Financial Data and Key Metrics Changes - For the first quarter of fiscal 2026, consolidated revenue decreased by 8% to $7.4 million compared to $8 million in the same period of fiscal 2025 [4][9] - Consolidated gross profit increased by $800,000, reaching $1 million, resulting in a significant year-over-year gross margin improvement [4][9] - Consolidated SG&A expenses decreased by 6% to $1.5 million, primarily due to the absence of breakup fees from a terminated acquisition [9][10] - The net loss for the quarter was $600,000, or $0.06 per share, with total debt reduced to $5.7 million from $7.4 million [10][11] Business Line Data and Key Metrics Changes - Raynor's revenue for Q1 fiscal 2026 was $4.3 million with an operating profit of $1.5 million, showing strong margin growth despite a slight revenue decline [5][11] - STATCO's revenue was $3.3 million with an operating loss of $1.2 million, although it showed a $469,000 improvement in operating income year-over-year [5][12] - STATCO's gross profit margin improved by 14 percentage points, primarily due to better pricing and production efficiencies, despite ongoing challenges with legacy contracts [12] Market Data and Key Metrics Changes - The company reported a backlog of $50.1 million as of June 30, 2025, indicating strong customer confidence and new quoting opportunities in air defense and submarine defense sectors [7][14] - The company is focusing on building a strong recurring revenue customer base, which is reflected in the decrease in cost of revenue by 18% [9] Company Strategy and Development Direction - The company aims to secure and maintain enduring partnerships within the defense sector, focusing on custom manufacturing for naval and military applications [13][14] - Management is actively pursuing adjustments from clients and focusing on aggressive cash management to mitigate risks [6][10] - The company is looking to expand its revenue and profitability through strategic investments and operational improvements [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for revenue growth and profitability, citing a strong backlog and ongoing negotiations to improve contract terms [14][59] - The management acknowledged challenges with legacy contracts, particularly at STATCO, but emphasized progress in renegotiating these contracts [20][22] - There is a focus on improving operational efficiencies and increasing throughput to enhance profitability [51][52] Other Important Information - The company is experiencing challenges in finding and retaining talent, which is critical for scaling operations [49][50] - Management highlighted the importance of maintaining high-quality standards and on-time delivery to secure customer trust and future contracts [90][92] Q&A Session Summary Question: Backlog increase and management participation - Acknowledgment of backlog increase over $50 million and positive changes in management participation [17][19] Question: Duration of bad contracts - Management indicated that approximately 30% of customer revenue is affected by legacy contracts, with ongoing efforts to resolve these issues [20][21] Question: New business areas in backlog - All backlog is related to air defense and submarine defense opportunities [29][30] Question: STATCO's performance and future contributions - Management confirmed that STATCO has been a significant challenge but is working towards making it a positive contributor [33][34] Question: Revenue growth potential - Management believes the company can achieve higher revenues, potentially reaching $70 million to $100 million, with ongoing efforts to drive business development [41][42] Question: Renegotiation of contracts - Management indicated that while some contracts may need to be walked away from, the majority are expected to be renegotiated successfully [102][104] Question: Customer perceptions of gross margins - Management stated that the requested margins are within acceptable ranges for customers, emphasizing the importance of maintaining competitive pricing [112][120]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited financial statements and management's analysis of the company's performance and financial condition [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents unaudited financial statements and notes, highlighting a significant going concern issue due to debt covenant violations [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet shows a slight decrease in total assets and liabilities, with a notable decline in cash and cash equivalents Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | March 31, 2025 | Change | % Change | | :-------------------------------- | :------------ | :------------- | :----- | :------- | | Cash and cash equivalents | $143 | $195 | $(52) | -26.7% | | Accounts receivable, net | $2,794 | $2,192 | $602 | 27.5% | | Contract assets | $9,077 | $9,587 | $(510) | -5.3% | | Total current assets | $15,638 | $15,346 | $292 | 1.9% | | Property, plant and equipment, net | $12,296 | $13,791 | $(1,495) | -10.8% | | Total assets | $32,142 | $33,527 | $(1,385) | -4.1% | | Accounts payable | $2,615 | $2,437 | $178 | 7.3% | | Contract liabilities | $1,962 | $1,040 | $922 | 88.7% | | Current portion of long-term debt, net | $5,714 | $7,353 | $(1,639) | -22.3% | | Total current liabilities | $16,386 | $16,916 | $(530) | -3.1% | | Total liabilities | $23,930 | $24,787 | $(857) | -3.5% | | Total stockholders' equity | $8,212 | $8,740 | $(528) | -6.0% | | Total liabilities and stockholders' equity | $32,142 | $33,527 | $(1,385) | -4.1% | [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company's revenue declined, but gross profit surged and net loss narrowed significantly compared to the prior year Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | :------- | | Revenue | $7,379 | $7,986 | $(607) | -7.6% | | Cost of revenue | $6,349 | $7,747 | $(1,398) | -18.0% | | Gross profit | $1,030 | $239 | $791 | 330.9% | | Selling, general and administrative | $1,493 | $1,580 | $(87) | -5.5% | | Loss from operations | $(463) | $(1,341) | $878 | 65.5% | | Net loss | $(597) | $(1,460) | $863 | 59.1% | | Net loss per share – basic and diluted | $(0.06) | $(0.16) | $0.10 | 62.5% | | Weighted average shares outstanding | 9,757,846 | 8,983,970 | 773,876 | 8.6% | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Stockholders' equity decreased due to a net loss that was partially offset by stock-based compensation expenses Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | Balance March 31, 2025 | Stock issued for exercised options | Stock-based compensation | Net loss | Balance June 30, 2025 | | :----------------------- | :--------------------- | :------------------------------- | :----------------------- | :------- | :-------------------- | | Common Stock | $1 | $0 | $0 | $0 | $1 | | Additional Paid in Capital | $18,885 | $0 | $69 | $0 | $18,954 | | Accumulated Deficit | $(10,146) | $0 | $0 | $(597) | $(10,743) | | Total Stockholders' Equity | $8,740 | $0 | $69 | $(597) | $8,212 | - Total stockholders' equity decreased by **$528 thousand** from March 31, 2025, to June 30, 2025, primarily due to a **net loss of $597 thousand**, partially offset by **$69 thousand in stock-based compensation**[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash flow from operations and investing activities improved, but financing activities led to a net decrease in cash Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | | Net cash provided by operating activities | $646 | $107 | $539 | | Net cash provided by (used in) investing activities | $976 | $(31) | $1,007 | | Net cash used in financing activities | $(1,674) | $(170) | $(1,504) | | Net decrease in cash and cash equivalents | $(52) | $(94) | $42 | | Cash and cash equivalents, end of period | $143 | $44 | $99 | - Noncash transactions for the three months ended June 30, 2024, included the extinguishment of a **$1.1 million liability** by issuing **320,000 shares of common stock** for a breakup fee related to the Votaw Precision Technologies, Inc acquisition termination[14](index=14&type=chunk)[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes detail accounting policies, revenue, debt, and segment information, emphasizing liquidity and going concern issues [Note 1 - Description of Business](index=7&type=section&id=NOTE%201%20-%20DESCRIPTION%20OF%20BUSINESS) The company is a custom manufacturer of large-scale precision components for the defense and industrial markets - TechPrecision Corporation is a custom manufacturer of precision, large-scale fabrication components and machined metal structural components[18](index=18&type=chunk) - The Company primarily serves customers in the **defense and precision industrial markets**[18](index=18&type=chunk) - Key subsidiaries include Ranor, Westminster Credit Holdings, LLC (WCH), Stadco New Acquisition, LLC (Acquisition Sub), and Stadco[17](index=17&type=chunk) [Note 2 - Basis of Presentation and Significant Accounting Policies](index=7&type=section&id=NOTE%202%20-%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines accounting policies and highlights substantial doubt about the company's ability to continue as a going concern - The Company reported a **net loss of $597 thousand** for the three months ended June 30, 2025[22](index=22&type=chunk) - As of June 30, 2025, total available liquidity was **$1,856 thousand**, consisting of **$1,949 thousand undrawn capacity** under the revolver loan, **$143 thousand in cash**, and **$236 thousand of book overdrafts**[23](index=23&type=chunk) - The Company acknowledges a **continuing event of default** under the Loan Agreement due to failure to satisfy certain debt covenants as of June 30, 2025, and March 31, 2025, leading to the reclassification of all long-term debt as current[24](index=24&type=chunk)[26](index=26&type=chunk) - **Substantial doubt exists** about the Company's ability to continue as a going concern for at least one year due to recurring operating losses at Stadco, the need for revolver loan renewal or alternative financing by August 29, 2025, and ongoing debt covenant non-compliance[29](index=29&type=chunk)[30](index=30&type=chunk) - The Company adopted ASU 2023-09 (Income Taxes) on April 1, 2025, impacting income tax disclosures[31](index=31&type=chunk) - New accounting standards not yet adopted include ASU 2024-03 (Expense Disaggregation) effective after December 15, 2026, and ASU 2025-05 (Credit Losses) effective after December 15, 2025[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 3 - Revenue](index=11&type=section&id=NOTE%203%20%E2%80%93%20REVENUE) Revenue is primarily generated from the defense market and recognized over time, with a significant backlog of performance obligations Revenue Disaggregation by Market (in thousands) | Market | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | | Defense | $7,379 | $7,800 | | Industrial | $0 | $186 | | **Totals** | **$7,379** | **$7,986** | Revenue Disaggregation by Contract Type (in thousands) | Contract Type | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------- | :------------------------------- | :------------------------------- | | Over-time | $6,685 | $7,492 | | Point-in-time | $694 | $494 | | **Totals** | **$7,379** | **$7,986** | - As of June 30, 2025, the Company had **$50,114 thousand of remaining performance obligations**, with **$44,051 thousand less than 50% complete**, expected to be recognized within the next thirty-six months[37](index=37&type=chunk) Revenue from Key Customers (over 10% of total revenue, in thousands) | Customer | June 30, 2025 Amount | June 30, 2025 Percent | June 30, 2024 Amount | June 30, 2024 Percent | | :--------- | :------------------- | :-------------------- | :------------------- | :-------------------- | | Customer A | $1,126 | 15% | $1,762 | 22% | | Customer C | $1,845 | 25% | $1,075 | 14% | | Customer E | $1,590 | 21% | $1,844 | 23% | | Customer F | $711 | 10% | $879 | 11% | Segment Revenue (in thousands) | Segment | June 30, 2025 Amount | June 30, 2025 Percent | June 30, 2024 Amount | June 30, 2024 Percent | | :-------- | :------------------- | :-------------------- | :------------------- | :-------------------- | | Ranor | $3,202 | 43% | $3,888 | 45% | | Stadco | $2,070 | 28% | $2,664 | 26% | Contract Assets and Liabilities (in thousands) | Metric | June 30, 2025 | March 31, 2025 | | :----------------- | :------------ | :------------- | | Contract assets | $9,077 | $9,587 | | Contract liabilities | $1,962 | $1,040 | [Note 4 - Income Taxes](index=12&type=section&id=NOTE%204%20%E2%80%93%20INCOME%20TAXES) No income tax expense was recorded due to a full valuation allowance against deferred tax assets from operating losses - No income tax expense or benefit was provided for the three months ended June 30, 2025, and 2024, due to a **valuation allowance against deferred tax assets**[41](index=41&type=chunk) - The valuation allowance on deferred tax assets was approximately **$5,700 thousand** at June 30, 2025, and **$5,722 thousand** at March 31, 2025, reflecting management's belief that certain future tax benefits are unlikely to be realized due to recent operating losses and unsettled circumstances[42](index=42&type=chunk) - The 'One Big Beautiful Bill Act,' enacted July 4, 2025, will be applicable in fiscal 2026, allowing accelerated tax deductions for qualified property, plant, and equipment expenditures[43](index=43&type=chunk) [Note 5 - Earnings Per Share (EPS)](index=12&type=section&id=NOTE%205%20%E2%80%93%20EARNINGS%20PER%20SHARE%20(EPS)) Net loss per share improved year-over-year, with certain stock options, warrants, and restricted stock excluded as anti-dilutive Basic and Diluted EPS (in thousands, except per share data) | Metric | Three Months ended June 30, 2025 | Three Months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(597) | $(1,460) | | Weighted average shares – basic and diluted | 9,757,846 | 8,983,970 | | Net loss per share | $(0.06) | $(0.16) | Anti-Dilutive Common Stock Equivalents Excluded from Diluted EPS | Type | June 30, 2025 | June 30, 2024 | | :------------- | :------------ | :------------ | | Stock options | 542,500 | 542,500 | | Warrants | 711,083 | 25,000 | | Restricted stock | 10,000 | 15,000 | [Note 6 - Stock-Based Compensation](index=14&type=section&id=NOTE%206%20%E2%80%93%20STOCK-BASED%20COMPENSATION) The company issues equity awards under its 2016 incentive plan, with compensation costs recognized for various grants - The 2016 TechPrecision Equity Incentive Plan authorizes awards of various equity instruments to employees, directors, and consultants, with a maximum of **1,250,000 shares** of common stock available for issuance[47](index=47&type=chunk) - As of June 30, 2025, there were **204,327 shares available for grant** under the 2016 Plan[48](index=48&type=chunk) Stock Option Activity (Number of Options) | Metric | March 31, 2025 | Exercised | June 30, 2025 | | :-------------------------- | :------------- | :-------- | :------------ | | Outstanding | 542,500 | (50,000) | 492,500 | | Weighted Average Exercise Price | $1.53 | $0.67 | $1.41 | | Aggregate Intrinsic Value | $456,150 | $337,500 | $1,146,350 | - Total recognized compensation cost related to restricted stock awards for the three months ended June 30, 2025, was **$9 thousand** for the former CFO's award, **$45 thousand** for non-employee directors' awards, and **$15 thousand** for the new CFO's award[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Remaining unrecognized compensation cost for restricted stock awards totals **$37 thousand** (former CFO), **$90 thousand** (non-employee directors), and **$165 thousand** (new CFO), expected to be recognized over 12, 6, and 33 months, respectively[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Note 7 - Concentration of Credit Risk](index=16&type=section&id=NOTE%207%20-%20CONCENTRATION%20OF%20CREDIT%20RISK) A significant portion of the company's accounts receivable is concentrated with two major customers - As of June 30, 2025, **two customers accounted for 67%** of the total trade accounts receivable balance[56](index=56&type=chunk) Accounts Receivable Concentration (over 10% of total, in thousands) | Customer | June 30, 2025 Amount | June 30, 2025 Percent | March 31, 2025 Amount | March 31, 2025 Percent | | :--------- | :------------------- | :-------------------- | :-------------------- | :--------------------- | | Customer A | $557 | 20% | $239 | 11% | | Customer E | $1,302 | 47% | $1,024 | 47% | [Note 8 - Other Current Assets](index=16&type=section&id=NOTE%208%20-%20OTHER%20CURRENT%20ASSETS) Other current assets primarily consist of prepaid insurance and subscriptions Other Current Assets (in thousands) | Item | June 30, 2025 | March 31, 2025 | | :------------------ | :------------ | :------------- | | Prepaid insurance | $210 | $236 | | Prepaid subscriptions | $125 | $169 | | Prepaid taxes | $4 | $25 | | Supplier advances | $29 | $0 | | Deposits | $20 | $30 | | Other | $17 | $30 | | **Total** | **$405** | **$490** | [Note 9 - Property, Plant and Equipment, Net](index=16&type=section&id=NOTE%209%20-%20PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) The net value of property, plant, and equipment decreased due to depreciation Property, Plant and Equipment, Net (in thousands) | Item | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :------------ | :------------- | | Total property, plant, and equipment | $29,175 | $30,156 | | Less: accumulated depreciation | $(16,879) | $(16,365) | | **Total property, plant and equipment, net** | **$12,296** | **$13,791** | - Depreciation expense was **$519 thousand** for the three months ended June 30, 2025, compared to **$520 thousand** for the same period in 2024[58](index=58&type=chunk) - The Company recognizes new equipment purchases as fixed assets and customer reimbursements as a contra-asset, with future depreciation offset by amortization of the contra-asset[59](index=59&type=chunk) [Note 10 - Accrued Expenses](index=17&type=section&id=NOTE%2010%20-%20ACCRUED%20EXPENSES) Accrued expenses remained stable, with primary components being compensation and project costs Accrued Expenses (in thousands) | Item | June 30, 2025 | March 31, 2025 | | :------------------------ | :------------ | :------------- | | Accrued compensation | $1,442 | $1,346 | | Accrued project costs | $1,077 | $1,009 | | Accrued professional fees | $406 | $521 | | Provision for claims | $236 | $236 | | Provision for contract losses | $213 | $463 | | Book overdrafts | $236 | $0 | | Other | $78 | $110 | | **Total** | **$3,688** | **$3,685** | - Accrued compensation includes executive bonuses, payroll, and vacation/holiday pay. Provisions for estimated losses on uncompleted contracts are recorded in cost of revenue[60](index=60&type=chunk) [Note 11 - Debt](index=17&type=section&id=NOTE%2011%20%E2%80%93%20DEBT) Due to non-compliance with debt covenants, all long-term debt has been reclassified as current Long-Term Debt (in thousands) | Loan Type | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :------------ | :------------- | | Stadco Term Loan (3.79%, due Aug 2028) | $1,943 | $2,086 | | Ranor Term Loan (6.05%, due Dec 2027) | $2,134 | $2,151 | | Ranor Revolver Loan (due Aug 2025) | $1,664 | $3,150 | | Stadco equipment financing (13.38%, due Apr 2026) | $29 | $37 | | **Total debt** | **$5,770** | **$7,424** | | Less: debt issue costs unamortized | $(56) | $(68) | | **Total debt, net** | **$5,714** | **$7,356** | | Less: Current portion of long-term debt | $(5,714) | $(7,353) | | **Total long-term debt, net** | **$0** | **$3** | - **All long-term debt has been classified as current** in the consolidated balance sheet due to the Company's non-compliance with certain debt covenants as of June 30, 2025, and March 31, 2025[61](index=61&type=chunk)[73](index=73&type=chunk) - The Ranor Revolver Loan has an unused borrowing capacity of **$1,949 thousand** as of June 30, 2025, and is due August 29, 2025[68](index=68&type=chunk)[143](index=143&type=chunk) - The Company was **not in compliance with debt covenants** related to Cash Flow to Total Debt Service (not less than 1.20 to 1.00) and Balance Sheet Leverage (less than or equal to 2.50 to 1.00)[70](index=70&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) [Note 12 - Other Noncurrent Liabilities](index=20&type=section&id=NOTE%2012%20-%20OTHER%20NONCURRENT%20LIABILITIES) Noncurrent liabilities primarily consist of customer reimbursements for equipment and a settlement agreement - Other noncurrent liabilities include **$3,161 thousand** as of June 30, 2025, related to customer reimbursements for equipment costs, which may be clawed back in case of contract breach[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Stadco has a settlement agreement with LADWP for **$1,800 thousand**, with monthly installment payments until November 15, 2030. The liability was **$221 thousand (current)** and **$940 thousand (noncurrent)** as of June 30, 2025[79](index=79&type=chunk) [Note 13 - Leases](index=20&type=section&id=NOTE%2013%20%E2%80%93%20LEASES) The company holds right-of-use assets and corresponding lease liabilities for its facilities and equipment Right-of-Use Assets and Lease Liabilities (in thousands) | Item | June 30, 2025 | March 31, 2025 | | :-------------------------- | :------------ | :------------- | | Right of use assets net | $4,086 | $4,268 | | Total lease liability | $4,219 | $4,408 | Components of Lease Expense (in thousands) | Item | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Operating lease amortization | $180 | $172 | | Finance lease amortization | $2 | $2 | | Finance lease interest | $0 | $0 | Maturities of Lease Liabilities (as of June 30, 2025, in thousands) | Period | Amount | | :-------------------------- | :----- | | July 1, 2025 – June 30, 2026 | $946 | | July 1, 2026 – June 30, 2027 | $939 | | July 1, 2027 – June 30, 2028 | $939 | | July 1, 2028 – June 30, 2029 | $939 | | July 1, 2029 – June 30, 2030 | $860 | | **Total lease payments** | **$4,623** | | Less: imputed interest | $(404) | | **Total** | **$4,219** | [Note 14 - Commitments and Contingent Liabilities](index=22&type=section&id=NOTE%2014%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) The company has commitments for executive salaries, purchase obligations for materials, and customer-reimbursed equipment - The aggregate commitment for future executive salaries was **$615 thousand** as of June 30, 2025[83](index=83&type=chunk) - Purchase obligations outstanding totaled **$9,296 thousand** for materials and supplies (expected within 12 months) and **$7,483 thousand** for machinery and equipment (fully reimbursed by a customer)[84](index=84&type=chunk) - Company contributions to the defined contribution and savings plan were **$17 thousand** for the three months ended June 30, 2025, compared to **$21 thousand** for the same period in 2024[85](index=85&type=chunk) [Note 15 - Segment Information](index=23&type=section&id=NOTE%2015%20%E2%80%93%20SEGMENT%20INFORMATION) The company operates through two segments, Ranor and Stadco, with Ranor profitable and Stadco incurring operating losses - The Company operates two reportable segments: **Ranor and Stadco**, both focused on manufacturing and assembly of components primarily for defense, aerospace, and other precision industrial customers in the U.S[86](index=86&type=chunk) Segment Financial Information (in thousands) | Metric | Ranor (Q2 2025) | Stadco (Q2 2025) | Total (Q2 2025) | Ranor (Q2 2024) | Stadco (Q2 2024) | Total (Q2 2024) | | :-------------------------------- | :-------------- | :--------------- | :-------------- | :-------------- | :--------------- | :-------------- | | Revenue, net | $4,242 | $3,137 | $7,379 | $4,382 | $3,604 | $7,986 | | Cost of revenue | $2,749 | $3,600 | $6,349 | $3,145 | $4,602 | $7,747 | | Selling, general, and administrative | $652 | $735 | $1,387 | $453 | $671 | $1,124 | | Income (loss) from operations | $841 | $(1,198) | $(357) | $784 | $(1,669) | $(885) | | Depreciation and amortization | $259 | $442 | $701 | $261 | $433 | $694 | | Capital expenditures | $1,250 | $0 | $1,250 | $201 | $0 | $201 | - Consolidated operating loss improved from **$(1,341) thousand** in Q2 2024 to **$(463) thousand** in Q2 2025, with unallocated corporate general costs decreasing from **$(37) thousand** to **$(106) thousand** and no costs related to terminated acquisition in Q2 2025 (vs **$(419) thousand** in Q2 2024)[88](index=88&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial performance, results by segment, liquidity, capital resources, and the significant going concern issue [Statement Regarding Forward Looking Disclosure](index=24&type=section&id=Statement%20Regarding%20Forward%20Looking%20Disclosure) This report contains forward-looking statements that involve risks and uncertainties, including the company's going concern status - The report contains forward-looking statements based on current expectations, estimates, and projections, which involve risks, uncertainties, and assumptions that could cause actual results to differ materially[91](index=91&type=chunk)[92](index=92&type=chunk) - Key risks include reliance on individual purchase orders, ability to control operating expenses, external factors (e.g., conflicts, inflation, interest rates), availability of financing, customer concentration, and the **substantial doubt about the Company's ability to continue as a going concern**[92](index=92&type=chunk) [Overview](index=26&type=section&id=Overview) The company operates through its Ranor and Stadco subsidiaries, providing custom manufacturing for the US defense sector - Ranor, located in North Central Massachusetts, provides custom solutions for precision finished welded and machined components up to 100 tons, primarily serving the **US defense sector (over 95% of revenue)** and is ISO 9001:2015 and ITAR compliant[93](index=93&type=chunk)[94](index=94&type=chunk) - Stadco, located in Los Angeles, California, manufactures large mission-critical components for military aircraft, helicopters, and space programs, also serving the **defense sector (over 95% of revenue)** and holds AS 9100 D, ISO 9001:2015, and NADCAP NonDestructive Testing certifications[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - The Company's custom manufacturing operations focus on repeating custom programs with mature designs for long-term solutions, manufacturing to customer **'build-to-print' requirements** without owning intellectual property or marketing products[98](index=98&type=chunk)[99](index=99&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Revenue recognition is a critical accounting estimate, with no significant policy changes in the recent quarter - **Revenue recognition** is considered one of the most critical accounting estimates, with revenue fluctuating based on project duration (over-time or point-in-time) and progress measured by input methods like labor hours[104](index=104&type=chunk)[105](index=105&type=chunk) - **No significant changes** were made to critical accounting policies during the three months ended June 30, 2025[106](index=106&type=chunk) [New Accounting Standards](index=28&type=section&id=New%20Accounting%20Standards) Information on new accounting standards is detailed in Note 2 of the financial statements - Refer to Note 2 for a discussion of recently adopted and not yet adopted new accounting guidance[107](index=107&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Consolidated revenue decreased by 8%, but gross profit surged 331% and operating loss narrowed due to improved throughput and lower costs [Revenue](index=30&type=section&id=Revenue_MD&A) Consolidated revenue decreased due to declines in both the Ranor and Stadco segments, despite strong backlogs Consolidated and Segment Revenue (in thousands) | Segment | June 30, 2025 Amount | June 30, 2025 % of Revenue | June 30, 2024 Amount | June 30, 2024 % of Revenue | Change Amount | Change % | | :-------------------- | :------------------- | :------------------------- | :------------------- | :------------------------- | :------------ | :------- | | Ranor | $4,297 | 58% | $4,382 | 55% | $(85) | -2% | | Stadco | $3,332 | 45% | $3,604 | 45% | $(272) | -8% | | Intersegment elimination | $(250) | -3% | $0 | 0% | $(250) | nm % | | **Consolidated Revenue** | **$7,379** | **100%** | **$7,986** | **100%** | **$(607)** | **-8%** | - Consolidated revenue decreased by **8% year-over-year**, with Ranor's revenue down **2%** and Stadco's down **8%**[114](index=114&type=chunk) - Ranor's backlog was **$24,402 thousand** and Stadco's backlog was **$25,712 thousand** as of June 30, 2025, indicating strong new orders[116](index=116&type=chunk)[118](index=118&type=chunk) [Gross Profit and Gross Margin](index=30&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Consolidated gross profit and margin increased significantly, driven by lower loss provisions at both segments Consolidated and Segment Gross Profit (in thousands) | Segment | June 30, 2025 Amount | June 30, 2025 % of Revenue | June 30, 2024 Amount | June 30, 2024 % of Revenue | Change Amount | Change % | | :-------------------- | :------------------- | :------------------------- | :------------------- | :------------------------- | :------------ | :------- | | Ranor | $1,493 | 35% | $1,237 | 28% | $256 | 21% | | Stadco | $(463) | -14% | $(998) | -28% | $535 | 54% | | **Consolidated Gross profit** | **$1,030** | **14%** | **$239** | **3%** | **$791** | **331%** | - Consolidated gross profit increased by **331% to $1,030 thousand**, and gross margin expanded to **14.0% from 3.0%** year-over-year, primarily due to lower loss provisions at both Ranor and Stadco[119](index=119&type=chunk) - Stadco's gross profit, while still negative, improved significantly from **$(998) thousand to $(463) thousand**, driven by lower loss provision and decreased repairs and maintenance[121](index=121&type=chunk) [Selling, General and Administrative (SG&A) Expenses](index=31&type=section&id=Selling,%20General%20and%20Administrative%20(SG&A)%20Expenses) Consolidated SG&A expenses decreased due to the absence of prior-year acquisition-related costs Consolidated and Segment SG&A Expenses (in thousands) | Segment | June 30, 2025 Amount | June 30, 2025 % of Revenue | June 30, 2024 Amount | June 30, 2024 % of Revenue | Change Amount | Change % | | :-------------------- | :------------------- | :------------------------- | :------------------- | :------------------------- | :------------ | :------- | | Ranor | $652 | 9% | $453 | 6% | $199 | 44% | | Stadco | $735 | 10% | $671 | 8% | $64 | 9% | | Corporate and unallocated | $106 | 1% | $456 | 6% | $(350) | -77% | | **Consolidated SG&A** | **$1,493** | **20%** | **$1,580** | **20%** | **$(87)** | **-6%** | - Consolidated SG&A expenses decreased by **6% year-over-year**, primarily due to lower corporate costs offsetting increased office costs at Ranor and Stadco[122](index=122&type=chunk) - Corporate and unallocated SG&A decreased by **$350 thousand**, mainly due to the absence of the change in fair value related to the breakup fee for the terminated Votaw Precision Technologies, Inc acquisition[124](index=124&type=chunk) [Operating (loss) income](index=31&type=section&id=Operating%20(loss)%20income) The consolidated operating loss narrowed significantly due to improved performance at Stadco and lower corporate costs Consolidated and Segment Operating (Loss) Income (in thousands) | Segment | June 30, 2025 Amount | June 30, 2025 % of Revenue | June 30, 2024 Amount | June 30, 2024 % of Revenue | Change Amount | Change % | | :-------------------- | :------------------- | :------------------------- | :------------------- | :------------------------- | :------------ | :------- | | Ranor | $843 | 11% | $784 | 10% | $59 | 8% | | Stadco | $(1,200) | -16% | $(1,669) | -21% | $469 | 28% | | Corporate and unallocated | $(106) | -1% | $(456) | -6% | $350 | 77% | | **Operating loss** | **$(463)** | **-6%** | **$(1,341)** | **-17%** | **$878** | **66%** | - Consolidated operating loss improved by **$878 thousand**, narrowing to **$(463) thousand**, primarily due to lower operating losses at Stadco and the absence of acquisition costs at the corporate level[125](index=125&type=chunk) - Stadco's operating loss narrowed as manufacturing costs decreased and productivity improved[127](index=127&type=chunk) [Other Income (Expense), net](index=32&type=section&id=Other%20Income%20(Expense),%20net) Total other expense increased slightly due to lower other income and higher amortization of debt issue costs Other Income (Expense), Net (in thousands) | Item | June 30, 2025 | June 30, 2024 | $ Change | % Change | | :-------------------------- | :------------ | :------------ | :------- | :------- | | Other income | $1 | $13 | $(12) | -92% | | Interest expense | $(112) | $(115) | $3 | 3% | | Amortization of debt issue costs | $(23) | $(17) | $(6) | -34% | | **Total other expense** | **$(134)** | **$(119)** | **$(15)** | **-12.6%** | - Interest expense decreased by **$3 thousand** due to lower Revolver Loan borrowings and reduced interest on term loans[128](index=128&type=chunk) - Other income in Q2 2024 included a vendor rebate of approximately **$11 thousand**, which was not present in Q2 2025[129](index=129&type=chunk) [Income Tax Expense](index=32&type=section&id=Income%20Tax%20expense) No income tax expense was recorded due to a full valuation allowance against deferred tax assets - No income tax expense or benefit was recorded for the three months ended June 30, 2025, due to a **valuation allowance of approximately $5,700 thousand** against deferred tax assets, reflecting the unlikelihood of realizing certain future tax benefits[130](index=130&type=chunk)[131](index=131&type=chunk) [Net Loss](index=32&type=section&id=Net%20Loss) The company's net loss improved significantly compared to the prior-year period - The Company recorded a **net loss of $597 thousand**, or **$0.06 per share**, for the three months ended June 30, 2025, a significant improvement from a **net loss of $1,460 thousand**, or **$0.16 per share**, in the prior year period[132](index=132&type=chunk) [Liquidity, Capital Resources and Going Concern](index=32&type=section&id=Liquidity,%20Capital%20Resources%20and%20Going%20Concern) The company faces substantial doubt about its going concern status due to operating losses, debt covenant non-compliance, and upcoming loan renewal [Operating Activities](index=33&type=section&id=Operating%20activities) Cash provided by operating activities increased year-over-year, driven by favorable changes in working capital - Cash provided by operating activities increased to **$646 thousand** for the three months ended June 30, 2025, from **$107 thousand** in the prior year, driven by working capital changes providing **$694 thousand**[137](index=137&type=chunk) - The primary sources of cash are customer revenue, contract advances, and accounts receivable collections, which can fluctuate with project milestones[136](index=136&type=chunk) [Investing Activities](index=33&type=section&id=Investing%20activities) Investing activities provided a significant amount of cash due to reimbursements for equipment purchases - Net cash provided by investing activities was **$976 thousand** for the three months ended June 30, 2025, a significant increase from **$(31) thousand** in the prior year, primarily due to **$2,226 thousand in reimbursements** for property, plant, and equipment purchases[135](index=135&type=chunk)[138](index=138&type=chunk) - Purchases of new factory machinery and equipment totaled **$1,250 thousand** for the three months ended June 30, 2025[138](index=138&type=chunk) [Financing Activities](index=33&type=section&id=Financing%20activities) Financing activities used a significant amount of cash, primarily for net repayments on the Revolver Loan - Net cash used in financing activities increased to **$1,674 thousand** for the three months ended June 30, 2025, from **$170 thousand** in the prior year, primarily due to net repayments of the Revolver Loan (**$2,755 thousand borrowings vs $4,241 thousand payments**)[135](index=135&type=chunk)[139](index=139&type=chunk) - The Company also used **$188 thousand** to pay down debt principal, periodic lease payments, and debt issue costs[139](index=139&type=chunk) [Berkshire Bank Loans](index=35&type=section&id=Berkshire%20Bank%20Loans) The company is in continuing default on its loan agreement, raising substantial doubt about its ability to continue as a going concern - The Company is in **continuing default** under the Loan Agreement with Berkshire Bank due to failure to satisfy certain debt covenants as of June 30, 2025, and March 31, 2025[144](index=144&type=chunk)[145](index=145&type=chunk) - The lender has not granted a waiver and reserves the right to accelerate and demand immediate repayment of the outstanding indebtedness (**$5,741 thousand** as of June 30, 2025)[144](index=144&type=chunk)[145](index=145&type=chunk) - Management is exploring options to strengthen liquidity, including making Stadco operations profitable, renewing the Revolver Loan (due August 29, 2025), or entering into alternative debt facilities[146](index=146&type=chunk)[147](index=147&type=chunk) - The uncertainty surrounding Stadco's losses, Revolver Loan renewal, and debt covenant compliance raises **substantial doubt about the Company's ability to continue as a going concern**[148](index=148&type=chunk) [Commitments and Contractual Obligations](index=36&type=section&id=Commitments%20and%20Contractual%20Obligations) The company has significant commitments for debt, raw materials, equipment, and operating leases - Debt obligations totaled **$5,770 thousand**, all classified as current due to covenant violations[153](index=153&type=chunk) - Outstanding unconditional contractual commitments for raw materials and supplies totaled approximately **$9,296 thousand**, due within the next twelve months[153](index=153&type=chunk) - Purchase obligations for machinery and equipment amounted to **$7,483 thousand**, for which the Company is fully reimbursed by a customer[153](index=153&type=chunk) - Operating lease obligations, including imputed interest, totaled **$4,212 thousand** through 2030, with approximately **$900 thousand due annually** for each of the next five years[153](index=153&type=chunk) [EBITDA Non-GAAP Financial Measure](index=36&type=section&id=EBITDA%20Non-GAAP%20Financial%20Measure) EBITDA, a non-GAAP measure, improved significantly from a loss to a positive figure year-over-year - EBITDA is presented as a non-GAAP financial measure to compare operating performance, especially given different financing and capital structures, and is used in debt covenants[151](index=151&type=chunk) EBITDA Reconciliation to Net Loss (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change Amount | | :-------------------------- | :------------ | :------------ | :------------ | | Net loss | $(597) | $(1,460) | $863 | | Income tax benefit | $0 | $0 | $0 | | Interest expense (1) | $135 | $132 | $3 | | Depreciation and amortization | $701 | $694 | $7 | | **EBITDA** | **$239** | **$(634)** | **$873** | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](index=37&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) As a smaller reporting company, the company has elected not to provide disclosure about market risk - The Company, as a smaller reporting company, has elected not to provide quantitative and qualitative disclosure about market risk[154](index=154&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=37&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were ineffective as of June 30, 2025, due to five identified material weaknesses [Evaluation of Disclosure Controls and Procedures](index=37&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed not effective due to material weaknesses in internal control - As of June 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were **not effective** due to material weaknesses in internal control over financial reporting[156](index=156&type=chunk) [Management's Responsibility for Internal Controls](index=37&type=section&id=Management's%20Responsibility%20for%20Internal%20Controls) Management is responsible for establishing and maintaining adequate internal control over financial reporting - The Company's internal control over financial reporting is designed to provide **reasonable assurance** regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S GAAP[157](index=157&type=chunk) [Inherent Limitations Over Internal Controls](index=37&type=section&id=Inherent%20Limitations%20Over%20Internal%20Controls) Internal controls provide reasonable, not absolute, assurance and are subject to inherent limitations - Management acknowledges that internal controls, no matter how well designed, can only provide **reasonable, not absolute, assurance** and may not prevent or detect all errors and fraud due to inherent limitations and resource constraints[158](index=158&type=chunk) [Material Weaknesses](index=38&type=section&id=Material%20Weaknesses) Five material weaknesses were identified related to accounting for acquisitions, taxes, assets, and segregation of duties - **Five material weaknesses** were identified in internal control over financial reporting as of March 31, 2025, indicating a reasonable possibility of material misstatement not being prevented or detected timely[159](index=159&type=chunk) - The material weaknesses include inadequate controls over **purchase accounting** for the Stadco acquisition, insufficient **tax accounting personnel** leading to late adjustments for valuation allowance, and inadequate resources and expertise in **Stadco accounting staff** resulting in post-closing adjustments for POC revenue projects[161](index=161&type=chunk) - Additional weaknesses involve the inability to timely complete **impairment tests for long-lived assets** and a temporary **lack of segregation of duties** where an interim CFO/Controller assumed both reviewer and preparer roles[161](index=161&type=chunk) - Despite the material weaknesses, management believes the condensed consolidated financial statements fairly present the Company's financial condition, results of operations, and cash flows[160](index=160&type=chunk) [Remediation of the Material Weaknesses](index=40&type=section&id=Remediation%20of%20the%20Material%20Weaknesses) The company is actively working to remediate the identified material weaknesses, but the process is not yet complete - Remediation efforts are ongoing, including enhancing the purchase accounting framework, engaging tax and impairment specialists, transitioning Stadco's accounting function to the CFO office in Massachusetts, and resolving segregation of duties with the hiring of a new CFO[163](index=163&type=chunk) - The material weaknesses will not be considered remediated until applicable controls operate for a sufficient period and management concludes, through testing, that they are operating effectively[164](index=164&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes to internal controls occurred during the quarter, other than the ongoing remediation efforts - Except for the disclosed remediation plan, there have been no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected or are reasonably likely to materially affect, the Company's internal control over financial reporting[166](index=166&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, other required disclosures, and a list of exhibits filed with the report [ITEM 1. LEGAL PROCEEDINGS](index=42&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently a party to any material legal proceedings - As of the report date, the Company is **not a party to any material legal or administrative proceedings**[168](index=168&type=chunk) - Any litigation or legal proceeding, regardless of outcome, is likely to result in substantial cost and diversion of management's resources[168](index=168&type=chunk) [ITEM 5. OTHER INFORMATION](index=42&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers reported adopting or terminating Rule 10b5-1 trading arrangements during the quarter - No directors or officers informed the Company of the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[169](index=169&type=chunk) [ITEM 6. EXHIBITS](index=42&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications, and XBRL data - The exhibit index includes the Certificate of Incorporation, Amended and Restated By-laws, Certificate of Designation for Series A Convertible Preferred Stock, Second Amendment to 2016 Equity Incentive Plan, and certifications by the CEO and CFO (Sections 302 and 906 of Sarbanes-Oxley Act)[170](index=170&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema Document, Calculation Linkbase Document, Definition Linkbase Document, Label Linkbase Document, Presentation Linkbase Document, and Cover Page Interactive Data File are also included[170](index=170&type=chunk)[171](index=171&type=chunk) [SIGNATURES](index=44&type=section&id=SIGNATURES) The report is duly signed on behalf of TechPrecision Corporation by its Chief Financial Officer on August 21, 2025 - The report was signed by **Phillip E. Podgorski, Chief Financial Officer** of TechPrecision Corporation, on **August 21, 2025**[174](index=174&type=chunk)

Financial Data and Key Metrics Changes - Fiscal 2025 Q4 consolidated revenue was $9.5 million, a 10% increase from $8.6 million in Q4 2024 [5] - Consolidated gross profit for Q4 was $2.1 million, a 70% increase compared to the previous year [5] - Full year consolidated revenue for fiscal 2025 was $34 million, an 8% increase from fiscal 2024 [6][12] - Net income for Q4 was $100,000, while the net loss for the full year was $2.7 million, or $0.29 per share [11][12] Business Line Data and Key Metrics Changes - Raynor segment revenue for Q4 was $4.7 million with an operating profit of $1.2 million [6] - STADCO segment revenue for Q4 was $4.9 million with an operating profit of $800,000, showing a turnaround from an overall operating loss for the fiscal year [6][12] - Raynor's gross profit increased by 25% for the fiscal year, while STADCO's revenue increased by 10% [12][14] Market Data and Key Metrics Changes - Raynor's backlog was $48.6 million as of March 31, 2025, expected to be delivered over the next one to three fiscal years [8] - STADCO's backlog was $27.6 million, down slightly from the previous year, attributed to timing of purchase orders [14] Company Strategy and Development Direction - The company aims to secure and maintain partnerships within the defense sector, focusing on growth in revenue and profitability [18] - Management emphasized the importance of cash management and controlling expenses as part of their risk mitigation strategy [7] - The company is focused on integrating its subsidiaries to improve overall profitability [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the defense sector, citing strong customer relationships and backlog as indicators of future growth [18] - The company acknowledged ongoing challenges in operational efficiency, particularly in the STADCO segment, but is optimistic about continued improvements [21][26] Other Important Information - The company has secured over $21 million in fully funded grant money, which will be used for new equipment and production efficiency [8] - The company is actively managing cash flow and has reduced total debt from $7.6 million in 2024 to $7.4 million in 2025 [15][16] Q&A Session Summary Question: What is the current state of operational improvements? - Management indicated that while there has been progress, particularly in the Raynor segment, there is still more work to be done in the STADCO segment [21][26] Question: How will backlog delivery be distributed? - Management stated that backlog delivery is unlikely to be linear due to the nature of the business being "lumpy" and dependent on various factors [35] Question: Is there potential for growth in submarine programs? - Management confirmed that there is potential for growth in submarine programs, having shifted focus to predominantly Navy submarine business [40] Question: What are the impacts of legacy pricing agreements? - Management explained that reaching agreements on legacy pricing has allowed for reversals of loss provisions, positively impacting the income statement [81][82] Question: How does the company plan to utilize its facilities? - Management noted that capacity utilization varies and that they are focused on growing within existing customer bases to mitigate risks [72][73]

[Part I](index=4&type=section&id=PART%20I) [Business](index=4&type=section&id=Item%201.%20Business) TechPrecision Corporation manufactures large-scale, precision-fabricated and machined metal components primarily for the U.S. defense market, operating on a "build-to-print" model with a significant revenue concentration from a few prime contractors [Our Business and Operations](index=4&type=section&id=Item%201.%20Business-Our%20Business%20and%20Operations) The company manufactures precision, large-scale metal components for the defense and precision industrial sectors through its two U.S. defense-centric subsidiaries, Ranor and Stadco - TechPrecision is a manufacturer of precision, large-scale fabricated and machined metal components for the defense and precision industrial industries[12](index=12&type=chunk) - The company operates through two reportable segments, its wholly-owned subsidiaries Ranor and Stadco, both of which are U.S. defense-centric[14](index=14&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) - Ranor's operations are in a **145,000 sq ft facility** in Westminster, MA, while Stadco's are in a **183,000 sq ft complex** in Los Angeles, CA[25](index=25&type=chunk)[27](index=27&type=chunk) [Termination of the Votaw Acquisition](index=4&type=section&id=Item%201.%20Business-Termination%20of%20the%20Votaw%20Acquisition) The planned acquisition of Votaw Precision Technologies, Inc. was terminated in April 2024 due to failure to close by the deadline, resulting in a stock termination fee - The Stock Purchase Agreement to acquire Votaw Precision Technologies, Inc. was terminated on April 2, 2024[16](index=16&type=chunk) - The termination occurred because the acquisition did not close by the outside date of March 31, 2024[16](index=16&type=chunk) - A stock termination fee of **320,000 shares** of the Company's common stock was issued to the seller on April 29, 2024[17](index=17&type=chunk)[18](index=18&type=chunk) [Products and Customers](index=7&type=section&id=Item%201.%20Business-Products%20and%20Customers) The company operates on a "build-to-print" model, primarily serving the defense market with significant customer concentration and a current order backlog of $48.6 million - The company operates on a "build-to-print" model, manufacturing products according to customer specifications and does not own intellectual property for any marketed product[31](index=31&type=chunk) Revenue by Industry Group (in thousands) | (dollars in thousands) | 2025 | | 2024 | | |---|---|---|---|---| | Revenue | Amount | Percent | Amount | Percent | | Defense | $ 33,599 | 99% | $ 31,406 | 99% | | Precision Industrial | $ 432 | 1% | $ 185 | 1% | Revenue from Major Customers (in thousands) | (dollars in thousands) | 2025 | | 2024 | | |---|---|---|---|---| | Revenue | Amount | Percent | Amount | Percent | | Defense Customer A | $ 5,795 | 17% | $ 10,295 | 32% | | Defense Customer B | $ 3,327 | 10% | $ 3,320 | 10% | | Defense Customer C | $ 4,947 | 15% | $ 3,258 | 10% | | Defense Customer E | $ 7,671 | 22% | $ 5,005 | 16% | | Defense Customer F | $ 5,003 | 15% | * | *% | - The order backlog was **$48.6 million** as of March 31, 2025, compared to **$49.5 million** as of March 31, 2024[42](index=42&type=chunk) [Human Capital](index=12&type=section&id=Item%201.%20Business-Human%20Capital) As of March 31, 2025, TechPrecision employed 152 full-time individuals across its Ranor and Stadco subsidiaries, none of whom are unionized - As of March 31, 2025, the company had a total of **152 full-time employees**[53](index=53&type=chunk) - At the Ranor subsidiary, there are **21 salaried and 60 hourly employees**; at the Stadco subsidiary, there are **21 salaried and 50 hourly employees**[53](index=53&type=chunk) - None of the company's employees are represented by a labor union[53](index=53&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a "going concern" warning, high customer concentration, raw material volatility, and material weaknesses in internal controls [Risks Related to Our Business and Industry](index=12&type=section&id=Item%201A.%20Risk%20Factors-Risks%20Related%20to%20Our%20Business%20and%20Industry) Auditors have expressed substantial doubt about the company's going concern ability due to debt covenant non-compliance and high customer concentration, alongside risks from raw material costs and defense industry reliance - Auditors have indicated substantial doubt about the company's ability to continue as a going concern due to non-compliance with financial covenants in its Loan Agreement with Berkshire Bank as of March 31, 2025[56](index=56&type=chunk) - The company failed to satisfy the Debt Service Coverage Ratio (DSCR) for the twelve-month period ending March 31, 2025, which constitutes an event of default[59](index=59&type=chunk) - The company is highly dependent on a limited number of customers; in fiscal 2025, the five largest customers accounted for **79% of revenue**, and the single largest customer accounted for **22%**[70](index=70&type=chunk)[71](index=71&type=chunk) - The company's backlog of **$48.6 million** as of March 31, 2025, had **73%** attributable to just four customers[70](index=70&type=chunk) - The business is exposed to risks from raw material availability and price volatility for materials like steel, nickel, and aluminum, which could be impacted by tariffs and geopolitical events[74](index=74&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) [Risks Related to our Common Stock](index=29&type=section&id=Item%201A.%20Risk%20Factors-Risks%20Related%20to%20our%20Common%20Stock) The company's common stock faces potential Nasdaq delisting, significant price volatility due to low trading volume, and dilution risks from equity issuances - The company received a notice from Nasdaq for not being in compliance with the Timely Filing Requirement for its Form 10-K for the fiscal year ended March 31, 2025; failure to maintain compliance could lead to delisting[113](index=113&type=chunk) - A significant number of shares have been registered for resale, including those from the Votaw Stock Termination Fee and the July 2024 Private Placement, which could depress the market price[120](index=120&type=chunk) - The trading volume of the common stock is typically low, which can adversely affect liquidity and price[121](index=121&type=chunk) - The company does not expect to pay dividends due to cash requirements and restrictive debt covenants[122](index=122&type=chunk) [General Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors-General%20Risk%20Factors) The company has identified five material weaknesses in its internal control over financial reporting, which could impair its ability to produce accurate and timely financial statements - The company has identified material weaknesses in its internal control over financial reporting, which could impair its ability to produce accurate and timely financial statements[126](index=126&type=chunk) - Identified material weaknesses pertain to: (i) initial purchase and fair value accounting for the Stadco acquisition, (ii) insufficient tax accounting personnel for determining the valuation allowance at Stadco, and (iii) insufficient accounting resources at Stadco for timely reconciliations and management review[128](index=128&type=chunk) [Unresolved Staff Comments](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - The company reports no unresolved staff comments[130](index=130&type=chunk) [Cybersecurity](index=32&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risks through internal IT staff and third-party providers, with the CEO overseeing efforts and the audit committee providing board-level oversight - The company relies on IT staff and third-party providers to assess, identify, and manage cybersecurity risks[131](index=131&type=chunk) - The Chief Executive Officer is primarily responsible for managing cybersecurity risks, with oversight from the audit committee of the board of directors[134](index=134&type=chunk)[135](index=135&type=chunk) - To date, the company has not encountered cybersecurity challenges that have materially impaired its operations or financial standing[133](index=133&type=chunk) [Properties](index=34&type=section&id=Item%202.%20Properties) The company operates from two primary facilities: an owned 145,000 sq ft facility in Massachusetts for Ranor and a leased 183,000 sq ft complex in California for Stadco - The Ranor segment owns its **145,000 sq. ft. facility** in Westminster, Massachusetts, which is used as collateral for its Berkshire Bank loans[136](index=136&type=chunk) - The Stadco segment leases its **183,000 sq. ft. facility** in Los Angeles, California[137](index=137&type=chunk) [Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) A lawsuit, Ibarra v. Stadco, alleging discrimination and wage violations, was filed in October 2023 and resolved through mediation in June 2024 - A lawsuit, Ibarra v. Stadco, was filed against the company and an employee on October 30, 2023, alleging discrimination and wage violations[139](index=139&type=chunk) - The parties reached a resolution at a mediation on June 26, 2024; the settlement for individual claims was paid in August 2024, and the PAGA settlement was paid in December 2024[139](index=139&type=chunk)[394](index=394&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the registrant - This item is not applicable to the company[140](index=140&type=chunk) [Executive Officers of the Registrant](index=35&type=section&id=Item%204A.%20Executive%20Officers%20of%20the%20Registrant) The company's executive officers are Alexander Shen, Chief Executive Officer since November 2014, and Phillip Podgorski, Chief Financial Officer appointed March 2025 Executive Officers | Name | Age | Position | |---|---|---| | Alexander Shen | 63 | Chief Executive Officer | | Phillip Podgorski | 60 | Chief Financial Officer | - Alexander Shen was appointed CEO on November 14, 2014[142](index=142&type=chunk) - Phillip Podgorski was appointed CFO on March 31, 2025[143](index=143&type=chunk) [Part II](index=36&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "TPCS" with 46 record holders as of June 30, 2025, and no dividends are anticipated due to debt covenants - The company's common stock is traded on the Nasdaq Capital Market under the symbol "TPCS"[146](index=146&type=chunk) - The company has never paid dividends and is prohibited from doing so by its loan agreement with Berkshire Bank[147](index=147&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For fiscal 2025, revenue increased 8% to $34.0 million, but a "going concern" warning persists due to Stadco's losses and debt covenant non-compliance, with management focused on profitability and financing [Results of Operations](index=45&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Results%20of%20Operations) In fiscal 2025, consolidated revenue grew 8% to $34.0 million, driven by Stadco, while a reduced operating loss of $2.2 million resulted from lower SG&A expenses despite Stadco's widening gross loss Consolidated Revenue and Gross Profit by Segment (FY2025 vs FY2024, in thousands) | | 2025 | 2024 | Change ($) | Change (%) | |---|---:|---:|---:|---:| | **Revenue** | | | | | | Ranor | $18,165 | $17,821 | $344 | 2% | | Stadco | $15,998 | $14,567 | $1,431 | 10% | | **Consolidated Revenue** | **$34,031** | **$31,591** | **$2,440** | **8%** | | **Gross Profit (Loss)** | | | | | | Ranor | $5,674 | $4,548 | $1,126 | 25% | | Stadco | ($1,345) | ($430) | ($915) | (213)% | | **Consolidated Gross Profit** | **$4,329** | **$4,118** | **$211** | **5%** | Consolidated SG&A and Operating Loss by Segment (FY2025 vs FY2024, in thousands) | | 2025 | 2024 | Change ($) | Change (%) | |---|---:|---:|---:|---:| | **SG&A Expenses** | | | | | | Consolidated SG&A | $6,487 | $8,750 | ($2,263) | (26)% | | **Operating (Loss) Income** | | | | | | Ranor | $3,129 | $2,287 | $842 | 37% | | Stadco | ($4,643) | ($3,554) | ($1,089) | (31)% | | Corporate and unallocated | ($644) | ($3,365) | $2,721 | 81% | | **Operating Loss** | **($2,158)** | **($4,632)** | **$2,474** | **53%** | Net Loss and EPS (FY2025 vs FY2024) | | 2025 | 2024 | |---|---|---| | Net Loss | ($2,748,000) | ($7,042,000) | | Net Loss per Share | ($0.29) | ($0.81) | [Liquidity, Capital Resources and Going Concern](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-Liquidity%2C%20Capital%20Resources%20and%20Going%20Concern) Substantial doubt about the company's going concern ability persists due to Stadco's losses and debt covenant non-compliance, leading to reclassification of all $7.4 million long-term debt as current - The company's recurring operating losses at Stadco, need for financing, and non-compliance with debt covenants raise substantial doubt about its ability to continue as a going concern[239](index=239&type=chunk) - As of March 31, 2025, the company was not in compliance with the Debt Service Coverage Ratio covenant in its Loan Agreement, resulting in an event of default[234](index=234&type=chunk)[381](index=381&type=chunk) - Due to the default, all long-term debt has been reclassified as current; total debt as of March 31, 2025 was **$7.4 million**[235](index=235&type=chunk)[359](index=359&type=chunk) Selected Liquidity Measures (in thousands) | | March 31, 2025 | March 31, 2024 | |---|---:|---:| | Cash and cash equivalents | $195 | $138 | | Working capital | ($1,570) | ($2,904) | | Total debt | $7,424 | $7,648 | - The Revolver Loan, with a balance of **$3.15 million**, was extended to mature on August 29, 2025[233](index=233&type=chunk)[366](index=366&type=chunk) [EBITDA Non-GAAP Financial Measure](index=58&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations-EBITDA%20Non-GAAP%20Financial%20Measure) The company uses EBITDA, a non-GAAP measure, to evaluate operating performance, reporting a positive EBITDA of $587,000 for fiscal 2025, a significant improvement from the prior year's negative figure Reconciliation of Net Loss to EBITDA (in thousands) | (dollars in thousands) | March 31, 2025 | March 31, 2024 | |---|---:|---:| | Net loss | $ (2,748) | $ (7,042) | | Income tax (benefit) expense | (2) | 1,932 | | Interest expense (1) | 541 | 521 | | Depreciation and amortization | 2,796 | 2,429 | | **EBITDA** | **$ 587** | **$ (2,160)** | [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited consolidated financial statements for fiscal 2025 include an auditor's "going concern" warning due to losses and debt defaults, with notes detailing revenue, tax assets, debt, and segment performance [Report of Independent Registered Public Accounting Firm](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data-Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor's report includes an explanatory paragraph expressing substantial doubt about the company's ability to continue as a going concern due to significant losses and debt covenant non-compliance - The auditor's report contains an explanatory paragraph raising substantial doubt about the Company's ability to continue as a going concern[247](index=247&type=chunk) - Reasons for the going concern uncertainty include significant losses, default on debt obligations due to covenant non-compliance, and a revolving line of credit due within the year[247](index=247&type=chunk) - Revenue recognition for contracts earned over time was identified as a Critical Audit Matter due to the significant judgment required in estimating costs to complete[252](index=252&type=chunk) [Consolidated Financial Statements](index=63&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data-Consolidated%20Financial%20Statements) The consolidated balance sheet as of March 31, 2025, shows negative working capital, while the statement of operations reports a $2.75 million net loss on $34.0 million revenue, and cash flows indicate a net cash increase of $57,000 Consolidated Balance Sheet Highlights (March 31, 2025 vs 2024, in thousands) | | 2025 | 2024 | |---|---:|---:| | Total current assets | $15,346 | $14,850 | | Total assets | $33,527 | $34,747 | | Total current liabilities | $16,916 | $17,754 | | Total liabilities | $24,787 | $26,944 | | Total stockholders' equity | $8,740 | $7,803 | Consolidated Statement of Operations Highlights (FY2025 vs FY2024, in thousands) | | 2025 | 2024 | |---|---:|---:| | Revenue | $34,031 | $31,591 | | Gross profit | $4,329 | $4,118 | | Loss from operations | ($2,158) | ($4,632) | | Net loss | ($2,748) | ($7,042) | Consolidated Statement of Cash Flows Highlights (FY2025 vs FY2024, in thousands) | | 2025 | 2024 | |---|---:|---:| | Net cash (used in) provided by operating activities | ($599) | $728 | | Net cash used in investing activities | ($1,081) | ($2,591) | | Net cash provided by financing activities | $1,737 | $1,467 | | Net increase (decrease) in cash | $57 | ($396) | [Notes to Financial Statements](index=68&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data-Notes%20to%20Financial%20Statements) Key notes detail the going concern uncertainty, revenue disaggregation (99% from defense), a $5.7 million valuation allowance against deferred tax assets, debt covenant violations, and segment performance showing Ranor's profit offset by Stadco's loss - Note 2 reiterates the going concern uncertainty due to recurring losses at Stadco, debt covenant violations, and the need to renew or find alternative financing[280](index=280&type=chunk)[288](index=288&type=chunk) - Note 4 shows that in fiscal 2025, **99% of revenue** was from the defense market and **92% ($31.3 million)** was recognized over time; remaining performance obligations total **$48.6 million**[326](index=326&type=chunk) - Note 5 indicates a valuation allowance of **$5.7 million** against deferred tax assets as of March 31, 2025, as it is more likely than not that these benefits will not be realized[331](index=331&type=chunk) - Note 12 details the company's debt and covenant non-compliance; the company was not in compliance with the debt service and balance sheet leverage tests as of March 31, 2025[376](index=376&type=chunk)[381](index=381&type=chunk) Segment Operating Profit (Loss) (FY2025, in thousands) | Segment | Operating Profit (Loss) | |---|---:| | Ranor | $3,129 | | Stadco | ($4,643) | | Unallocated Items | ($644) | | **Consolidated Operating Loss** | **($2,158)** | [Controls and Procedures](index=100&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were ineffective as of March 31, 2025, due to five material weaknesses, for which a remediation plan is underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[405](index=405&type=chunk) - Management concluded that internal control over financial reporting was not effective as of March 31, 2025, due to five identified material weaknesses[408](index=408&type=chunk)[409](index=409&type=chunk) - The five material weaknesses are: 1) Purchase accounting (Stadco acquisition), 2) Tax accounting (valuation allowance), 3) Stadco accounting (resources and controls), 4) Accounting for impairment of long-lived assets, and 5) Segregation of duties[412](index=412&type=chunk) - A remediation plan is underway, including using tax and valuation specialists, enhancing policies, and centralizing Stadco's accounting functions, but the weaknesses are not yet fully remediated[414](index=414&type=chunk)[416](index=416&type=chunk) [Part III](index=107&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=107&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The five-member Board of Directors includes four independent members, with Mr. Schenker as the audit committee financial expert, and the company has adopted a Code of Ethics and Insider Trading Policy - The Board of Directors is composed of five members, with four determined to be independent: Victor E. Renuart Jr., Robert D. Straus, Andrew A. Levy, and Walter M. Schenker[423](index=423&type=chunk)[491](index=491&type=chunk) - Walter M. Schenker serves as the Chair of the Audit Committee and is designated as the 'audit committee financial expert'[435](index=435&type=chunk) - The company has adopted a Code of Ethics and an Insider Trading Policy to promote compliance with laws and regulations[435](index=435&type=chunk)[436](index=436&type=chunk) [Executive Compensation](index=110&type=section&id=Item%2011.%20Executive%20Compensation) For fiscal 2025, CEO Alexander Shen's total compensation was $337,767, with non-employee directors receiving annual fees and equity awards, and a disconnect noted between pay and performance Summary Compensation Table - Fiscal 2025 | Name and Position | Salary | Bonus | All Other Compensation | Totals | |---|---:|---:|---:|---:| | Alexander Shen, CEO | $334,423 | $500 | $2,844 | $337,767 | | Barbara Lilley, CFO (former) | $120,000 | $500 | $395 | $120,895 | | Richard Roomberg, CFO (former) | $121,795 | $25,500 | — | $147,295 | - CEO Alexander Shen has an employment agreement with a base salary of **$350,000** and is eligible for an annual cash performance bonus targeted at up to **75% of his base salary**[445](index=445&type=chunk) - Non-employee directors receive an annual fee of **$24,000**, with additional fees for the Chairman of the Board (**$20,000**) and committee chairs (**$5,000 to $7,500**)[466](index=466&type=chunk) Pay Versus Performance (Fiscal 2025) | Metric | Value | |---|---| | Compensation Actually Paid – PEO | $337,767 | | Compensation Actually Paid – non-PEO NEO | $258,790 | | Value of Initial $100 Investment (TSR) | $45 | | Net Income (Loss) | ($5,794,760) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=121&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of June 30, 2025, executive officers and directors collectively owned 15.42% of outstanding common stock, with no other known beneficial owners exceeding 5%, and 204,327 securities available for future issuance under equity plans - As of June 30, 2025, all executive officers and directors as a group beneficially owned **1,505,237 shares**, representing **15.42%** of the outstanding common stock[484](index=484&type=chunk) Beneficial Ownership of Key Individuals (as of June 30, 2025) | Name | Shares of common stock | Percentage | |---|---:|---:| | Andrew A. Levy | 417,943 | 4.78% | | Walter M. Schenker | 320,872 | 3.29% | | Alexander Shen | 461,720 | 4.73% | | Robert Straus | 212,721 | 2.18% | - As of March 31, 2024, there were **204,327 securities** available for future issuance under equity compensation plans approved by security holders[487](index=487&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=122&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The Audit Committee reviews and approves all related party transactions, with no material transactions reported since April 1, 2022, and a majority of the board determined to be independent - The Audit Committee is responsible for approving all transactions with related parties[488](index=488&type=chunk) - The company reports no material related person transactions since April 1, 2022[490](index=490&type=chunk) - A majority of the board of directors (**4 out of 5 members**) has been determined to be independent[491](index=491&type=chunk) [Principal Accountant Fees and Services](index=125&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) For fiscal 2025, the company incurred $569,666 in audit fees, an increase from fiscal 2024, with all services pre-approved by the Audit Committee Accountant Fees (for fiscal years ended March 31) | | 2025 | 2024 | |---|---:|---:| | Audit Fees | $569,666 | $502,416 | | Audit related fees | — | — | | Tax fees | — | — | | All other fees | — | — | | **Total** | **$569,666** | **$502,416** | - The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm[496](index=496&type=chunk) [Part IV](index=126&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=126&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including consolidated financial statements and notes, with financial statement schedules omitted as information is provided elsewhere - The report includes the consolidated financial statements for fiscal years 2025 and 2024[499](index=499&type=chunk) - Financial statement schedules are omitted because they are not applicable or the required information is provided elsewhere[499](index=499&type=chunk) - Key exhibits filed include the Stock Purchase Agreement for the terminated Votaw acquisition, the Amended and Restated Loan Agreement with Berkshire Bank and its eleven subsequent amendments, and various employment agreements[500](index=500&type=chunk)[501](index=501&type=chunk)[502](index=502&type=chunk) [Form 10-K Summary](index=136&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary under this item - The company has not provided a summary under this item[506](index=506&type=chunk)

[Company Overview & Key Highlights](index=1&type=section&id=1.%20Company%20Overview%20%26%20Key%20Highlights) TechPrecision, a custom manufacturer, reported strong Q4 and full-year FY2025 financial performance, driven by revenue growth and a substantial backlog [Company Information](index=1&type=section&id=1.1%20Company%20Information) TechPrecision Corporation is a custom manufacturer of precision, large-scale fabrication and machined metal structural components for defense and precision industrial markets, operating through two wholly-owned subsidiaries, Ranor and Stadco - TechPrecision manufactures precision, large-scale fabrication and machined metal structural components[1](index=1&type=chunk) - The company operates through two wholly-owned subsidiaries: Ranor and Stadco, serving defense and precision industrial markets[1](index=1&type=chunk) [Fiscal Year 2025 Fourth Quarter and Year End Highlights](index=1&type=section&id=1.2%20Fiscal%20Year%202025%20Fourth%20Quarter%20and%20Year%20End%20Highlights) TechPrecision reported strong Q4 FY2025 results with significant revenue and gross profit growth, driven by improved performance at both Ranor and Stadco. Full-year revenue also increased, and the company maintains high customer confidence with a substantial backlog Fiscal Year 2025 Fourth Quarter Financial Highlights | Metric | FY25 Q4 (Millions) | Change YoY | | :----------------- | :----------------- | :--------- | | Consolidated Revenue | $9.5 | +10% | | Consolidated Gross Profit | $2.1 | +70% | | Net Income | $0.1 | N/A (vs. loss) | | EPS | $0.01 | N/A (vs. loss) | Fiscal Year 2025 Full Year Financial Highlights | Metric | FY25 Full Year (Millions) | Change YoY | | :----------------- | :------------------------ | :--------- | | Consolidated Revenue | $34.0 | +8% | | Net Loss | $(2.7) | Reduced from $(7.0)M | - Customer confidence remains high with a backlog of **$48.6 million** as of March 31, 2025, expected to be delivered over the next one to three fiscal years with gross margin expansion[3](index=3&type=chunk) [Conference Call Details](index=1&type=section&id=1.3%20Conference%20Call%20Details) The company will host a conference call on Wednesday, July 30, 2025, at 4:30 p.m. ET to discuss the financial results, with replay and webcast options available - Conference call scheduled for July 30, 2025, at 4:30 p.m. ET[2](index=2&type=chunk)[7](index=7&type=chunk) - Replay will be available until August 13, 2025, via dial-in or webcast[8](index=8&type=chunk) [Business Description](index=2&type=section&id=2.%20Business%20Description) TechPrecision Corporation specializes in custom manufacturing of precision, large-scale components for defense and industrial markets through its subsidiaries, Ranor and Stadco [About TechPrecision Corporation](index=2&type=section&id=2.1%20About%20TechPrecision%20Corporation) TechPrecision Corporation specializes in custom manufacturing of precision, large-scale components for defense and industrial markets through its subsidiaries, Ranor and Stadco - TechPrecision Corporation manufactures precision, large-scale fabrication and machined metal structural components[1](index=1&type=chunk)[9](index=9&type=chunk) - The company serves customers in the defense and precision industrial markets[1](index=1&type=chunk) [Ranor Segment](index=2&type=section&id=2.2%20Ranor%20Segment) Ranor, located in North Central Massachusetts, provides custom solutions for precision welded and machined components up to 100 tons, with over 95% of its revenue from the US defense sector and holding ISO 9001:2015 and ITAR compliance - Ranor's operations are in North Central Massachusetts, offering manufacturing engineering, materials management, high-precision heavy fabrication, and machining services for components up to **100 tons**[9](index=9&type=chunk) - Over **95%** of Ranor's revenue is from the US defense sector, and it is ISO 9001:2015 certified and ITAR compliant[10](index=10&type=chunk) [Stadco Segment](index=2&type=section&id=2.3%20Stadco%20Segment) Stadco, based in Los Angeles, California, manufactures large mission-critical components for military aircraft, helicopters, and space programs, serving blue-chip OEMs and prime contractors in defense and aerospace, and is AS 9100 D, ISO 9001:2015, NADCAP, and ITAR compliant - Stadco's operations are in Los Angeles, California, specializing in large mission-critical components for military aircraft, helicopters, and space programs, including tooling and fixtures[11](index=11&type=chunk) - Stadco provides a full range of custom solutions, including high-precision fabrication, machining, and unique electron beam welding and NonDestructive Testing work cells[12](index=12&type=chunk) - Over **60%** of Stadco's revenue is from the defense sector, and it holds AS 9100 D, ISO 9001:2015, NADCAP, and ITAR certifications[14](index=14&type=chunk) [Consolidated Financial Results](index=1&type=section&id=3.%20Consolidated%20Financial%20Results) TechPrecision achieved significant financial improvements in FY2025, turning a Q4 loss into net income and substantially narrowing its full-year net loss, driven by revenue growth and reduced SG&A expenses [Fiscal Year 2025 Fourth Quarter Financial Performance](index=1&type=section&id=3.1%20Fiscal%20Year%202025%20Fourth%20Quarter%20Financial%20Performance) In Q4 FY2025, TechPrecision achieved significant improvements, turning a prior-year loss into net income, driven by a **10%** revenue increase, **70%** gross profit growth, and a **53%** reduction in SG&A costs due to the absence of acquisition-related expenses Q4 FY2025 Consolidated Financial Performance | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | Change (%) | | :----------------- | :----------------- | :----------------- | :--------- | | Revenue | $9.5 | $8.6 | +10% | | Cost of Revenue | $7.4 | $7.4 | <1% | | Gross Profit | $2.1 | $1.2 | +70% | | SG&A | $1.7 | $3.7 | -53% | | Operating Income | $0.4 | $(2.5) | N/A (vs. loss) | | Net Income | $0.1 | $(5.1) | N/A (vs. loss) | - The **53%** decrease in SG&A was primarily due to the absence of due diligence costs for a terminated acquisition[4](index=4&type=chunk) [Fiscal Year 2025 Full Year Financial Performance](index=1&type=section&id=3.2%20Fiscal%20Year%202025%20Full%20Year%20Financial%20Performance) For the full fiscal year 2025, consolidated revenue increased by **8%**, and the net loss significantly narrowed compared to the prior year, primarily due to a **27%** reduction in SG&A expenses and improved gross profit, despite an increase in cost of revenue FY2025 Full Year Consolidated Financial Performance | Metric | FY25 (Millions) | FY24 (Millions) | Change (%) | | :----------------- | :-------------- | :-------------- | :--------- | | Revenue | $34.0 | $31.6 | +8% | | Cost of Revenue | $29.7 | $27.5 | +8% | | Gross Profit | $4.3 | $4.1 | +5% | | SG&A | $6.5 | $8.8 | -27% | | Operating Loss | $(2.2) | $(4.6) | -53% | | Net Loss | $(2.7) | $(7.0) | -61% | - The decrease in operating loss and net loss was primarily driven by the absence of due diligence costs for acquisitions, leading to a **27%** reduction in SG&A[13](index=13&type=chunk) [Financial Position (Balance Sheet Summary)](index=2&type=section&id=3.3%20Financial%20Position%20(Balance%20Sheet%20Summary)) As of March 31, 2025, the company's cash and cash equivalents increased slightly, while working capital remained negative due to long-term debt reclassification. Total debt saw a minor decrease Key Financial Position Metrics | Metric | March 31, 2025 (Millions) | March 31, 2024 (Millions) | | :--------------------- | :------------------------ | :------------------------ | | Cash and Cash Equivalents | $0.2 | $0.1 | | Working Capital | $(1.6) | $(2.9) | | Total Debt | $7.4 | $7.6 | | Total Assets | $33.5 | $34.7 | | Total Liabilities | $24.8 | $26.9 | | Total Stockholders' Equity | $8.7 | $7.8 | - Negative working capital was primarily due to the reclassification of long-term debt because of debt covenant violations[6](index=6&type=chunk) [Segment Performance](index=6&type=section&id=4.%20Segment%20Performance) Both Ranor and Stadco segments contributed to consolidated revenue growth and improved gross profit in Q4 FY2025, with Ranor maintaining profitability and Stadco facing higher production costs for the full year [Fourth Quarter Segment Performance](index=6&type=section&id=4.1%20Fourth%20Quarter%20Segment%20Performance) In Q4 FY2025, both Ranor and Stadco segments contributed to consolidated revenue growth. Ranor's gross profit increased significantly by **51%**, while Stadco's gross profit more than doubled, indicating strong operational improvements in both segments Q4 FY2025 Segment Revenue and Gross Profit | Segment | Q4 FY25 Revenue (Millions) | Q4 FY24 Revenue (Millions) | Revenue Change (%) | Q4 FY25 Gross Profit (Millions) | Q4 FY24 Gross Profit (Millions) | Gross Profit Change (%) | | :------ | :------------------------- | :------------------------- | :----------------- | :------------------------------ | :------------------------------ | :---------------------- | | Ranor | $4.68 | $4.53 | +3% | $1.28 | $0.85 | +51% | | Stadco | $4.86 | $4.63 | +5% | $0.81 | $0.38 | +111% | - Consolidated gross profit expanded by **70%** in Q4, reaching **$2.1 million**, driven by improved operating performance at both Ranor and Stadco[3](index=3&type=chunk)[4](index=4&type=chunk)[22](index=22&type=chunk) [Full Year Segment Performance](index=7&type=section&id=4.2%20Full%20Year%20Segment%20Performance) For the full fiscal year 2025, both Ranor and Stadco segments showed revenue growth, with Stadco's revenue increasing by **10%**. Ranor's gross profit grew by **25%**, offsetting an operating loss at Stadco, which experienced a significant increase in cost of revenue FY2025 Full Year Segment Revenue and Gross Profit | Segment | FY25 Revenue (Millions) | FY24 Revenue (Millions) | Revenue Change (%) | FY25 Gross Profit (Millions) | FY24 Gross Profit (Millions) | Gross Profit Change (%) | | :------ | :---------------------- | :---------------------- | :----------------- | :--------------------------- | :--------------------------- | :---------------------- | | Ranor | $18.17 | $17.82 | +2% | $5.67 | $4.55 | +25% | | Stadco | $16.00 | $14.57 | +10% | $(1.35) | $(0.43) | -213% | - Ranor's segment executed on a favorable project mix, enabling sustained operating profitability for the full year[3](index=3&type=chunk) - Stadco reported an overall operating loss for the fiscal year, with higher production costs contributing to a **15%** increase in its cost of revenue[3](index=3&type=chunk)[13](index=13&type=chunk)[24](index=24&type=chunk) [Financial Statements](index=4&type=section&id=5.%20Financial%20Statements) The financial statements reflect a slight decrease in total assets and liabilities, an increase in stockholders' equity, and a significant improvement in Q4 and full-year net income/loss, with cash flow from financing activities increasing [Consolidated Balance Sheets](index=4&type=section&id=5.1%20Consolidated%20Balance%20Sheets) The consolidated balance sheets show a slight decrease in total assets and liabilities from FY2024 to FY2025, with stockholders' equity increasing. Current liabilities remain higher than current assets, resulting in negative working capital Consolidated Balance Sheet Summary | Metric | March 31, 2025 (Thousands) | March 31, 2024 (Thousands) | | :--------------------- | :------------------------- | :------------------------- | | Total Current Assets | $15,346 | $14,850 | | Total Current Liabilities | $16,916 | $17,754 | | Total Assets | $33,527 | $34,747 | | Total Liabilities | $24,787 | $26,944 | | Total Stockholders' Equity | $8,740 | $7,803 | - Working capital was negative **$1.6 million** on March 31, 2025, primarily due to the reclassification of long-term debt[6](index=6&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=5.2%20Consolidated%20Statements%20of%20Operations) The consolidated statements of operations reflect a significant improvement in Q4 FY2025, moving from a net loss to net income, and a substantial reduction in the full-year net loss, driven by revenue growth and reduced SG&A expenses Consolidated Statements of Operations (Key Figures) | Metric (Thousands) | Q4 FY25 | Q4 FY24 | FY25 | FY24 | | :----------------- | :------ | :------ | :------ | :------ | | Revenue | $9,477 | $8,600 | $34,031 | $31,591 | | Gross Profit | $2,085 | $1,228 | $4,329 | $4,118 | | SG&A | $1,718 | $3,687 | $6,487 | $8,750 | | Operating Income (Loss) | $367 | $(2,459)| $(2,158)| $(4,632)| | Net Income (Loss) | $112 | $(5,121)| $(2,748)| $(7,042)| | EPS (Basic & Diluted) | $0.01 | $(0.59) | $(0.29) | $(0.81) | - The company achieved net income of **$0.1 million** in Q4 FY2025, a significant turnaround from a net loss of **$5.1 million** in the prior-year quarter[4](index=4&type=chunk)[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=5.3%20Consolidated%20Statements%20of%20Cash%20Flows) For FY2025, cash flow from operating activities was negative, while cash used in investing activities decreased. Cash provided by financing activities increased, primarily due to higher proceeds from revolver loans and a private placement, resulting in a net increase in cash and cash equivalents Consolidated Statements of Cash Flows Summary | Cash Flow Activity (Thousands) | FY25 | FY24 | | :----------------------------- | :------ | :------ | | Net cash (used in) provided by operating activities | $(599) | $728 | | Net cash used in investing activities | $(1,081)| $(2,591)| | Net cash provided by financing activities | $1,737 | $1,467 | | Net increase (decrease) in cash and cash equivalents | $57 | $(396) | | Cash and cash equivalents, end of period | $195 | $138 | - Proceeds from revolver loans increased to **$13.88 million** in FY2025 from **$7.16 million** in FY2024, and the company received **$2.30 million** from a private placement[26](index=26&type=chunk) [Non-GAAP Financial Measures](index=9&type=section&id=6.%20Non-GAAP%20Financial%20Measures) This section provides a reconciliation of non-GAAP financial measures, specifically EBITDA, which significantly improved for both Q4 and the full fiscal year 2025, reflecting enhanced operational profitability [EBITDA Reconciliation](index=9&type=section&id=6.1%20EBITDA%20Reconciliation) EBITDA for Q4 FY2025 significantly improved to **$0.96 million** from a negative **$1.79 million** in the prior-year quarter. Full-year EBITDA also turned positive, reaching **$0.59 million** compared to a negative **$2.16 million** in FY2024, reflecting improved operational performance before non-cash and financing impacts EBITDA Reconciliation | Metric (Thousands) | Q4 FY25 | Q4 FY24 | FY25 | FY24 | | :----------------- | :------ | :------ | :---- | :------ | | Net income (loss) | $112 | $(5,121)| $(2,748)| $(7,042)| | Income tax (benefit) expense | $(2) | $2,496 | $(2) | $1,932 |\ | Interest expense | $149 | $169 | $541 | $521 | | Depreciation and amortization | $703 | $670 | $2,796| $2,429 | | EBITDA | $962 | $(1,786)| $587 | $(2,160)| - The significant improvement in EBITDA for both the fourth quarter and full fiscal year indicates a positive shift in core operational profitability[27](index=27&type=chunk) [Forward-Looking Statements](index=3&type=section&id=7.%20Forward-Looking%20Statements) This section outlines the forward-looking nature of certain statements in the release, emphasizing that actual results may differ materially due to various risks and uncertainties, including reliance on purchase orders, external factors, financing availability, competitive pressures, and changes in government spending [Safe Harbor Statement](index=3&type=section&id=7.1%20Safe%20Harbor%20Statement) This section outlines the forward-looking nature of certain statements in the release, emphasizing that actual results may differ materially due to various risks and uncertainties, including reliance on purchase orders, external factors, financing availability, competitive pressures, and changes in government spending - The release contains forward-looking statements based on current expectations, estimates, and projections, which are not guarantees of future performance[16](index=16&type=chunk) - Actual outcomes and results may differ materially due to numerous risks and uncertainties, including reliance on individual purchase orders, external factors (e.g., conflicts, inflation, supply chain), financing, and government spending[16](index=16&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by applicable law[16](index=16&type=chunk)

Revenue and Financial Performance - Consolidated revenue for the three months ended December 31, 2024, was $7,622, a decrease of $28 or less than 1% compared to $7,650 for the same period in 2023[145]. - Ranor's revenue increased by $14 to $4,310 for the three months ended December 31, 2024, reflecting a percentage change of less than 1%[146]. - Stadco's revenue decreased by $58 to $3,312 for the three months ended December 31, 2024, representing a 2% decline[147]. - For the nine months ended December 31, 2024, consolidated revenue was $24,554, a 7% increase compared to $22,991 for the same period in 2023[164]. - Stadco's revenue for the nine months ended December 31, 2024, was $11,139 million, a 12% increase from $9,943 million in the same period of 2023[167]. Profitability and Losses - Consolidated gross profit decreased by $170 to $991 for the three months ended December 31, 2024, resulting in a gross margin of 13%, down from 15% in the same period last year[148]. - Operating loss for the three months ended December 31, 2024, was $696, an improvement of $300 compared to an operating loss of $996 for the same period in 2023[154]. - Ranor's operating income increased by $34 or 3% due to favorable operating execution and throughput[155]. - Stadco's operating loss increased by $340 or 66% due to ongoing production issues impacting throughput[156]. - Operating loss for the nine months ended December 31, 2024, was $2,525 million, a 16% increase compared to the same period in 2023[176]. - Net loss for the nine months ended December 31, 2024, was $2,860 million, or $0.30 per share, compared to a net loss of $1,921 million, or $0.22 per share, in the same period of 2023[183]. - The Company reported a net loss of $799 for the three months ended December 31, 2024, compared to a net loss of $865 for the same period in 2023, reflecting a change of $66[214]. - EBITDA for the three months ended December 31, 2024, was $51, a significant improvement from a negative EBITDA of $364 in the same period of 2023[214]. Backlog and Order Flow - Consolidated backlog as of December 31, 2024, was $45,522, indicating strong project order flow from prime defense contractors[164]. - Ranor's backlog increased to $20,344 million as of December 31, 2024, up from $18,497 million in 2023[166]. Expenses and Cost Management - Consolidated selling, general and administrative expenses decreased by $470 or 22% primarily due to the absence of due diligence work on acquisitions[151]. - Consolidated SG&A expenses decreased by $295 million, or 6%, primarily due to the absence of due diligence work on acquisitions[172]. - The Company plans to closely monitor expenses and may reduce operating costs to enhance liquidity[209]. Liquidity and Capital Management - Total available liquidity as of December 31, 2024, was approximately $330 million, consisting of $165 million in undrawn capacity under the Revolver Loan and $165 million in available cash[185]. - Cash used in operating activities for the nine months ended December 31, 2024, was $995 million, compared to cash provided of $1,180 million in the same period of 2023[189]. - The Company raised approximately $1,801 through a private placement of common stock and warrants to raise working capital[207]. - The Company is exploring various means to strengthen its liquidity position, including making Stadco operations profitable and renewing the revolver loan[206]. - The Company has outstanding debt obligations totaling $7,327 classified as current due to debt covenant violations[215]. - The Revolver Loan maturity has been extended multiple times, with the latest extension to April 30, 2025[203]. - The maturity date of the Revolver Loan was extended from May 24, 2024, to August 30, 2024, with a reduction in the maximum principal amount from $5 million to $4.5 million[127]. Risks and Compliance - The company has faced risks related to reliance on individual purchase orders and external factors such as supply chain inefficiencies and price inflation[107]. - The company is registered and compliant with ITAR, ensuring adherence to U.S. defense regulations[115]. - The uncertainty surrounding recurring operating losses at Stadco raises substantial doubt about the Company's ability to continue as a going concern for at least one year[210]. - The Company acknowledges an Existing Default due to failure to meet the required minimum Debt Service Coverage Ratio for the twelve-month periods ending March 31, 2024, and December 31, 2024[204]. Investments and Capital Expenditures - The company invested $2,796 million in new factory machinery and equipment for the nine months ended December 31, 2024[191]. - The company issued 320,000 shares as a Stock Termination Fee following the termination of the Votaw acquisition agreement[126]. Shareholder Actions - The company entered into a Securities Purchase Agreement on July 3, 2024, selling 521,800 shares and warrants for a total of $1.801 million, aimed at raising working capital[130]. - The company has filed a registration statement with the SEC for the resale of shares, which was declared effective on January 31, 2025[131].

Revenue Performance - Third quarter consolidated revenue was $7.6 million, a decrease of less than 1% compared to $7.7 million in the same period last year[4] - For the nine months ended December 31, 2024, revenue was $24.6 million, a 7% increase compared to $22.99 million in the prior year[7] - Consolidated revenue for the year ended December 31, 2024, was $7,622 million, a decrease of $28 million or approximately 0.4% compared to $7,650 million in 2023[24] - For the nine months ended December 31, 2024, consolidated revenue was $24,554 million, an increase of $1,562 million or 7% from $22,991 million in 2023[26] - Ranor's revenue increased by $14 million to $4,310 million, representing 57% of total revenue, while Stadco's revenue decreased by $58 million to $3,312 million, accounting for 43% of total revenue[24] Profitability - Gross profit for the quarter was $1.0 million, representing a 15% decrease from the previous year[7] - Consolidated gross profit decreased by $170 million to $991 million, resulting in a gross margin of 13%, down from 15% in the previous year[24] - Ranor's gross profit increased by $563 million to $4,266 million, while Stadco reported a gross loss of $2,022 million, a decline of $1,209 million[26] - EBITDA for the three months ended December 31, 2024, was $51 million, a significant improvement from a loss of $364 million in the same period of 2023[29] Costs and Expenses - Cost of revenue increased by 2% to $6.6 million, primarily due to higher production costs at the Stadco segment[7] - Consolidated cost of revenue increased by $142 million to $6,631 million, representing 87% of total revenue, up from 85% in the previous year[24] - SG&A expenses decreased by 22% to $1.7 million due to the absence of due diligence costs for acquisitions[7] Net Loss and Financial Position - Net loss for the quarter was $0.8 million, with a full valuation maintained on deferred tax assets[7] - The net loss for the nine months ended December 31, 2024, was $2,860 million, compared to a net loss of $1,921 million in 2023[28] - Working capital was negative $1.8 million as of December 31, 2024, compared to negative $2.9 million on March 31, 2024[8] - Total debt as of December 31, 2024, was $7.4 million, down from $7.6 million on March 31, 2024[8] - Cash and cash equivalents at the end of the period were $165 million, down from $391 million at the beginning of the period[28] Backlog and Future Expectations - The backlog as of December 31, 2024, was $45.5 million, indicating strong customer confidence[4] - The company expects to deliver its backlog over the next one to three fiscal years with gross margin expansion[4] -

Financial Data and Key Metrics Changes - The company reported its Q2 2025 financial results during the conference call, with specific emphasis on the changes in financial metrics [1][2]. - Management highlighted the importance of understanding the risks and uncertainties associated with forward-looking statements, which may impact actual results [2][3]. Business Line Data and Key Metrics Changes - Specific details regarding the performance of various business lines were not disclosed in the provided excerpts [1][2]. Market Data and Key Metrics Changes - The conference call did not provide detailed market data or key metrics changes relevant to different markets [1][2]. Company Strategy and Development Direction - The company’s strategic direction and competitive positioning were not explicitly discussed in the provided excerpts [1][2]. Management Comments on Operating Environment and Future Outlook - Management acknowledged the potential risks and uncertainties that could affect future performance, emphasizing the need for caution in interpreting forward-looking statements [2][3]. Other Important Information - The company held its Annual Meeting of Stockholders on December 19, 2024, where six directors were elected, indicating ongoing governance and leadership changes [4]. Q&A Session Summary Question: What are the implications of the recent director elections? - The management did not provide specific insights into the implications of the recent director elections during the call [1][2].

Revenue and Financial Performance - Consolidated revenue for the three months ended September 30, 2024, was $8,946 million, a 12% increase from $7,970 million in the same period of 2023[135]. - Ranor's revenue increased by $295 million, or 7%, to $4,790 million, while Stadco's revenue rose by $617 million, or 17%, to $4,223 million[135][136]. - Consolidated revenue for the six months ended September 30, 2024, was $16,932 million, a 10% increase from $15,341 million in the same period of 2023[153]. - Stadco reported revenue of $7,827 for the six months ended September 30, 2024, an increase of $1,254, or 19%, compared to $6,573 for the same period in 2023[156]. Profitability and Losses - Consolidated gross profit decreased by $21 million, or 2%, to $1,014 million, with a gross margin of 11% compared to 13% in the prior year[137]. - Ranor's gross profit increased by $474 million, with a gross margin improvement to 17% from 13% year-over-year[138]. - Stadco reported a gross profit loss of $504 million, with a gross margin of (6)%, down from 0% in the same period last year[139]. - For the three months ended September 30, 2024, the operating loss was $488 million, an improvement of $109 million compared to the operating loss of $597 million in the same period of 2023[143]. - The net loss for the three months ended September 30, 2024, was $601 million, or $0.06 per share, compared to a net loss of $528 million, also $0.06 per share, in the prior year[151]. - The company recorded a net loss of $2,061, or $0.22 per share, for the six months ended September 30, 2024, compared to a net loss of $1,056, or $0.12 per share, for the same period in 2023[170]. - EBITDA for the six months ended September 30, 2024, was negative $425,000, compared to negative $8,000 for the same period in 2023, indicating a decline of $417,000[208]. Operational Highlights - The company has a manufacturing facility of 145,000 square feet in Massachusetts, capable of producing precision components weighing up to 100 tons[104]. - The company primarily targets repeating custom programs with stable designs, focusing on long-term solutions for customers[110]. - The backlog at Ranor increased to $21,714 million as of September 30, 2024, compared to $19,125 million in the same period of 2023[155]. - Stadco's backlog increased to $26,927 as of September 30, 2024, from $25,543 in 2023, indicating strong demand for components related to various programs[157]. Liquidity and Financing - The company entered into a Securities Purchase Agreement on July 3, 2024, selling 521,800 shares and warrants for a total of $1.801 million, aimed at raising working capital[122]. - As of September 30, 2024, total available liquidity was approximately $1,275, consisting of $1,143 in undrawn capacity under the Revolver Loan and $132 in cash[172]. - The company invested $1,622 in new factory machinery and equipment for the six months ended September 30, 2024, down from $2,659 in the same period in 2023[180]. - The Company is exploring various means to strengthen its liquidity position, including making Stadco operations profitable and renewing the revolver loan[199]. - The maturity date of the Revolver Loan has been extended multiple times, with the latest extension to April 30, 2025[193]. Compliance and Regulatory Matters - The company is registered and compliant with ITAR, ensuring adherence to U.S. defense regulations[105]. - The Company acknowledges an Existing Default due to failure to meet the required minimum Debt Service Coverage Ratio for the twelve-month periods ending March 31, 2024, and September 30, 2024[194]. Risks and Challenges - The company has faced risks related to reliance on individual purchase orders and external factors such as supply chain inefficiencies and government regulations[100]. - The uncertainty surrounding recurring operating losses at Stadco raises substantial doubt about the Company's ability to continue as a going concern for at least one year[202]. - The Company plans to monitor expenses closely and may reduce operating costs to enhance liquidity[201].

Revenue Performance - Second quarter consolidated revenue was $8.9 million, a 12% increase compared to $8.0 million in the same period last year[4] - For the six months ended September 30, 2024, revenue was $16.9 million, a 10% increase from $15.3 million in the prior year[13] - Consolidated revenue for the six months ended September 30, 2024, was $16,932 million, a 10% increase from $15,341 million in the same period of 2023[23] - Ranor's revenue increased by 2% to $9,172 million, while Stadco's revenue rose by 19% to $7,827 million for the six months ended September 30, 2024[23] Cost and Profitability - Cost of revenue was $7.9 million, up 14% primarily due to higher production costs at Stadco[5] - Consolidated cost of revenue for the six months ended September 30, 2024, was $15,679 million, reflecting a 15% increase from $13,612 million in 2023[23] - Gross profit was $1.0 million, a 2% decrease compared to the same period a year ago[5] - Consolidated gross profit decreased by 28% to $1,253 million for the six months ended September 30, 2024, compared to $1,729 million in 2023[23] Losses and Financial Position - The company reported a net loss of $0.6 million, maintaining a full valuation on its deferred tax assets[5] - The net loss for the six months ended September 30, 2024, was $2,061 million, compared to a net loss of $1,056 million in the same period of 2023[25] - The operating loss for the six months was $1.8 million, an increase of $0.6 million primarily due to losses at Stadco[13] - EBITDA for the six months ended September 30, 2024, was negative at $(425) million, a decline from $(8) million in 2023[27] Working Capital and Debt - Working capital was negative $1.5 million, with total debt amounting to $7.2 million[7] - Cash and cash equivalents at the end of the period were $132 million, down from $138 million at the beginning of the period[25] - The company reported a significant increase in accounts payable by $1,741 million for the six months ended September 30, 2024[25] Capital Expenditures and Financing - The company incurred $1,622 million in capital expenditures for property, plant, and equipment during the six months ended September 30, 2024[25] - The company raised $1,801 million through a private placement during the financing activities[25] Backlog and Future Expectations - As of September 30, 2024, the company had a backlog of $48.6 million, indicating strong customer confidence[4] - The company expects to deliver its backlog over the next one to three fiscal years with gross margin expansion[4] SG&A Expenses - SG&A expenses totaled $1.5 million, an 8% decrease due to reduced spending on outside advisory services[5]