulletin Board: TPCS) ("TechPrecision", or "the Company"), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and systems with customers in the alternative energy, cleantech, medicall, nuclear, defense, aerospace and other commercial industries, today announced that its Ranor subsidiary has received initial orders for first articles of Poly Silicon chambers from an existing customer for $4.8 million, supporting an advanced PolySi technology for the solar market. The initial order is for prototype chambers to be shipped by September 2012 to qualify production. Based upon successful qualification, additional production orders are expected to be received and shipments expected in calendar 2012 and 2013.

"We are very pleased to receive this order, which provides an opportunity to expand with this Tier-1 customer in the PolySi market," said Mr. James Molinaro, CEO of TechPrecision Corporation. "This win further diversifies our presence in the solar industry, and reinforces our expertise with emerging solar technologies. This also utilizes capacity at our Ranor division, demonstrating our ability to backfill Ranor's backlog with additional leading-edge technology."

“The progress we made in 2011, adding several tier-1 customers in a variety of industries we believe can position us for accelerated revenue growth in fiscal 2013 (the period beginning April 1, 2012),” continued Mr. Molinaro. “Work for solar customers has the potential to deliver $15-20 million in revenue in our next fiscal year while sapphire production, which is incremental to our current business, has the potential to generate and addition $12 to $18 million in revenue. In addition, we have the opportunity for $12 to $15 million in defense and aerospace business, $8 to $12 million in revenue for nuclear projects, $4 to $8 million from commercial/industrial business and $5 to $6 million in medical-related revenue. These ranges are based on estimates from customers and are subject to change, both in terms of size and timing, as we complete the prototyping and qualification process, with the expectation of volume orders during fiscal 2013. In aggregate, we believe we have positioned the Company for accelerated growth with increased diversification, giving our business more sustainability.”

CENTER VALLEY, Pa., Nov. 14, 2011 /PRNewswire/

To our Shareholders:

As most of you know, the solar and sapphire industries have been in a state of flux in recent weeks, as some of the larger manufacturers have adjusted their outlook. The assumption was that this has negatively impacted TechPrecision's business, and I have received several questions to that effect from concerned shareholders.

As I explained to those shareholders, it is my belief that TechPrecision's opportunities, both medium and long-term, have never been better, especially for our China operations for the solar and sapphire markets.

I remain optimistic that the efforts we undertook in the last eight months will position TechPrecision to capture a larger share of the market, and that, even as the markets contract, we will experience an increase in alternative energy volumes. This is due in part to the speed with which we brought our Wuxi Critical Mechanical Components Co., Ltd., or WCMC, subsidiary online. Our customers have stated that they intend to move manufacturing closer to their end customers, and that their subcontractors will need to provide services in Asia as well. As prices paid for end products in the solar and sapphire markets continue to drop worldwide, producers must identify and source lower cost production alternatives, and WCMC is uniquely positioned to serve this need as one of the few entities that can provide both superior quality and competitive pricing. More than 90% of poly silicon solar panels and many new nuclear reactors are scheduled to be built in China. This presents a significant opportunity for us, and production at the WCMC facility is progressing according to plan as we finalize our production supply chain in China.

Currently, we are producing multi-crystalline, mono-crystalline and sapphire chambers at our WCMC facility. New and current customers have provided us forecasts for both solar and sapphire production in the coming quarters. We have already added four customers at WCMC, and multiple other customers have indicated an interest in expanding business with TechPrecision and our WCMC division in Asia for the nuclear and medical markets.

The transition of solar manufacturing from TechPrecision's Ranor facility in Massachusetts to WCMC in China has given us the chance to add non-solar business to our domestic operations. We are working very hard to backfill the business at Ranor, initially with defense-related and commercial industrial work, and longer-term with large-scale nuclear-related projects. Essentially, 60% of Ranor's revenues have shifted to China, and a key goal for management is to replace this revenue as quickly as possible with predictable and profitable business. This will take some time, but we are excited about the possible opportunities.

The recent tragedies in Japan have bolstered demand for advanced-passive reactors. Over the next 10 years, 16 plants are scheduled to be built in China, six in the United States and five in Europe (including three in the United Kingdom). Because Ranor is one of the few facilities left in the United States that can produce the required components for these plants, this pipeline of new nuclear projects creates a significant opportunity for us. This established pipeline of new nuclear projects creates a significant opportunity for us, including $6-10 million in potential revenue to TechPrecision for each reactor prime component.

TechPrecision should not be viewed as a company reliant on one large customer as we have taken significant steps to diversify our business in three important ways:

• We have diversified our exposure to the solar industry, adding new customers and broadening our participation into areas like mono-crystalline, HEM sapphire and MOCVD (metal oxide chemical vapor deposition);
• We have diversified our solar operations geographically, shifting production to China to strategically position us closer to our customers and their end-users; and
• We have diversified our overall operations beyond solar, increasing our participation in less-cyclical industries like defense, aerospace, industrial gas and nuclear primary components.

We believe TechPrecision has positioned itself to grow by solidifying our reputation for quality in a variety of expanding industries and verticals. I remain optimistic about our intermediate and long-term business opportunities, and the improving diversification of our business.

I look forward to elaborating on these opportunities during our next quarterly conference call.

Sincerely,

James Molinaro, CEO

First Quarter 2012 Highlights

• Net sales were up 49% to $9.2 million compared to $6.2 million in the year-ago quarter and were up 14% sequentially compared to $8.1 million in the fourth fiscal quarter of 2011.
• Net income in the first quarter was $0.4 million or $0.02 per basic and $0.01 per fully diluted share compared to net income of $0.8 million or $0.06 per share basic and $0.04 per share fully diluted share in the prior year quarter.

"We are currently ramping production capacity to achieve targeted volumes for our solar and sapphire customers from our WCMC subsidiary in China," added Mr. Molinaro. "Late in our prior fiscal year and during our fiscal first quarter of 2012, we invested significantly to prepare our WCMC subsidiary for expected growth. As a result, from an operating expense perspective, we incurred operating costs for WCMC in the fiscal first quarter of 2012 with little revenue contribution. We expect this investment to yield meaningful near-term returns as we ramp to targeted production volumes at WCMC and expect this subsidiary will provide the foundation from which we will support our customers' growth needs in Asia. This has been a transition quarter as we shift from our historic single site configuration to a two-site international platform. With that shift, we are incurring most of the expenses associated with added capacity and capability one quarter ahead of the revenue benefits WCMC will generate. We expect to achieve significant top and bottom line benefit from this ramp up beginning in the fiscal second quarter of 2012."

CENTER VALLEY, Pa., Aug. 2, 2011 /PRNewswire/ -- TechPrecision Corporation (OTC Bulletin Board: TPCS) ("TechPrecision", or "the Company"), an industry leading manufacturer of precision, large-scale fabricated and machined metal components and systems with customers in the alternative energy, cleantech, medical, nuclear, defense, aerospace and other commercial industries, today announced that it has received orders for more than $4 million in new contracts from existing defense industry customers. These orders will ship during the next 12 months.

"We continue to benefit from a more strategic approach, partnering with new and existing customers to support their roadmaps and requirements, and these orders reflect our continuing success," commented James Molinaro, CEO of TechPrecision Corporation. "In addition, we recently qualified our manufacturing facility in Massachusetts to perform a broader spectrum of work for key defense customers. These qualifications serve to expand and diversify our opportunities for new and follow-on business in the defense sector. Our focus, corporate-wide, is on diversifying and growing our revenues, and these orders further prove that we are achieving those goals."

Mr. Molinaro continued, "We also look forward to bringing our new gantry mill on-line later this year, which will enable us to provide solutions for the defense sector on an even larger scale than our current tool set."

CENTER VALLEY, Pa., July 7, 2011 /PRNewswire/ -- TechPrecision Corporation (OTC Bulletin Board: TPCS) ("TechPrecision", or "the Company"), an industry leading global manufacturer of precision large-scale, fabricated and machined metal components and systems with customers in the alternative energy, cleantech, medical, nuclear, defense, aerospace and other commercial industries, today announced that it has received an order for Advanced Generation III (passive safety) components from the nuclear division of a current customer valued at approximately $1.2 million. This order is expected to ship over the next nine months.

"As a direct result of our focused business development activity with key customers in new nuclear builds of advanced passive reactor components, this order reflects our continued successful expansion of opportunities in this key vertical," commentedJames Molinaro, CEO of TechPrecision Corporation. "Demand for the next generation of nuclear components is growing, and by expanding our sales pipeline and building on our ASME N-stamp quality performance with key customers, we are seeing a direct benefit – one we expect to position us well for expanded opportunities during the coming nuclear renaissance.

Fourth Quarter and Full Year 2011 Highlights

• For the year, net revenue increased 14% to $32.3 million, compared to $28.3 million last year
• Net income in the fourth quarter was $0.18 million, or $0.01 basic and $0.01 per diluted share, compared to net income of$0.64 million, or $0.05 basic and $0.03 per diluted share, in the prior year

"We are pleased with the overall results of Q4 and look forward to our investments in China providing top line and bottom line contribution in the coming quarters," added Mr. Molinaro. "During the fourth quarter, we accelerated investments to scale our operations and capabilities in China. We shipped units from our WCMC facility on March 30, 2011 that qualified WCMC to deliver higher volumes of production in fiscal 2012.  These initial units incurred substantial expediting fees on materials and the initial investment in process improvements required to meet rigorous customer acceptance testing.  The additional costs incurred to expedite materials and establish manufacturing processes served to lower our fourth quarter gross margin, by approximately 150 basis points, when compared to the quarter ended December 31, 2010.  We expect this investment to yield meaningful returns as we ramp to targeted production volumes at WCMC during the first half of fiscal 2012.  These investments to qualify our WCMC operations for production provide the foundation from which we will support our customers' growth needs in Asia."

 

CENTER VALLEY, Pa., April 12, 2011 /PRNewswire/ -- TechPrecision Corporation today announced that it has received an order with a value of approximately $1.5 million from an existing customer for advanced vacuum chambers used in the renewable energy market. These components will be manufactured by TechPrecision's U.S. based subsidiary, Ranor, Inc., and its China-based subsidiary, Wuxi Critical Mechanical Components Co., Ltd. The order is expected to ship by the end of second quarter of calendar 2011.

"One of the many consequences of the unfortunate and devastating events in Japan has been an increased global interest in the renewable energy industry," commented James Molinaro, CEO of TechPrecision Corporation. "The combined capabilities of our Wuxi Critical Mechanical Components Co., Ltd., and Ranor operations position us well to respond to the increasing short- and long-term production requirements of our customers. Recent analyst reports and global energy policy make it clear that the trend of increased renewable energy use will continue."

Third Quarter and Year-to-date Fiscal 2011 Highlights

• Revenue for the third quarter totaled $9.7 million an increase of 84% compared to $5.3 million during the Company's third quarter of fiscal 2010.
  
• During December, the Company purchased Ranor, Inc.'s manufacturing facility in Westminster, MA that was formerly leased from WM Realty and completed a tax-exempt financing with the Massachusetts Development Authority to finance the real estate purchase and a planned expansion of the Westminster, MA manufacturing site.

"We are very pleased with our third quarter results and especially the year-on-year improvement in revenue, backlog, cash generation and overall profitability," said Mr. James Molinaro, CEO of TechPrecision Corporation. "The 84% year-over-year revenue increase and the continued growth in our backlog demonstrate the progress we have made. Keys to continuing these positive trends are to achieve our goal of adding four new strategic Tier-1 customers and beginning solar equipment shipments from our China operations. In addition, we improved our capital structure and reduced operating expenses with the purchase of Ranor's manufacturing location in Westminster, Massachusetts and the receipt of $6.2 million in tax exempt bond financing through the Massachusetts Development Finance Authority to purchase the property and complete an 18,000 sq. ft. facility expansion in calendar year 2011."

"During and subsequent to the end of the quarter, our new subsidiary, Wuxi Critical Mechanical Components Co., Ltd., secured all necessary business licenses and shipped its first solar equipment," Mr. Molinaro continued. "This new subsidiary, which was formed, permitted and launched in record time, provides us with the ability to meet increasing demand for solar components in Asia, and China in particular. As a result, we now have a second growth platform for TechPrecision. This is the culmination of our strategy to perform sophisticated prototyping and initial manufacturing in the U.S., but to also provide manufacturing in lower-cost regions when our customers require it.

Business Outlook

"We continue to target year-over-year increases in our quarterly revenue, and we believe we can sustain profitability as we scale," Mr. Molinaro added. "We have made great progress in solidifying and expanding our relationship with our largest customer, and our new subsidiary will help us further penetrate the solar energy vertical. In addition, this operation prepares us to actively participate in the LED market, a rapidly growing opportunity with a large addressable market. We also maintain a goal of an approximate one-to-one book to bill ratio, creating additional longer-term revenue momentum to help us fully utilize our manufacturing capacity and ultimately creating value for shareholders."

GeoTeam® Note: We are looking into the potential dilution from outstanding convertible preferred stock. We have been tracking this stock since $1.14 and may take a position in TPCS once we receive clarification on the details of the preferred stock. Stay tuned.

WESTMINSTER, Mass., Feb. 2, 2011 /PRNewswire/ -- TechPrecision Corporation today announced that on February 1, 2011, after completing inspection, the Company's new Wuxi Critical Mechanical Components Co., Ltd. subsidiary shipped its first solar equipment.

Wuxi Critical Mechanical Components (WCMC) is meeting the immediate demand for local manufacture and machining of components for a large customer in the Solar Energy industry and growing demand from current and potential customers in the region. TechPrecision formed WCMC in October 2010 as a wholly foreign owned enterprise (WFOE) in consultation with a current TechPrecision customer based on the significant growth in demand for Solar Energy components in Asia and especiallyChina. Currently, 90% of the world's poly and mono silicon panels are scheduled to be built in China and similar demand for local manufacture of nuclear plants exists in China. WCMC enables TechPrecision to position its supply chain management closer to its customers, reducing trans-ocean shipment costs and accelerating lead times.

							Three months ended	Six months ended
		September 30,								September 30,
		2010				2009				2010				2009
Net sales		$	8,381,319			$	15,117,114			$	14,534,821			$	18,436,025
Cost of sales			5,795,971				12,471,343				9,633,682				15,225,452
Gross profit			2,585,348				2,645,771				4,901,139				3,210,573
Operating expenses:
Salaries and related expenses			506,582				331,302				906,593				724,669
Professional fees			167,094				110,411				344,744				186,623
Selling, general and administrative			447,735				226,573				888,018				524,994
Total operating expenses			1,121,411				668,286				2,139,355				1,436,286
Income from operations			1,463,937				1,977,485				2,761,784				1,774,287
Other income (expenses):
Other income			2,875				--				62,875				--
Interest expense			(110,450	)			(107,390	)			(218,016	)			(211,552	)
Interest income			3,869				5,184				6,602				8,370
Finance costs			(2,589	)			(4,257	)			(5,179	)			(8,513	)
Total other income (expense)			(106,295	)			(106,463	)			(153,718	)			(211,695	)
Income before income taxes			1,357,642				1,871,022				2,608,066				1,562,592
Provision for income taxes			502,014				550,388				933,116				366,703
Net income		$	855,628			$	1,320,634			$	1,674,950			$	1,195,889
Net income per share of common stock (basic)		$	0.06			$	0.09			$	0.12			$	0.09
Net income per share (fully diluted)		$	0.04			$	0.06			$	0.08			$	0.06
Weighted average number of shares outstanding (basic)			14,231,417				13,916,462				14,231,133				13,912,012
Weighted average number of shares outstanding (fully diluted)			20,568,037				21,300,150				20,757,412				19,930,238

"We have expanded our relationship with a large customer in the solar energy sector and established a relationship with a new tier 1 clean tech customer, and this progress is reflected in our improving financial results," said Mr. James Molinaro, CEO of TechPrecision Corporation. "Excluding the non-recurring inventory transfer, we increased revenue by more than 35% and maintained our backlog at approximately $25 million for the second consecutive quarter. We also signed an agreement with Powerline Inc., adding sales personnel to market our services in Eastern Pennsylvania, Delaware, Maryland, Eastern New York and New Jersey. We believe this initiative, coupled with our existing relationships with customers in expanding market verticals, will help us to more effectively utilize Ranor's capacity and leverage its high-precision fabrication and machining expertise."

"To meet increasing demand for solar components in Asia, and China in particular, and to create a second growth platform for TechPrecision, we launched a wholly owned subsidiary in Wuxi, China," Mr. Molinaro continued. "We are meeting the needs of our solar energy customer to source, fabricate and machine components in Asia, and this initiative resulted in a $2.9 million purchase order shortly after we launched the subsidiary. By adding this China-based capability to the TechPrecision organization, we will exploit synergies both in the U.S. and China to grow our revenue. This is the culmination of our strategy to perform the sophisticated prototyping and initial manufacturing in the U.S., but to also provide manufacturing in lower-cost regions when our customers require it."

Business Outlook

"We expect to continue to generate year-over-year increases in our quarterly revenue, excluding last year's one-time inventory transfer which impacted this quarter, and improve the overall fundamentals of our business," said Jim Molinaro, CEO of TechPrecision. "In the near-term, we are focused on scaling up our new venture in China, and assisting the sales representatives from Powerline in building out additional business. These two initiatives should help us to maintain an approximate one-to-one book to bill ratio, creating additional longer-term revenue momentum to help us fully utilize our manufacturing capacity and ultimately creating value for shareholders."

We believe that the $2.0 million revolving credit facility, which was renewed on July 30, 2010, and remained unused as of September 30, 2010; our capacity to access equipment-specific financing; our current cash balance of $9.2 million; and our cash flow from operations should be sufficient to enable us to satisfy our cash requirements at least through the end of fiscal 2011. Nevertheless, it is possible that we may require additional funds to the extent that we upgrade or expand our manufacturing facilities.

The securities purchase agreement pursuant to which we sold the Series A Convertible Preferred Stock to Barron Partners provides Barron Partners with a right of first refusal on future equity financings, which may affect our ability to raise funds from other sources if the need arises.

ChinaHybrid® Investors may want to track the TPCS ($1.04) story as the company enters China. Please note that TPCS's recent financial results have not been consistent.

Nov. 4, 2010

TechPrecision Corporation  announced that it is completing the formation of a wholly foreign owned enterprise (WFOE), Wuxi Critical Mechanical Components Co., Ltd., to meet the growing demand for local manufacture and machining of components for a large customer in the Solar Energy industry.

The formation of this WFOE was made in consultation with a current TechPrecision customer, and is based on the significant growth in demand for Solar and Nuclear Energy components in Asia, and especially China. This customer provided TechPrecision with a conditional $2.9 million in initial purchase orders for components, which will include materials transferred from Ranor to Wuxi Critical Mechanical Components Co., Ltd. to be machined in China and delivered to the customer. TechPrecision anticipates a significant increase in business with multiple customers as a result of this arrangement. The conditional order is based upon Wuxi Critical Mechanical Components Co., Ltd. producing an initial successful product by the end of the year