Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-41698
TechPrecision Corporation
(Exact name of registrant as specified in its charter)
Delaware
51-0539828
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1 Bella Drive
Westminster, MA
01473
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code
(978) 874-0591
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.0001 per share
TPCS
Nasdaq Capital Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
Non-accelerated filer
☒
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
The number of shares outstanding of the registrant’s common stock as of August 6, 2026, was 10,100,311.
TABLE OF CONTENTS
Page
PART I.
FINANCIAL INFORMATION
3
ITEM 1.
FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
19
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
27
ITEM 4.
CONTROLS AND PROCEDURES
PART II.
OTHER INFORMATION
30
LEGAL PROCEEDINGS
ITEM 5.
ITEM 6.
EXHIBITS
31
SIGNATURES
32
2
PART I
ITEM 1. FINANCIAL STATEMENTS
TECHPRECISION CORPORATION
(Unaudited)
June 30,
March 31,
(dollars in thousands, except share and per share data)
2026
ASSETS
Current assets:
Cash
$
279
431
Accounts receivable
3,073
2,488
Contract assets
10,400
10,808
Raw materials
2,025
1,927
Work-in-process
1,155
1,027
Other current assets
396
1,045
Total current assets
17,328
17,726
Property, plant and equipment, net
10,382
10,874
Right of use asset, net
3,407
3,550
Other noncurrent assets
122
Total assets
31,239
32,272
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable
3,452
2,415
Accrued expenses
4,022
3,868
Income taxes payable
Contract liabilities
2,935
2,917
Customer deposits
1,252
Current portion of long-term lease liability
817
800
Current portion of long-term debt, net
4,865
6,884
Total current liabilities
17,374
18,167
Long-term lease liability
2,697
2,864
Other noncurrent liability
3,556
3,568
Total liabilities
23,627
24,599
Commitments and contingent liabilities (see Note 14)
Stockholders’ Equity:
Common stock - par value $.0001 per share, 50,000,000 shares authorized: Shares issued and outstanding: June 30, 2026 – 10,133,261 and 10,100,311; March 31, 2026 – 10,078,381 and 10,024,469, respectively.
1
Additional paid in capital
19,574
19,482
Accumulated deficit
(11,963)
(11,810)
Total stockholders’ equity
7,612
7,673
Total liabilities and stockholders’ equity
See accompanying notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three months ended June 30,
2025
Revenue
9,096
7,379
Cost of revenue
7,696
6,349
Gross profit
1,400
1,030
Selling, general and administrative
1,445
1,493
Loss from operations
(45)
(463)
Other (expense) income
(2)
Interest expense
(106)
(135)
Total other expense, net
(108)
(134)
Loss before income taxes
(153)
(597)
Income tax expense (benefit)
—
Net loss
Net loss per share – basic and diluted
(0.02)
(0.06)
Weighted average number of shares outstanding – basic and diluted
10,100,311
9,757,846
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)
Additional
Total
Common
Par
Paid in
Accumulated
Stockholders’
(dollars in thousands, except share data)
Stock
Value
Capital
Deficit
Equity
Balance March 31, 2025
9,761,825
18,885
(10,146)
8,740
Stock issued for exercised options
15,711
Stock-based compensation
69
Balance June 30, 2025
9,777,536
18,954
(10,743)
8,212
Balance March 31, 2026
10,078,381
Stock issued for restricted awards
54,880
92
Balance June 30, 2026
10,133,261
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended June 30,
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
698
701
Amortization of debt issue costs
14
29
Stock based compensation expense
Change in contract loss provision
178
(250)
Loss on disposal of fixed assets
Changes in operating assets and liabilities:
(585)
(602)
408
510
Work-in-process and raw materials
(226)
(337)
649
85
1,037
(222)
67
18
922
Other noncurrent liabilities
(12)
(129)
Net cash provided by operating activities
1,898
646
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment
(2,436)
(1,250)
Reimbursements for purchases of property, plant and equipment
2,420
2,226
Net cash (used in) provided by investing activities
(16)
976
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issue costs
(13)
(17)
Revolver loan borrowings
6,553
2,755
Revolver loan payments
(8,400)
(4,241)
Payments of principal for leases
(1)
Repayments of long-term debt
(173)
(169)
Net cash used in financing activities
(2,034)
(1,674)
Net decrease in cash
(152)
(52)
Cash - beginning of period
195
Cash - end of period
143
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
Cash paid for interest
91
110
SUPPLEMENTAL INFORMATION - NONCASH INVESTING AND FINANCING TRANSACTIONS:
Three months ended June 30, 2026
In June 2026 Ranor recorded a right-of-use asset and liability of $48 in connection with a signed agreement to lease four copiers over a period of five-years.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(in thousands, except share and per share data)
NOTE 1 - DESCRIPTION OF BUSINESS
TechPrecision Corporation, or “TechPrecision”, is a Delaware corporation organized in February 2005 under the name Lounsberry Holdings II, Inc. On February 24, 2006, we acquired all the issued and outstanding capital stock of our wholly owned subsidiary Ranor, Inc., or “Ranor.” Ranor, together with its predecessors, has been in continuous operation since 1956. The name was changed to TechPrecision Corporation on March 6, 2006.
TechPrecision is the parent company of Ranor, Westminster Credit Holdings, LLC, or “WCH”, Stadco New Acquisition, LLC, or “Acquisition Sub”, and Stadco. TechPrecision, Ranor, WCH, Acquisition Sub and Stadco are collectively referred to as the “Company”, “we”, “us” or “our”.
We are a custom manufacturer of precision, large-scale fabrication components and precision, large-scale machined metal structural components. The components that we manufacture are customer designed. We sell to customers in two main industry sections: defense and precision industrial markets.
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation - The accompanying condensed consolidated financial statements include the accounts of TechPrecision, Ranor, Stadco, and WCH. Intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated balance sheet as of June 30, 2026, the condensed consolidated statements of operations and stockholders’ equity for the three months ended June 30, 2026 and 2025, and the condensed consolidated statements of cash flows for the three months ended June 30, 2026 and 2025 are unaudited, and, in the opinion of management, include all adjustments that are necessary for a fair presentation of our financial statements for interim periods in accordance with U.S. Generally Accepted Accounting Principles, or “U.S. GAAP”. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The results of operations for an interim period are not necessarily indicative of the results of operations to be expected for the fiscal year.
These notes to the condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or the “SEC”, for Quarterly Reports on Form 10-Q. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements and related notes should be read in conjunction with the consolidated financial statements included with our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, filed with the SEC on June 25, 2026.
Use of Estimates in the Preparation of Financial Statements - In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenue and expenses during the reporting period. We continually evaluate our estimates, including those related to revenue recognition, income taxes and long-lived assets. We base our estimates on historical and current experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates.
Liquidity and Going Concern - For the three months ended June 30, 2026 and 2025, we reported pre-tax losses of $153 and $597, respectively.
On August 25, 2021, Ranor, Inc. along with certain affiliates of the Company, or the “Borrowers”, entered into that certain Amended and Restated Loan Agreement with the Berkshire Bank, or the “Loan Agreement”. Under the Loan Agreement, Beacon Bank & Trust, successor by merger to Berkshire Bank, or the “Bank”, continued to provide the Ranor Term Loan (as defined below) and the revolving line of credit, or the “Revolver Loan”, under which, among other things, the Bank provided a revolving line of credit loan to the Borrowers which currently has a maximum principal amount of $4,500.
As of June 30, 2026, we had $2,067 in total available liquidity, consisting of $279 in cash, and $1,788 in undrawn capacity under our revolver loan. As of March 31, 2026, we had $1,485 in total available liquidity, consisting of $431 in cash, and $1,054 in undrawn capacity under our revolver loan.
On May 13, 2026, Ranor and the other Borrowers entered into a Fourteenth Amendment to Amended and Restated Loan Agreement and Tenth Amendment to Second Amended and Restated Promissory Note with the Bank. The Amendment, among other things, extends the maturity date of the Revolver Loan from May 15, 2026 to September 15, 2026.
The Company acknowledges that a certain event of default has occurred and is continuing under the Loan Agreement (as defined below) as a result of the Company’s failure to satisfy the balance sheet leverage covenant as of June 30, 2026 and March 31, 2026. The lender reserves any and all rights and remedies available to it under the Loan Agreement, including, without limitation, its right to choose to accelerate and demand the outstanding indebtedness evidenced by the loan documents, and to seek immediate repayment in full. The lender could also stop honoring drawdowns under the revolver loan.
There was $5,017 outstanding under the Loan Agreement on June 30, 2026. Without a waiver, the lender has the right, but not the obligation, to demand repayment from the Company for noncompliance with the debt covenants. In addition, the Bank retains the right to act on covenant violations that occur after the date of delivery of any waiver. The lender has not granted us a waiver. As such, we need to seek alternative financing to pay these obligations as the Company does not have existing facilities or sufficient cash on hand to satisfy these obligations. It is also probable that the Company will not be in compliance with the same debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our condensed consolidated balance sheet.
The Company continues to explore various means of strengthening its liquidity position and ensuring compliance with its debt financing covenants by improving the operating profitability at Stadco, renewing our revolver loan, or entering into alternative debt facilities.
In order for us to continue operations beyond the next twelve months from the date of issuance of the financial statements and to be able to discharge our liabilities and commitments in the normal course of business, we must renew our revolver loan or seek alternative financing by September 15, 2026. The bank retains the right to act on covenant violations and is under no obligation to allow draws on the revolver through the expiration date. We must mitigate our recurring operating losses at our Stadco subsidiary, efficiently increase utilization of our manufacturing capacity at Stadco and improve the manufacturing process. We plan to closely monitor our expenses and, if required, will reduce operating costs to enhance liquidity.
The uncertainty associated with the recurring operating losses at Stadco, the revolver loan renewal, the need for alternative financing, and compliance with debt covenants at subsequent measurement dates raise substantial doubt about our ability to continue as a going concern for at least one-year after the date the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.
The condensed consolidated financial statements for the three months ended June 30, 2026, were prepared on the basis of a going concern which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should we be required to liquidate assets. Our ability to satisfy our current liabilities and to continue as a going concern is dependent upon the Company’s compliance with the debt covenants, renewing the revolver loan, and its ability to grow revenue and reduce costs at Stadco. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
New Accounting Standards Recently Adopted
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide all entities with a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this update affect entities that apply the practical expedient when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted the amendments in this update on April 1, 2026.
New Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40), Disaggregation of Income Statement Expenses. The ASU will require the Company to provide more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of revenue, SG&A, and research and development). The ASU does not change the expense captions an entity presents on the face of the income statement. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating this update to determine the impact it may have on the disclosures to its condensed consolidated financial statements.
8
NOTE 3 - REVENUE
The Company generates revenue primarily from performance obligations completed under contracts with customers in two main market sectors: defense and precision industrial. The period over which the Company performs its obligations can be between three and thirty-six months. The Company invoices and receives related payments based upon performance progress not less frequently than monthly.
Revenue is recognized over-time or at a point-in-time given the terms and conditions of the related contracts. The Company utilizes an input methodology based on estimated labor hours to measure performance progress. This model best depicts the transfer of control to the customer. The Company’s contract portfolio is comprised of fixed-price contracts and provide for product type revenue only.
The following table presents revenue on a disaggregated basis by market and contract type:
Revenue by market
Defense
Industrial
Totals
8,966
130
Three months ended June 30, 2025
Revenue by contract type
Over-time
Point-in-time
8,870
226
6,685
694
As of June 30, 2026, the Company had $52,681 of remaining performance obligations, of which $46,997 was less than 50% complete. The Company expects to recognize all its remaining performance obligations as revenue within the next thirty-six months.
We are dependent each year on a small number of customers who generate a significant portion of our business, and these customers change from year to year. The following table sets forth revenues from customers who accounted for more than 10% of our revenue for the periods ended:
Three months ended
June 30, 2026
June 30, 2025
Customer
Amount
Percent
A
1,441
16
%
1,126
15
B
*
C
1,845
25
D
1,655
E
1,590
21
F
1,080
12
711
10
G
*Less than 10% of total
The following table displays total revenue generated by the individual customers in the above table by segment that accounted for 10% or more of our revenue for the periods indicated:
Segment
Ranor
2,471
3,202
43
Stadco
1,705
2,070
28
In our condensed consolidated balance sheet, contract assets and contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets consist of the following as of:
Progress
Unbilled
Payments
26,780
(16,380)
March 31, 2026
26,415
(15,607)
9
For the three months ended June 30, 2026 and 2025, we recognized revenue of $2,270 and $676 related to our contract liabilities as of the opening balances on April 1, 2026 and 2025. Contract liabilities consist of the following as of:
Opening
Obligations
Closing
Balance
Billed
Satisfied
20,624
(20,606)
1,040
20,528
(18,651)
NOTE 4 - INCOME TAXES
We account for income taxes under Accounting Standards Codification (“ASC”) 740, Income Taxes. The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings before taxes, adjusted for the impact of discrete quarterly items.
Our taxes are measured at the U.S. statutory income tax rate of 21%. For the three months ended June 30, 2026, there was no change in our judgment about the realizability of deferred tax assets in future years, and, therefore, no expense or benefit provided for income taxes.
In assessing the recoverability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have determined that it is more likely than not that certain future tax benefits may not be realized. The assessment was based on the weight of negative evidence at the balance sheet date, our recent operating losses and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels. Accordingly, a valuation allowance has been recorded against deferred tax assets that are unlikely to be realized. Realization of deferred tax assets will depend on the generation of sufficient taxable income in the appropriate jurisdictions, the reversal of deferred tax liabilities, tax planning strategies and other factors prior to the expiration date of the carryforwards. A change in the estimates used to make this determination could require an increase or a reduction in the valuation allowance currently recorded against those deferred tax assets. The valuation allowance on deferred tax assets was approximately $6,100 at June 30, 2026 and $6,200 at March 31, 2026. We believe that it is more likely than not that the benefit from certain NOL carryforwards and other deferred tax assets will not be realized.
NOTE 5 - EARNINGS PER SHARE (EPS)
Basic EPS is computed by dividing reported earnings available to stockholders by the weighted average number of shares outstanding. Diluted EPS also includes the effect of stock options, warrants and restricted stock that would be dilutive. The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations for the periods indicated:
Three Months ended
Basic and diluted EPS
Weighted average shares – basic and diluted
The following table depicts all potential common stock equivalents that have an anti-dilutive effect and are excluded from the calculation of diluted EPS (i.e., those that increase income per share or decrease loss per share), for the periods indicated:
Stock options
300,000
542,500
Warrants
686,083
711,083
Restricted stock
32,950
10,000
NOTE 6 - STOCK-BASED COMPENSATION
Our board of directors, upon the recommendation of the compensation committee of our board of directors, approved the 2016 TechPrecision Equity Incentive Plan, or the “2016 Plan”, on November 10, 2016. Our stockholders approved the 2016 Plan at the Company’s Annual Meeting of Stockholders on December 8, 2016. We have designed the 2016 Plan to reflect our commitment to having best practices in both compensation and corporate governance. The Plan shall terminate on the 10-year anniversary of the effective date, and no Awards under the Plan shall thereafter be granted.
The 2016 Plan authorizes the award of incentive and non-qualified stock options, restricted and unrestricted stock awards, restricted stock units, and performance awards to employees, directors, consultants, and other individuals who provide services to TechPrecision or its affiliates. The purpose of the 2016 Plan is to enable TechPrecision and its affiliated companies to recruit and retain highly qualified employees, directors, and consultants; and to provide those employees, directors, and consultants with an incentive for productivity, and an opportunity to share in the growth and value of the Company. Subject to adjustment as provided in the 2016 Plan, the maximum number of shares of common stock that may be issued with respect to awards under the 2016 Plan is 1,250,000 (inclusive of awards issued under the 2006 Long-Term Incentive Plan, or the “2006 Plan”, that remained outstanding as of the effective date of the 2016 Plan). Shares of our common stock subject to awards that expire unexercised or are otherwise forfeited shall again be available for awards under the 2016 Plan.
The fair value of the options we grant is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stock. The average dividend yield over the historical period for which volatility was computed is zero. The risk-free interest rate was selected based upon yields of five-year U.S. Treasury issues. We used the simplified method for all grants to estimate the expected life of the option. We assume that stock options will be exercised evenly over the period from vesting until the awards expire. We account for award forfeitures as they occur. As such, the assumed period for each vesting tranche is computed separately and then averaged together to determine the expected term for the award. On June 30, 2026, there were 60,635 shares available for grant under the 2016 Plan. The following table summarizes information about options exercised during the three months ended June 30, 2026:
Weighted
Average
Aggregate
Remaining
Number Of
Intrinsic
Contractual Life
Options
Exercise Price
(in years)
Outstanding at March 31, 2026
2.11
630,462
1.24
Outstanding at June 30, 2026
938,000
1.02
Vested or expected to vest at June 30, 2026
Exercisable and vested at June 30, 2026
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price and the exercise price multiplied by the number of in-the-money options on the measurement date) that would have been received by the option holders had all option holders exercised their options on March 31, 2026 and June 30, 2026. This amount changes based on the fair value of the Company’s common stock. At June 30, 2026, there was no remaining unrecognized compensation cost related to stock options. The maximum contractual term is ten years for option grants. Other information relating to stock options outstanding at June 30, 2026 is as follows:
Contractual
Range of Exercise Prices:
Outstanding
Term
Exercisable
$2.00-$2.99
11
Stock Awards
On August 3, 2023, we issued 15,000 shares of restricted common stock to our former chief financial officer. Under the terms of the employment agreement, provided employment with the Company continues from the grant date through the applicable vesting dates, 5,000 shares of the restricted stock will vest on each of the first, second, and third anniversaries of the effective employment date of July 17, 2023. Fair value of $111 was measured on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. Stock-based compensation expense will be recognized ratably over the vesting period. Total recognized compensation cost related to this award for the three months ended June 30, 2026 was $9. There was no remaining unrecognized compensation cost related to this award on June 30, 2026.
On January 24, 2025, pursuant to the 2016 Plan, we awarded 54,880 shares, in the aggregate, of restricted common stock to our four non-employee directors. The common stock vested and become nonforfeitable on December 19, 2025. Fair value of $180 was measured on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. Stock-based compensation expense was recognized ratably over the vesting period. There was no remaining unrecognized compensation cost related to this award on June 30, 2026.
Pursuant to the announcement of our newly appointed CFO on March 31, 2025, or the transition date, the Company agreed to grant in the amount of $180 restricted shares of the Company’s common stock, or 78,261 shares, based on the stock closing price of $2.30 on the transition date. The fair value of $180 will be amortized ratably over a three-year vesting period, following the transition date. Stock-based compensation expense of $15 was recognized for the three months ended June 30, 2026. There is $105 of remaining unrecognized compensation cost under this award expected to be recognized over the next twenty-one months.
On March 6, 2026, pursuant to the 2016 Plan, the Company issued 67,049 shares, in the aggregate, of common stock to non-employee directors as compensation awards for services rendered in fiscal year 2026 pursuant to agreements with each of the recipients. There were 18,137 shares that were vested immediately, and 48,912 shares that will vest on October 28, 2026. Stock-based compensation expense of $68 was recognized for the three months ended June 30, 2026. There is $90 of remaining unrecognized compensation cost under this award expected to be recognized over the next four months.
NOTE 7 - CONCENTRATION OF CREDIT RISK
We maintain bank account balances, which, at times, may exceed insured limits. We have not experienced any losses with these accounts and believe that we are not exposed to any significant credit risk on cash.
On June 30, 2026, there were trade accounts receivable balances outstanding from two customers comprising 71% of the total trade receivables balance. The following table sets forth information as to trade accounts receivable from customers who accounted for more than 10% of our accounts receivable balance as of:
528
17
1,667
54
1,159
47
335
13
*less than 10% of total
NOTE 8 - OTHER CURRENT ASSETS
Other current assets included the following as of:
Prepaid insurance
135
255
Prepaid subscriptions
172
190
Prepaid taxes
Supplier advances
23
535
Deposits
20
Other
42
NOTE 9 - PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net included the following as of:
Land
Building and improvements
3,294
Machinery equipment, furniture, and fixtures
25,716
25,723
Construction-in-progress
147
Total property, plant, and equipment
29,267
29,274
Less: accumulated depreciation
(18,885)
(18,400)
Total property, plant and equipment, net
For the three months ended June 30, 2026 and 2025, we recorded depreciation expense of $506 and $519, respectively. For the three months ended June 30, 2026 our Ranor segment recorded a disposal with a book value of $2.
The Company has a signed agreement to make equipment upgrades for a certain customer. We recognize new purchases as a fixed asset and billings for reimbursement from the customer as a contra-asset. Future depreciation of the asset will be offset directly by the amortization of the contra-asset on a net basis in the statement of operations. The amortization period will match the schedule of depreciation set forth under our policies.
NOTE 10 - ACCRUED EXPENSES
Accrued expenses included the following as of:
Accrued compensation
1,394
1,449
Provision for claims
251
217
Provision for contract losses
357
Accrued professional fees
439
546
Accrued project costs
1,299
1,186
104
113
Accrued compensation includes amounts for executive bonuses, payroll and vacation and holiday pay. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in the provision are recorded in cost of revenue. Accrued project costs are estimates for certain project expenses during the reporting period.
NOTE 11 - DEBT
Long-term debt included the following as of:
Stadco Term Loan, at 3.79% interest, due August 2028
1,355
1,504
Ranor Term Loan, at 6.05% interest, due December 2027
2,063
2,081
Ranor Revolver Loan, due September 2026
1,599
3,446
Stadco equipment financing, at 13.38% interest, due April 2026
Total debt
5,017
7,037
Less: debt issue costs unamortized
152
153
Total debt, net
Less: Current portion of long-term debt
Total long-term debt, net
Amended and Restated Loan Agreement
On August 25, 2021, the Company entered into the Loan Agreement. Under the Loan Agreement, the Bank will continue to provide the Ranor Term Loan and the revolving line of credit, or the Revolver Loan. In addition, the Bank provided the Stadco Term Loan (as defined below) in the original amount of $4,000. The proceeds of the original Ranor Term Loan of $2,850 were used to refinance existing mortgage debt at Ranor. The proceeds of the Revolver Loan are used for working capital and general corporate purposes of the Company. The proceeds of the Stadco Term Loan were to be used to support the acquisition of Stadco and refinance existing indebtedness of Stadco.
Through January 12, 2026, Ranor and certain affiliates of the Company entered into thirteen separate amendments to the Amended and Restated Loan Agreement and First Amendment to Promissory Note that extended the maturity date of the Ranor Term Loan and Revolver Loan to December 15, 2027 and May 15, 2026, respectively.
Stadco Term Loan
On August 25, 2021, Stadco borrowed $4,000 from the Bank, or the “Stadco Term Loan”. Interest on the Stadco Term Loan is due on unpaid balances at a fixed rate per annum equal to the 7 - year Federal Home Loan Bank of Boston Classic Advance Rate plus 2.25%. Since September 25, 2021 and on the 25th day of each month thereafter, Stadco had made and will make monthly payments of principal and interest in the amount of $54 each, with all outstanding principal and accrued interest due and payable on August 25, 2028. Interest shall be calculated based on actual days elapsed and a 360-day year.
Unamortized debt issue costs on June 30, 2026 and March 31, 2026 were $1 and $3, respectively.
Ranor Term Loan and Revolver Loan
A term loan was made to Ranor by the Bank in 2016 in the amount of $2,850, or the “Ranor Term Loan”. Payments are made in monthly installments of $17 each, inclusive of interest at a fixed rate of 6.05% per annum, with all outstanding principal and accrued interest due and payable on December 15, 2027.
The Company agrees to pay the Bank, as consideration for the Bank’s agreement to make the Revolver Loan available, a nonrefundable Revolver Loan fee equal to 0.25% per annum (computed based on a year of 360 days and actual days elapsed) on the difference between the amount of: (a) $4,500, and (b) the average daily outstanding balance of the Revolver Loan during the quarterly period then ended. All Revolver Loan fees are payable quarterly in arrears on the first day of each January, April, July and October and on the Revolver Maturity Date, or upon acceleration of the Revolver Loan, if earlier. Interest-only payments on advances made under the Revolver Loan will continue to be payable monthly in arrears. Under the amended promissory note for the Revolver Loan, the Company pays interest at the Term SOFR-based rate.
Between December 20, 2021 and May 13, 2026, Ranor and the other borrowers entered into fourteen separate amendments with the Bank to, among other things, extend the maturity date of the Revolver Loan to September 15, 2026.
Paid and accrued interest expense under the Revolver Loan during the three months ended June 30, 2026 and 2025 was $40 and $53, respectively. The weighted average interest rate as of June 30, 2026 and March 31, 2026 was 6.26% and 6.70%, respectively. The weighted average amount outstanding during the three months ended June 30, 2026 was $2,498. There was $1,599 outstanding under the Revolver Loan as of June 30, 2026. Unused borrowing capacity as of June 30, 2026 and March 31, 2026 was $1,788 and $1,054, respectively.
Unamortized debt issue costs on June 30, 2026 and March 31, 2026 were $151 and $150, respectively.
Loan Covenants
For purposes of this discussion, Ranor and Stadco are referred to together as the “Borrowers”. The Company agreed to maintain compliance with certain financial covenants under the Loan Agreement. Namely, the Borrowers agree to maintain the ratio of the Cash Flow of TechPrecision-to-the Total Debt Service of TechPrecision of not less than 1.20 to 1.00, measured quarterly on the last day of each fiscal quarter, or annual period of TechPrecision on a trailing 12-month basis. Calculations will be based on the audited (year-end) and unaudited (quarterly) consolidated financial statements of TechPrecision. Quarterly tests are measured based on the financial statements included in the Company’s quarterly reports on Form 10-Q within 60 days of the end of each quarter, and annual tests will be measured based on the financial statements included in the Company’s annual reports on Form 10-K within 120 days after the end of each fiscal annual period. Cash Flow means an amount, without duplication, equal to the sum of net income of TechPrecision plus (i) interest expense, plus (ii) taxes, plus (iii) depreciation and amortization, plus (iv) stock based compensation expense taken by TechPrecision, plus (v) non-cash losses and charges and one time or non-recurring expenses at the Bank’s discretion, less (vi) the amount of cash distributions, if any, made to stockholders or owners of TechPrecision, less (vii) cash taxes paid by the TechPrecision, all as determined in accordance with U.S. GAAP. “Total Debt Service” means an amount, without duplication, equal to the sum of (i) all amounts of cash interest paid on liabilities, obligations, and reserves of TechPrecision paid by TechPrecision, (ii) all amounts paid by TechPrecision in connection with current maturities of long-term debt and preferred dividends, and (iii) all payments on account of capitalized leases, all as determined in accordance with U.S. GAAP.
The Borrowers agreed to cause their Balance Sheet Leverage to be less than or equal 2.50 to 1.00. For purposes of this covenant, “Balance Sheet Leverage” means, at any date of determination, the ratio of Borrowers’ (a) Total Liabilities, less Subordinated Debt, to (b) Net Worth, plus Subordinated Debt.
The Borrowers agree to maintain a Loan-to-Value Ratio of not greater than 0.75 to 1.00. “Loan-to-Value Ratio” means the ratio of (a) the sum of the outstanding balance of the Ranor Term Loan and the Stadco Term Loan to (b) the fair market value of the property pledged as collateral for the loan, as determined by an appraisal obtained from time to time by the Bank, but not more frequently than one time during each 365 day period (provided that the Bank may obtain an appraisal at any time after either the Ranor Term Loan or the Stadco Term Loan has been accelerated), which appraisals shall be at the expense of the Borrowers.
The Borrowers agree that their combined annual capital expenditures shall not exceed $1,500. Compliance shall be tested annually. On June 12, 2023, the Company and the Bank executed a waiver under which the Bank waived the Company’s noncompliance with the capital expenditure limit and acknowledged that specified capital expenditures can be excluded from the calculation of the Borrowers combined annual expenditures for the fiscal year ended March 31, 2024. For the fiscal years ended March 31, 2026 and 2025, the Company, including specified capital expenditures, exceeded combined annual capital expenditures of $1,500.
As of June 30, 2026, the Company was not in compliance with the balance sheet leverage covenant. The Company was also not in compliance with the balance sheet leverage covenant as of March 31, 2026 and 2025. The Bank retains the right to act on covenant violations that occur after the date of delivery of any waiver. The lender has not granted us a waiver. It is also probable that the Company will not be in compliance with the balance sheet leverage and other debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our condensed consolidated balance sheet.
Collateral securing all the above obligations comprises all personal and real property of the Company, including cash, accounts receivable, inventories, equipment, and financial assets. The Company’s short-term and long-term debt is all privately held with no public market for this debt and is considered to be Level 3 under the fair value hierarchy. The carrying value of short and long-term borrowings approximates their fair value.
Stadco Equipment Financing
Stadco entered into a two-year equipment financing agreement dated May 1, 2024 to purchase certain computer hardware for $65. On the last day of each month, Stadco made monthly payments of $3, with all remaining outstanding amounts due and paid in full on April 30, 2026.
NOTE 12 - OTHER NONCURRENT LIABILITIES
Under an addendum to a contract purchase order, one of our customers agreed to reimburse the Company for the cost of certain new equipment. Payments are received as the Company incurs construction costs. All payments have been received under this contract. In case of a contract breach, at the time of the breach, the customer may claw back the funds based on a prorated ten-year straight-line annual declining balance recovery period. This liability amount is included in the Company’s condensed consolidated balance sheets as a noncurrent liability.
We also signed contracts to purchase new equipment for another customer who agreed to reimburse the Company for the cost of the equipment. We received the first payment in fiscal 2024, with additional payments received during fiscal 2025 and 2026. Advance payments from the customer accrue in the Company’s condensed consolidated balance sheets as a noncurrent liability.
As of June 30, 2026 and March 31, 2026, a total of $2,793 and $2,793, in the aggregate, was included in other noncurrent liabilities under the programs described above.
In fiscal year 2023, Stadco entered into an agreement with the Los Angeles Department of Water and Power, or “LADWP”, to settle previously outstanding amounts for water, water service, electric energy and/or electric service in the aggregate amount of $1,800 that were delinquent and unpaid. Under the agreement, on December 15, 2022, Stadco began to make monthly installment payments on the unpaid balance beginning in an aggregate amount of $18 per month until the earlier of November 15, 2030, or the amount due is paid in full. Late payments will accrue a late payment charge equal to an 18% annual rate on the unpaid balance. This liability amount was included in the Company’s condensed consolidated balance sheet as a current and noncurrent liability as of June 30, 2026 and March 31, 2026, for $254 and $763, and $221 and $775, respectively.
NOTE 13 - LEASES
Stadco is a party to an amended building and property operating lease and a right of use asset. Monthly base rent for the property is $78 per month. The term of the lease will expire on June 30, 2030, and the lessee has no right of renewal beyond the expiration date. The lease contains customary default provisions allowing the landlord to terminate the lease if the lessee fails to remedy a breach of its obligations under the lease within the period specified in the lease, or upon certain events of bankruptcy or seizure or attachment of the lessee’s assets or interest in the lease. The lease also contains other customary provisions for real property leases of this type.
In June 2026 Ranor signed an agreement to lease four copiers over a period of five-years. The equipment was placed in service July 2026. We pay $2 each month in total under two separate finance leases.
The following table lists our right-of-use assets and liabilities on our condensed consolidated balance sheets at:
Right of use asset – operating lease
6,629
Right of use asset – finance leases
94
Amortization
(3,316)
(3,171)
Right of use assets, net
Lease liability – operating lease
3,443
3,639
Lease liability – finance leases
71
Total lease liability
3,514
3,664
Other supplemental information regarding our leases is contained in the following tables:
Components of lease expense for the three months ended:
Operating lease amortization
189
180
Finance lease amortization
Finance lease interest
Weighted average lease term and discount rate on:
Lease term (years) – operating lease
4.25
5.00
Lease term (years) – finance lease
4.75
0.75
Lease rate – operating lease
4.5
Lease rate – finance lease
7.3
3.2
Supplemental cash flow information related to leases for the three months ended :
Cash used in operating activities
235
Cash used in financing activities
Maturities of lease liabilities on June 30, 2026 for the next five years:
July 1, 2026 – June 30, 2027
957
July 1, 2027 – June 30, 2028
July 1, 2028 – June 30, 2029
July 1, 2029 – June 30, 2030
July 1, 2030 – June 30, 2031
Total lease payments
3,840
Less: imputed interest
326
NOTE 14 - COMMITMENTS AND CONTINGENT LIABILITIES
Employment Agreements
We have employment agreements with each of our executive officers. Such agreements provide for minimum salary levels, adjusted annually, and incentive bonuses that are payable if specified company goals are attained. The aggregate commitment at June 30, 2026 for future executive salaries was $615.
Purchase Commitments
As of June 30, 2026, we had $3,378 in purchase obligations outstanding, which primarily consisted of contractual commitments to purchase new materials and supplies expected to be used over the next twelve months. We also have $14,463 in purchase obligations outstanding for the purchase of machinery and equipment under an arrangement with a certain customer as described above in Note 12-Noncurrent liabilities. The company will be reimbursed in full by the customer for all purchases.
Retirement Benefits
The Company has two defined contribution and savings plans that cover substantially all employees who have completed 90 days of service. Ranor retains the option to match employee contributions. The Company contributed $27 and $17 for the three months ended June 30, 2026 and 2025, respectively.
NOTE 15 - SEGMENT INFORMATION
The Company has two wholly owned subsidiaries, Ranor and Stadco, each a reportable segment. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. All the Company’s operations, assets, and customers are located in the U.S. Each reportable segment focuses on the manufacture and assembly of specific components, primarily for defense, aerospace and other precision industrial customers.
Our Chief Executive Officer, or CEO, is the Chief Operating Decision Maker, or CODM, and evaluates the performance of our segments based upon, among other things, segment revenue and operating profit. The operating profit metric is what the CODM uses in evaluating segment results of operations and the financial measure that provides insight into our overall performance and financial position.
Segment operating profit includes executive, sales and marketing compensation, and other administrative and corporate expenses allocated equally to each segment based on a revenue run rate. The following table provides summarized financial information for our segments:
5,461
4,064
9,525
4,297
3,332
7,629
Intersegment elimination
(429)
(55)
(195)
Revenue, net
3,635
4,242
3,137
3,901
3,795
2,749
3,600
Selling, general, and administrative (1)
644
676
1,320
652
735
1,387
Income (loss) from operations
916
(836)
80
841
(1,198)
(357)
Reconciliation of profit or loss:
Unallocated items:
Corporate general costs (2)
(125)
Consolidated operating loss
Other income (expense), net
Consolidated loss before income taxes
260
438
259
442
Capital expenditures
2,436
1,250
11,410
19,829
10,744
21,398
32,142
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Statement Regarding Forward Looking Disclosure
The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes, which appear elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q, including this section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may contain predictive or “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of current or historical fact contained in this quarterly report, including statements that express our intentions, plans, objectives, beliefs, expectations, strategies, predictions, or any other statements relating to our future activities or other future events, or conditions are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “should,” “would” and similar expressions, as they relate to us, are intended to identify forward-looking statements.
These forward-looking statements are based on current expectations, estimates and projections made by management about our business, our industry and other conditions affecting our financial condition, results of operations or business prospects. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, the forward-looking statements due to numerous risks and uncertainties. As discussed below under “Liquidity, Capital Resources and Going Concern”, certain events and conditions, when examined in the aggregate, indicate substantial doubt about our ability to continue as a going concern for at least one year beyond the date of the financial statements. Factors that could cause such outcomes and results to differ include, but are not limited to, risks and uncertainties arising from:
Overview
We have two wholly owned subsidiaries that are each a reportable segment, Ranor and Stadco. Each reportable segment focuses on the manufacture and assembly of specific components, primarily for defense and other precision industrial customers.
The manufacturing operations of our Ranor subsidiary are situated on approximately 65 acres in North Central Massachusetts. Leveraging our 145,000 square foot facilities, Ranor provides a full range of custom solutions to transform material into precision finished welded components and precision finished machined components up to 100 tons: manufacturing engineering, materials management and traceability, high-precision heavy fabrication (in-house fabrication operations include cutting, press and roll forming, welding, heat treating, assembly, blasting and painting), heavy high-precision machining (in-house machining operations include CNC programming, finishing, and assembly), QC inspection including portable CMM, NonDestructive Testing, and final packaging.
All manufacturing at Ranor is performed in accordance with customer requirements. Ranor is an ISO 9001:2015 certificate holder. Ranor is a U.S. defense-centric company with over 95% of its revenue in the defense sector. Ranor is registered and compliant with ITAR.
The manufacturing operations of our Stadco subsidiary are situated in an industrial self-contained multi-building complex comprised of approximately 183,000 square feet under roof in Los Angeles, California. Stadco manufactures large mission-critical components on several high-profile military aircraft, military helicopter, and military space programs. Stadco has been a critical supplier to a blue-chip customer base that includes some of the largest OEMs and prime contractors in the defense and aerospace industries. Stadco also manufactures tooling, molds, fixtures, jigs and dies used in the production of defense-centric aircraft components.
Our Stadco subsidiary, similar to Ranor, provides a full range of custom solutions: manufacturing engineering, materials management and traceability, high-precision fabrication (in-house fabrication operations include waterjet cutting, press forming, welding, and assembly) and high-precision machining (in-house machining operations include CNC programming, finishing, and assembly), QC inspection including both fixed and portable CMM NonDestructive Testing, and final packaging. In addition, Stadco features a large electron beam welding cell, and two NonDestructive Testing work cells, a unique mission-critical technology set.
All manufacturing at Stadco is performed in accordance with customer requirements. Stadco is an AS 9100D and ISO 9001:2015 certificate holder and a NADCAP NonDestructive Testing certificate holder. Stadco is a U.S. defense-centric company with over 95% of its revenue in the defense sector. Stadco is registered and compliant with ITAR.
Custom Manufacturing
We manufacture a variety of components in accordance with our internal core competencies and external customer needs and requirements. We also provide manufacturing engineering services to assist customers in optimizing their engineering designs for manufacturability. We do not design the components we manufacture; we custom manufacture according to customer “build-to-print” requirements and specifications. Accordingly, we do not distribute the components that we manufacture on the open market, and we do not market any products. We do not own the intellectual property rights to any proprietary marketed product, and we do not manufacture in anticipation of orders. Our custom manufacturing operations do not commence on any project before we receive and accept a customer’s purchase order. We only accept contracts that cover specific components within the capability of our resources.
We primarily target repeating custom programs with relatively mature and stable designs in order to provide long-term solutions for our customers. The multi-unit work is repeat work or a single product with multiple quantity releases. Secondarily, our activities include a variety of both multi-unit and one-off requirements. The one-off work is typically either a prototype or a unique, one-of-a-kind component.
Changes in regulations and market demand for our manufacturing expertise can be significant and sudden, and require us to adapt to the needs of the customers that we serve Understanding this dynamic, we focus on the defense industry in order to reliably pivot with our defense customers to jointly develop the capability to transform our workforce to manufacture components in accordance with our own and our external customers’ changing requirements.
We primarily serve customers in the defense and aerospace; secondarily in the precision industrial sectors. Within these sectors, we have manufactured custom components for U.S. Navy submarines and aircraft carriers, USMC military helicopters, U.S. defense and civilian aerospace programs.
Our contracts are generated both through negotiation with the customer and from bids made pursuant to a request for proposal. Our ability to receive contract awards is dependent upon the contracting party’s perception of such factors as our ability to perform on time, our history of performance, including quality, our financial condition, and our ability to price our services competitively.
Critical Accounting Policies and Estimates
The preparation of the condensed consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We continually evaluate our estimates, including those related to revenue recognition, income taxes and long-lived assets. These estimates and assumptions require management’s most difficult, subjective or complex judgments. Actual results may vary under different assumptions or conditions.
We consider the principles and estimates applied for revenue recognition as one of our most critical accounting estimates. Our revenue can fluctuate from quarter-to-quarter as we measure revenue recognition over the duration of a project, or at the end of the project. The Company records most of its revenue over-time as it completes performance obligations or at a point-in-time, for example, at the delivery date, when control of the promised goods is transferred to the customer. Project volume for revenue recognized at a point-in-time is generally smaller, can fluctuate from period-to-period, and is difficult to forecast.
We measure progress for performance obligations satisfied over time using input methods such as labor hours expended. As a result, we review inputs and outputs and can estimate the remaining amounts of inputs needed to complete the work and therefore report an accurate amount of revenue each reporting period. The amount of revenue period-to-period will fluctuate based on project volume.
Our significant accounting policies are set forth in detail in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. There were no significant changes to our critical accounting policies during the three months ended June 30, 2026.
New Accounting Standards
See Note 2, Basis of Presentation and Significant Accounting Policies, in the Notes to the Unaudited Condensed Consolidated Financial Statements under “Item 1. Financial Statements”, for a discussion of recently adopted new accounting guidance.
Results of Operations
Our results of operations are affected by a number of external factors including the availability of raw materials, commodity prices (particularly steel), macroeconomic factors, including the availability of capital that may be needed by our customers, and political, regulatory and legal conditions in the United States and in foreign markets. It generally takes approximately twelve months or less to complete our manufacturing projects. However, contracts for larger complex components can take up to thirty-six months in general to complete. Units manufactured under the majority of our customer contracts have historically been delivered on time and with a positive gross margin. Our results of operations are also affected by our success in booking new contracts, the timing of revenue recognition, delays in customer acceptances of our products, delays in deliveries of ordered products and our rate of progress fulfilling obligations under our contracts. Delays in any of these items could have an unfavorable impact on liquidity, cause us to have inventories in excess of our short-term needs, and delay our ability to recognize, or prevent us from recognizing, revenue on contracts in our order backlog.
We evaluate the performance of our segments based upon, among other things, segment revenue, operating profit and loss, and certain key performance indicators. Segment operating profit excludes general corporate costs, which include executive and director compensation, stock-based compensation, certain retirement benefit costs, and other corporate facilities and administrative expenses not allocated to the segments.
Key Performance Indicators
While we prepare our financial statements in accordance with U.S. generally accepted accounting principles, or “U.S. GAAP”, we also utilize and present certain financial measures that are not based on or included in U.S. GAAP. We refer to these as non-GAAP financial measures. Please see the section titled “EBITDA Non-GAAP financial measure” below for further discussion of these financial measures, including the reasons why we use such financial measures and reconciliations of such financial measures to the most directly comparable U.S. GAAP financial measures.
Percentages in the following tables and throughout this “Results of Operations” section may reflect rounding adjustments.
Corporate expenses include stock-based compensation, board of director compensation, and other corporate general expenses not allocated to the segments. Prior period segment data is restated to reflect changes in the allocation of corporate expenses to the segments.
Three Months Ended June 30, 2026 and 2025
The following table presents revenue, cost of revenue and gross profit, consolidated and by reportable segment:
Changes
Percent of
(dollars in thousands)
60
58
1,164
45
732
22
(5)
(3)
(179)
(72)
Consolidated Revenue
100
1,717
4,315
48
2,804
39
1,511
52
(414)
(4)
(164)
(66)
Consolidated Cost of revenue
86
1,347
Gross profit (loss)1
1,560
(160)
(6)
303
65
Consolidated Gross profit
370
36
1Net of intersegment elimination
Consolidated – Revenue was $9,096 for the three months ended June 30, 2026, an increase of $1,717 or 23% higher when compared with revenue for the three months ended June 30, 2025. Our rate of progress fulfilling obligations improved at both Ranor and Stadco in the fiscal 2027 first quarter.
Ranor – Revenue was $5,461 for the three months ended June 30, 2026, an increase of $1,164 or 27% higher when compared with the same period a year ago. The project mix remained favorable as project work has shifted among our prime defense customers. The backlog at Ranor on June 30, 2026 was $31,548 as new orders continue to flow from our existing customer base of prime defense contractors.
Stadco – Revenue was $4,064 for the three months ended June 30, 2026, an increase of $732 or 22% higher when compared with the three months ended June 30, 2025. Under a changing project mix, our rate of progress fulfilling obligations improved in the first quarter of fiscal 2027. An increase in revenue from certain prime defense contractors more than offset a decrease in revenue with our military space customers when compared to the same period a year ago. Stadco’s backlog as of June 30, 2026 was $21,133 as new orders for components continue to flow from customers in a variety of programs, including military aircraft, military helicopter, and military space programs.
Gross Profit and Gross Margin
Consolidated – Cost of revenue consists primarily of raw materials, parts, labor, overhead and subcontracting costs. Our cost of revenue for the three months ended June 30, 2026, was $7,696 or 21% higher when compared to the three months ended June 30, 2025. The cost of revenue at Ranor increased by 54% primarily on higher material costs. Gross profit increased by $370 or 36% when compared to the same period a year ago. Gross margin for the three months ended June 30, 2026 was 15.4% compared to 14.0% in the same period a year ago.
Ranor – Cost of revenue increased by $1,511 or 54%, when compared with the same period in the prior year. Actual manufacturing costs were higher than estimated on certain projects as material costs increased and overhead was underabsorbed.
Stadco – Gross profit was negative for the three months ended June 30, 2026. Cost of revenue was virtually unchanged as under absorbed overhead offset a decrease in materials and direct labor year-over-year.
Selling, General and Administrative (SG&A) Expenses
(8)
(59)
Corporate and unallocated
125
106
Consolidated SG&A
(48)
Consolidated – Total selling, general and administrative expenses for the three months ended June 30, 2026, decreased by $48, or 3%, as an increase in stock-based compensation was more than offset a decrease in salaries and related expenses, outside advisory and office costs.
Ranor – SG&A expense decreased by $8 on lower salaries and outside advisory costs which more than offset higher allocated office costs.
Stadco – SG&A expense decreased by $59 or 8% on lower allocated salaries and outside advisory costs.
Corporate and unallocated – SG&A increased by $19 or 18% primarily on higher stock-based compensation.
Operating income (loss)
843
73
(9)
(1,200)
364
(19)
(18)
Operating loss
418
90
Consolidated – As a result of the foregoing, for the three months ended June 30, 2026, we reported an operating loss of $45, compared with an operating loss of $463 for the three months ended June 30, 2025. The change was primarily due to a decrease in operating losses at Stadco.
Ranor – Operating income increased by 9% on a favorable project mix and gross margin drop through.
Stadco – Operating loss decreased by 30% on higher revenue, improved throughput and gross margin.
Corporate and unallocated – Operating loss increased primarily due to an increase in stock-based compensation.
The following table presents other income (expense) for the three months ended:
$ Change
% Change
(300)
(92)
(112)
(14)
(23)
Interest expense decreased by $20 when compared with the same period a year ago, as lower interest expense was incurred in connection with the Ranor term loan and Stadco term loan and borrowings under our revolving line of credit, or the “Revolver Loan”.
Amortization of debt issue costs for the three months ended June 30, 2026 decreased by $9 when compared to three months ended June 30, 2025, due primarily to lower amortized debt issue costs in connection with revolver loan renewal.
Other expense for the three months ended June 30, 2026 reflects a loss of $2 in connection with a fixed asset disposal at Ranor.
Income Tax expense
For the three months ended June 30, 2026, there has been no change in our judgment about the realizability of deferred tax assets in future years, and, therefore, no expense or benefit provided for income taxes.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The valuation allowance on deferred tax assets at June 30, 2026 was approximately $6,100. We believe that it is more likely than not that the benefit from certain state NOL carryforwards and other deferred tax assets will not be realized. The assessment was based on the weight of negative evidence at the balance sheet date, our recent operating losses and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels. In recognition of this risk, we continue to provide a valuation allowance on these items.
As a result of the foregoing, for the three months ended June 30, 2026, we recorded a net loss of $153, or $0.02 per share basic and fully diluted, compared with a net loss of $597, or $0.06 per share basic and fully diluted for the three months ended June 30, 2025.
Liquidity, Capital Resources and Going Concern
Our liquidity is highly dependent on the availability of financing facilities and our ability to maintain gross profit and operating income. As of June 30, 2026, we had $2,067 in total available liquidity, consisting of $1,788 in undrawn capacity under our Revolver Loan and $279 in cash. As of March 31, 2026, we had $1,485 in total available liquidity, consisting of $431 in cash and $1,054 in undrawn capacity under our Revolver Loan. Our working capital was negative because of the reclassification of our long-term debt from noncurrent to current in the condensed consolidated balance sheet.
There was $1,599 and $3,446 outstanding under the Revolver Loan on June 30, 2026 and March 31, 2026, respectively. The Company pays interest at an adjusted SOFR - based rate. Interest - only payments on advances made under the Revolver Loan will continue to be payable monthly in arrears. Interest paid and accrued on advances made under the Revolver Loan during the three months ended June 30, 2026 and 2025, totaled $40 and $53, respectively. The weighted average interest rate on June 30, 2026 and March 31, 2026 was 6.26% and 6.70%, respectively. The weighted average amount outstanding during the three months ended June 30, 2026 was $2,498. The table below presents selected liquidity and capital measures on:
Change
Working capital
(46)
(441)
395
(2,020)
(61)
The next table summarizes changes in cash by primary component in the cash flows statements for the three months ended:
Operating activities
Investing activities
(992)
Financing activities
(360)
(100)
24
Apart from our loan facilities, our primary sources of cash are from customer revenue, customer contract advances, and associated accounts receivable collections. Many of our customers make advance payments and progress payments under the terms of each manufacturing contract. The composition of our accounts receivable collections mix changes between advance payments and customer payments made after shipment of finished goods. Our cash flows can fluctuate from period to period as we mark progress with customer project milestones and the timing of progress payments.
Cash provided by operating activities for the three months ended June 30, 2026 and 2025 was $1,898 and $646, respectively. Our net loss adjusted by our non-cash adjustments provided $831 of cash for the three months ended June 30, 2026, compared with a use of cash of $48 to the same period a year ago. Working capital changes to our balance sheet provided $1,067 of cash during the three months ended June 30, 2026, compared with cash provided of $694 during the same period a year ago.
For the three months ended June 30, 2026 and 2025, we invested $2,436 and $1,250, respectively, for purchases of new fixed assets. We were reimbursed for certain purchases under a supplier development fund during the three months ended June 30, 2026 and 2025 for $2,420 and $2,226, respectively.
We drew down $6,553 under our Revolver Loan during the three months ended June 30, 2026, and repaid $8,400 during the same period. We also used $187 of cash to pay down debt principal, make periodic lease payments, and pay debt issue costs to renew the Revolver Loan.
For the three months ended June 30, 2025, we drew down $2,755 under the Revolver Loan and repaid $4,241 during the same period. We used $188 of cash to pay down debt principal, make periodic lease payments, and pay debt issue costs to renew the Revolver Loan.
All of the above activity resulted in a net decrease in cash of $152 for the three months ended June 30, 2026 compared with a net decrease in cash of $52 for the three months ended June 30, 2025.
Bank Term Loans
On August 25, 2021, the Company entered into an amended and restated loan agreement with Berkshire Bank (as amended to date, the “Loan Agreement”). Under the Loan Agreement, the Bank will continue to provide the Ranor Term Loan and the Revolver Loan. In addition, the Bank provided a term loan to Stadco, the “Stadco Term Loan” in the original amount of $4,000. The proceeds of the original loan by the Bank to Ranor, the “Ranor Term Loan” of $2,850 were previously used to refinance existing mortgage debt of Ranor. The proceeds of the Revolver Loan are used for working capital and general corporate purposes of the Company. The proceeds of the Stadco Term Loan were used to support the acquisition of Stadco and refinance existing indebtedness of Stadco.
Since September 25, 2021 and on the 25th day of each month thereafter, Stadco has made monthly payments of principal and interest in the amount of $54 each, with all outstanding principal and accrued interest due and payable on August 25, 2028. Interest on the Stadco Term Loan is due on unpaid balances at a fixed rate per annum equal to the 7-year Federal Home Loan Bank of Boston Classic Advance Rate plus 2.25%.
The interest rate on the Ranor Term Loan is 6.05%, the monthly payment on the Ranor Term Loan is $17 with benchmark SOFR-based pricing conventions.
Through May 13, 2026, Ranor and certain affiliates of the Company entered into fourteen separate amendments to the original Amended and Restated Loan Agreement dated August 25, 2021 to, among other things, extend the maturity date of the Ranor Term Loan and Revolver Loan to December 15, 2027 and September 15, 2026, respectively.
As a result of Borrowers’ failure to satisfy certain debt covenants as of June 30, 2026 as set forth in the Loan Agreement, the borrowers acknowledge that a certain Event of Default has occurred and is continuing under the Loan Agreement. The Lender expressly reserves any and all rights and remedies available to it under the Loan Documents, the Collateral Documents, and under applicable law, including, without limitation, its right to choose to accelerate and demand the outstanding indebtedness evidenced by the Loan Documents and seek immediate repayment in full, and institute the default rate of interest as of the date of the occurrence of the default or at any time thereafter, as a result of any default or event of default, including, without limitation, the Existing Default, that has arisen or may arise.
There was $5,017 and $7,037 outstanding under the Loan Agreement on June 30, 2026 and March 31, 2026, respectively. Without a waiver, the lender has the right, but not the obligation, to demand repayment from the Company for noncompliance with the debt covenants. In addition, the Bank retains the right to act on covenant violations that occur after the date of delivery of any waiver. The lender has not granted us a waiver. As such, we need to seek alternative financing to pay these obligations as the Company does not have existing facilities or sufficient cash on hand to satisfy these obligations. It is also probable that the Company will not be in compliance with the same debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our condensed consolidated balance sheet.
The Company is exploring various means of strengthening its liquidity position and ensuring compliance with its debt financing covenants by making Stadco operations profitable, renewing our Revolver Loan, or entering into alternative debt facilities.
In order for us to continue operations beyond the next twelve months from the date of issuance of the financial statements and to be able to discharge our liabilities and commitments in the normal course of business, we must renew our revolver loan or seek alternative financing by September 15, 2026. We must mitigate our recurring operating losses at our Stadco subsidiary, efficiently increase utilization of our manufacturing capacity at Stadco and improve the manufacturing process. We plan to closely monitor our expenses and, if required, will reduce operating costs to enhance liquidity.
The uncertainty associated with the recurring operating losses at Stadco, the Revolver Loan renewal, the need for alternative financing, and compliance with debt covenants at subsequent measurement dates raise substantial doubt about our ability to continue as a going concern for at least one-year after the date the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.
Collateral securing all the above obligations comprises all personal and real property of the Company, including cash, accounts receivable, inventories, equipment, and financial assets.
Commitments and Contractual Obligations
The following contractual obligations associated with our normal business activities are expected to result in cash payments in future periods, and include the following material items on June 30, 2026:
There are no off-balance sheet arrangements as of June 30, 2026.
EBITDA Non-GAAP Financial Measure
To complement our condensed consolidated statements of operations and condensed consolidated statements of cash flows, we use EBITDA, a non-GAAP financial measure. Net loss is the financial measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to EBITDA. We believe EBITDA provides our board of directors, management, and investors with a helpful measure for comparing our operating performance with the performance of other companies that have different financing and capital structures or tax rates. We also believe that EBITDA is a measure frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry, and is a measure contained in our debt covenants. However, while we consider EBITDA to be an important measure of operating performance, EBITDA and other non-GAAP financial measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
26
We define EBITDA as net loss plus interest, income taxes, depreciation, and amortization. For the three months ended June 30, 2026 and 2025, net loss was $153 and $597, respectively. The following table provides a reconciliation of EBITDA to net loss, the most directly comparable U.S. GAAP measure reported in our condensed consolidated financial statements for the following periods:
Three Months ended June 30,
444
Interest expense (1)
(29)
EBITDA
651
239
412
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
As a smaller reporting company, we have elected not to provide the information required by this Item.
Item 4. Controls and Procedures.
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and procedures that are designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and includes controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures.
As of the end of the period covered by this report, an evaluation was carried out, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting described below.
Management’s Responsibility for Internal Controls
The Company’s internal control over financial reporting is designed under the supervision of our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Inherent Limitations Over Internal Controls
Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods is subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Material Weaknesses
We identified four material weaknesses in our internal control over financial reporting as of June 30, 2026. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our financial statements for our Annual Report on Form 10-K, for the fiscal year ended March 31, 2026, management identified the following material weaknesses:
Notwithstanding the material weaknesses, management believes the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the Company’s financial condition, results of operations and cash flows as of and for the periods presented in accordance with U.S. GAAP.
Remediation of the Material Weaknesses
For the fiscal year ended March 31, 2026, we reviewed our entity level controls, staffing requirements and the cost/benefit for remediating our material weaknesses. In fiscal 2024, our management, with the oversight of our audit committee, began to implement a plan and take measures in order to remediate the underlying causes of the material weaknesses through the development and implementation of a thorough review of our procedures, policies, processes, and review controls to gain additional assurance regarding the remediation our accounting for acquisitions, income taxes, closing cycle time at Stadco, impairment of long-lived assets, and segregation of duties. This remediation process has not been completed, and the following is an update through the end of June 30, 2026:
Management believes that the above actions continue the process of remediation for the material weakness as disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. The material weaknesses will not be considered remediated, however, until the applicable controls operate for a sufficient period and management has concluded, through testing, that these controls are operating effectively. We can provide no assurance as to when the remediation of these material weaknesses will be completed to provide for an effective control environment.
We have identified our internal controls over financial reporting. We are committed to continually improving our internal control process and will diligently review our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may decide that additional measures are necessary to address control deficiencies.
Changes in Internal Control over Financial Reporting
Except as disclosed under “Management’s Remediation Plan”, for the quarter ended June 30, 2026, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. Other Information.
Item 1. Legal Proceedings.
We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. As of the date hereof, we are not a party to any material legal or administrative proceedings. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.
Item 5. Other Information
During the three months ended June 30, 2026, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits.
Exhibit Index
Exhibit No.
Description
Incorporatedby ReferenceForm
File No.
Date Filed
ExhibitNo.
Filed orFurnishedHerewith
3.1
Certificate of Incorporation of the Registrant
SB-2
333-133509
August 28, 2006
Certificate of Amendment to the Certificate of Incorporation of TechPrecision Corporation
8-K
000-51378
February 23, 2023
3.3
Second Amended and Restated By-laws of the Registrant
001-41698
August 14, 2025
3.4
Certificate of Designation for Series A Convertible Preferred Stock of the Registrant
March 3, 2006
3.5
Certificate of Amendment to Certificate of Designation for Series A Convertible Preferred Stock of the Registrant
10-Q
November 12, 2009
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
August 13, 2026
By:
/s/ Phillip E. Podgorski
Phillip E. Podgorski
Chief Financial Officer