TechPrecision (TPCS) grows defense revenue but warns on going concern and debt
TechPrecision Corporation reported revenue of $9.1 million for the quarter ended June 30, 2026, up from $7.4 million a year earlier, driven by higher defense work at both Ranor and Stadco and improved project execution. Gross profit rose to $1.4 million, and the net loss narrowed to $153 thousand (loss of $0.02 per share) from $597 thousand. EBITDA improved to $651 thousand. Operating cash flow was strong at $1.9 million, while cash on hand was $279 thousand, with total available liquidity of $2.1 million including revolver capacity.
Ranor generated operating income of $916 thousand, while Stadco posted an operating loss of $836 thousand, though Stadco’s loss improved versus the prior year. Backlog remained sizable, with remaining performance obligations of $52.7 million, which the company expects to recognize within 36 months.
Leverage and liquidity present significant risk. Total debt was $5.0 million, and the company is in default of its balance sheet leverage covenant, with no waiver granted. All long-term debt is classified as current, and the revolver matures on September 15, 2026. Management states that these covenant violations, the need to renew or refinance the revolver, and continuing losses at Stadco raise substantial doubt about the company’s ability to continue as a going concern. Management also reports material weaknesses in internal control over financial reporting, and disclosure controls and procedures are deemed not effective.
Positive
- Revenue grew 23% year over year to $9.1 million, with both Ranor and Stadco contributing and consolidated gross margin improving to 15.4%.
- Net loss improved by $444 thousand, from $597 thousand to $153 thousand, and EBITDA rose to $651 thousand from $239 thousand.
- Operating cash flow strengthened to $1.9 million from $646 thousand, supporting liquidity despite low cash balances.
- Backlog and remaining performance obligations are sizable, with $52.7 million of remaining performance obligations expected to be recognized within 36 months.
Negative
- Management states that recurring Stadco losses, covenant issues, and refinancing needs raise substantial doubt about the company’s ability to continue as a going concern for at least one year.
- The company is in default of its balance sheet leverage covenant with $5.0 million outstanding under its loan agreement and no waiver, allowing the lender to accelerate repayment and restrict revolver access.
- All long-term debt has been reclassified as current, leading to negative working capital and heightening near-term refinancing risk.
- Management reports four material weaknesses in internal control over financial reporting, and disclosure controls and procedures are deemed not effective.
Filing Explained
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FAQ
How did TechPrecision (TPCS) perform financially in the quarter ended June 30, 2026?
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
TechPrecision Corporation
(Exact name of registrant as specified in its charter)
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
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.
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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).
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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.
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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).
The number of shares outstanding of the registrant’s common stock as of August 6, 2026, was
Table of Contents
TABLE OF CONTENTS
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PART I. | FINANCIAL INFORMATION | 3 |
ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED) | 3 |
| CONDENSED CONSOLIDATED BALANCE SHEETS | 3 |
| 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 | 27 |
PART II. | OTHER INFORMATION | 30 |
ITEM 1. | LEGAL PROCEEDINGS | 30 |
ITEM 5. | OTHER INFORMATION | 30 |
ITEM 6. | EXHIBITS | 31 |
| SIGNATURES | 32 |
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PART I
ITEM 1. FINANCIAL STATEMENTS
TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
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| | June 30, | | March 31, | ||
(dollars in thousands, except share and per share data) | | 2026 | | 2026 | ||
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash | | $ | | | $ | |
Accounts receivable | |
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Contract assets | |
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Raw materials | | | | | | |
Work-in-process | | | | | | |
Other current assets | |
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Total current assets | |
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Property, plant and equipment, net | |
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Right of use asset, net | | | | | | |
Other noncurrent assets | |
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Total assets | | $ | | | $ | |
LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | |
Current liabilities: | | | | | | |
Accounts payable | | $ | | | $ | |
Accrued expenses | |
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Income taxes payable | | | | | | |
Contract liabilities | |
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Customer deposits | | | | | | |
Current portion of long-term lease liability | |
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Current portion of long-term debt, net | | | | | | |
Total current liabilities | |
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Long-term lease liability | | | | | | |
Other noncurrent liability | | | | | | |
Total liabilities | | | | | | |
Commitments and contingent liabilities (see Note 14) | | | | | | |
Stockholders’ Equity: | | | | | | |
Common stock - par value $ | |
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Additional paid in capital | |
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Accumulated deficit | |
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Total stockholders’ equity | |
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Total liabilities and stockholders’ equity | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
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TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
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| | Three months ended June 30, | ||||
(dollars in thousands, except share and per share data) | | 2026 | | 2025 | ||
Revenue | | $ | | | $ | |
Cost of revenue | |
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Gross profit | |
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Selling, general and administrative | |
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Loss from operations | | | ( | | | ( |
Other (expense) income | |
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Interest expense | |
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Total other expense, net | |
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Loss before income taxes | |
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Income tax expense (benefit) | | | — | | | — |
Net loss | | $ | ( | | $ | ( |
Net loss per share – basic and diluted | | $ | ( | | $ | ( |
Weighted average number of shares outstanding – basic and diluted | | | | | | |
See accompanying notes to the condensed consolidated financial statements.
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TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)
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(dollars in thousands, except share data) | | Stock | | Value | | Capital | | Deficit | | Equity | ||||
Balance March 31, 2025 | | | | $ | | | $ | | | $ | ( | | $ | |
Stock issued for exercised options | | | | | — | | | — | | | — | | | — |
Stock-based compensation | | — | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | ( | | | ( |
Balance June 30, 2025 | | | | $ | | | $ | | | $ | ( | | $ | |
Balance March 31, 2026 | | | | $ | | | $ | | | $ | ( | | $ | |
Stock issued for restricted awards | | | | | — | | | — | | | — | | | — |
Stock-based compensation | | — | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | ( | | | ( |
Balance June 30, 2026 | | | $ | | | $ | | $ | ( | | $ | |||
See accompanying notes to the condensed consolidated financial statements.
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TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
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| | Three Months Ended June 30, | ||||
(in thousands) | | 2026 | | 2025 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
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Depreciation and amortization | |
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Amortization of debt issue costs | |
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Stock based compensation expense | |
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Change in contract loss provision | |
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Loss on disposal of fixed assets | | | | | | — |
Changes in operating assets and liabilities: | |
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Accounts receivable | |
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Contract assets | |
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Work-in-process and raw materials | |
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Other current assets | |
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Accounts payable | |
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Accrued expenses | |
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Contract liabilities | |
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Other noncurrent liabilities | | | ( | | | ( |
Net cash provided by operating activities | |
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CASH FLOWS FROM INVESTING ACTIVITIES: | |
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Purchases of property, plant, and equipment | |
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Reimbursements for purchases of property, plant and equipment | | | | | | |
Net cash (used in) provided by investing activities | | | ( | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
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Debt issue costs | | | ( | | | ( |
Revolver loan borrowings | | | | | | |
Revolver loan payments | | | ( | | | ( |
Payments of principal for leases | | | ( | | | ( |
Repayments of long-term debt | |
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Net cash used in financing activities | |
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Net decrease in cash | |
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Cash - beginning of period | |
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Cash - end of period | | $ | | | $ | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: | |
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Cash paid for interest | | $ | | | $ | |
See accompanying notes to the condensed consolidated financial statements.
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 $
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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 $
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 $
As of June 30, 2026, we had $
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.
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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 $
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.
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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
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:
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Revenue by market | | Defense | | Industrial | | Totals | |||
Three months ended June 30, 2026 | | $ | | | $ | | | $ | |
Three months ended June 30, 2025 | | $ | | | $ | — | | $ | |
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Revenue by contract type | | Over-time | | Point-in-time | | Totals | |||
Three months ended June 30, 2026 | | $ | | | $ | | | $ | |
Three months ended June 30, 2025 | | $ | | | $ | | | $ | |
As of June 30, 2026, the Company had $
We are dependent each year on a small number of customers who generate a significant portion of our business, and these customers change from year to year. The following table sets forth revenues from customers who accounted for more than 10% of our revenue for the periods ended:
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| | Three months ended | | Three months ended | | ||||||
| | June 30, 2026 | | June 30, 2025 | | ||||||
Customer | | Amount | | Percent | | Amount | | Percent | | ||
A | | $ | | | | % | $ | | | | % |
B | | $ | * | | * | % | $ | * | | * | % |
C | | $ | * | | * | % | $ | | | | % |
D | | $ | | | | % | $ | * | | * | % |
E | | $ | * | | * | % | $ | | | | % |
F | | $ | | | | % | $ | | | | % |
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:
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| | June 30, 2026 | | June 30, 2025 | | ||||||
Segment | | Amount | | Percent | | Amount | | Percent | | ||
Ranor | | $ | | | | % | $ | | | | % |
Stadco | | $ | | | | % | $ | | | | % |
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:
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Contract assets | | Unbilled | | Payments | | Total | |||
June 30, 2026 | | $ | | | $ | ( | | $ | |
March 31, 2026 | | $ | | | $ | ( | | $ | |
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For the three months ended June 30, 2026 and 2025, we recognized revenue of $
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| | Opening | | | | Obligations | | Closing | ||||
Contract liabilities | | Balance | | Billed | | Satisfied | | Balance | ||||
June 30, 2026 | | $ | | | $ | | | $ | ( | | $ | |
March 31, 2026 | | $ | | | $ | | | $ | ( | | $ | |
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
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 $
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:
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| | Three Months ended | | Three Months ended | ||
| | June 30, 2026 | | June 30, 2025 | ||
Basic and diluted EPS | | | | | | |
Net loss | | $ | ( | | $ | ( |
Net loss per share – basic and diluted | | $ | ( | | $ | ( |
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:
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| | June 30, 2026 | | June 30, 2025 |
Stock options |
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Warrants |
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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
The 2016 Plan authorizes the award of incentive and non-qualified stock options, restricted and unrestricted stock awards, restricted stock units, and performance awards to employees, directors, consultants, and other individuals who provide services to TechPrecision or its affiliates. The purpose of the 2016 Plan is to enable TechPrecision and its affiliated companies to recruit and retain highly qualified employees, directors, and consultants; and to provide those employees, directors, and consultants with an incentive for productivity, and an opportunity to share in the growth and value of the Company. Subject to adjustment as provided in the 2016 Plan, the maximum number of shares of common stock that may be issued with respect to awards under the 2016 Plan is
The fair value of the options we grant is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stock. The average dividend yield over the historical period for which volatility was computed is zero. The risk-free interest rate was selected based upon yields of
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| | Number Of | | Average | | Intrinsic | | Contractual Life | ||
| | Options | | Exercise Price | | Value | | (in years) | ||
Outstanding at March 31, 2026 | | | | $ | | | $ | | | |
Outstanding at June 30, 2026 | | | | $ | | | $ | | | |
Vested or expected to vest at June 30, 2026 |
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Exercisable and vested at June 30, 2026 |
| | | $ | | | $ | |
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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
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| | | | Weighted | | | | | | | | |
|
| |
| Average |
| |
| |
| | ||
| | |
| Remaining |
| Weighted | | |
| Weighted | ||
| | Options |
| Contractual | | Average | | Options | | Average | ||
Range of Exercise Prices: | | Outstanding | | Term | | Exercise Price | | Exercisable | | Exercise Price | ||
$ |
| | | | $ | | | | | $ | | |
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Stock Awards
On August 3, 2023, we issued
On January 24, 2025, pursuant to the 2016 Plan, we awarded
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 $
On March 6, 2026, pursuant to the 2016 Plan, the Company issued
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
| | | | | | | | | | | |
| | June 30, 2026 | | March 31, 2026 |
| ||||||
Customer | | Amount | | Percent | | Amount | | Percent |
| ||
A | | $ | * |
| * | % | $ | * |
| * | % |
B | | $ | * |
| * | % | $ | * |
| * | % |
C | | $ | * |
| * | % | $ | * |
| * | % |
D | | $ | |
| | % | $ | * |
| * | % |
E | | $ | |
| | % | $ | |
| | % |
F | | $ | * |
| * | % | $ | * |
| * | % |
G | | $ | * |
| * | % | $ | |
| | % |
*less than 10% of total
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NOTE 8 - OTHER CURRENT ASSETS
| | | | | | |
Other current assets included the following as of: | | June 30, 2026 | | March 31, 2026 | ||
Prepaid insurance | | $ | | | $ | |
Prepaid subscriptions | |
| | |
| |
Prepaid taxes | |
| | |
| |
Supplier advances | | | | | | |
Deposits | | | | | | |
Other | |
| | | | |
Total | | $ | | | $ | |
NOTE 9 - PROPERTY, PLANT AND EQUIPMENT, NET
| | | | | | |
Property, plant and equipment, net included the following as of: | | June 30, 2026 | | March 31, 2026 | ||
Land | | $ | | | $ | |
Building and improvements | |
| | | | |
Machinery equipment, furniture, and fixtures | |
| | | | |
Construction-in-progress | |
| | | | |
Total property, plant, and equipment | |
| | | | |
Less: accumulated depreciation | |
| ( | | | ( |
Total property, plant and equipment, net | | $ | | | $ | |
For the three months ended June 30, 2026 and 2025, we recorded depreciation expense of $
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: | | June 30, 2026 | | March 31, 2026 | ||
Accrued compensation | | $ | | | $ | |
Provision for claims | |
| | | | |
Provision for contract losses | |
| | | | |
Accrued professional fees | |
| | | | |
Accrued project costs | | | | | | |
Other | | | | | | |
Total | | $ | | | $ | |
Accrued compensation includes amounts for executive bonuses, payroll and vacation and holiday pay. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in the provision are recorded in cost of revenue. Accrued project costs are estimates for certain project expenses during the reporting period.
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NOTE 11 - DEBT
| | | | | | |
Long-term debt included the following as of: | | June 30, 2026 | | March 31, 2026 | ||
Stadco Term Loan, at | | $ | | | $ | |
Ranor Term Loan, at | | | | | | |
Ranor Revolver Loan, due September 2026 | | | | | | |
Stadco equipment financing, at | | | — | | | |
Total debt | | $ | | | $ | |
Less: debt issue costs unamortized | | $ | | | $ | |
Total debt, net | | $ | | | $ | |
Less: Current portion of long-term debt | | $ | | | $ | |
Total long-term debt, net | | $ | — | | $ | — |
Amended and Restated Loan Agreement
On August 25, 2021, the Company entered into the Loan Agreement. Under the Loan Agreement, the Bank will continue to provide the Ranor Term Loan and the revolving line of credit, or the Revolver Loan. In addition, the Bank provided the Stadco Term Loan (as defined below) in the original amount of $
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.
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.
Stadco Term Loan
On August 25, 2021, Stadco borrowed $
Unamortized debt issue costs on June 30, 2026 and March 31, 2026 were $
Ranor Term Loan and Revolver Loan
A term loan was made to Ranor by the Bank in 2016 in the amount of $
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
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.
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Paid and accrued interest expense under the Revolver Loan during the three months ended June 30, 2026 and 2025 was $
Unamortized debt issue costs on June 30, 2026 and March 31, 2026 were $
Loan Covenants
For purposes of this discussion, Ranor and Stadco are referred to together as the “Borrowers”. The Company agreed to maintain compliance with certain financial covenants under the Loan Agreement. Namely, the Borrowers agree to maintain the ratio of the Cash Flow of TechPrecision-to-the Total Debt Service of TechPrecision of not less than
The Borrowers agreed to cause their Balance Sheet Leverage to be less than or equal
The Borrowers agree to maintain a Loan-to-Value Ratio of not greater than
The Borrowers agree that their combined annual capital expenditures shall not exceed $
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.
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Stadco Equipment Financing
Stadco entered into a
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 $
In fiscal year 2023, Stadco entered into an agreement with the Los Angeles Department of Water and Power, or “LADWP”, to settle previously outstanding amounts for water, water service, electric energy and/or electric service in the aggregate amount of $
NOTE 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 $
In June 2026 Ranor signed an agreement to lease
The following table lists our right-of-use assets and liabilities on our condensed consolidated balance sheets at:
| | | | | | |
| | June 30, 2026 | | March 31, 2026 | ||
Right of use asset – operating lease | | $ | | | $ | |
Right of use asset – finance leases | | | | | | |
Amortization | | | ( | | | ( |
Right of use assets, net | | $ | | | $ | |
Lease liability – operating lease | | $ | | | $ | |
Lease liability – finance leases | | | | | | |
Total lease liability | | $ | | | $ | |
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Other supplemental information regarding our leases is contained in the following tables:
| | | | | | |
Components of lease expense for the three months ended: | | June 30, 2026 | | June 30, 2025 | ||
Operating lease amortization | | $ | | | $ | |
Finance lease amortization | | $ | | | $ | |
Finance lease interest | | $ | | | $ | — |
| | | | | |
Weighted average lease term and discount rate on: | | June 30, 2026 | | June 30, 2025 |
|
Lease term (years) – operating lease |
| | | ||
Lease term (years) – finance lease | | | | ||
Lease rate – operating lease | | | % | | % |
Lease rate – finance lease |
| | % | | % |
| | | | | | |
Supplemental cash flow information related to leases for the three months ended : | | June 30, 2026 | | June 30, 2025 | ||
Cash used in operating activities | | $ | | | $ | |
Cash used in financing activities | | $ | | | $ | |
Maturities of lease liabilities on June 30, 2026 for the next five years:
| | | |
July 1, 2026 – June 30, 2027 | | $ | |
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 | | $ | |
Less: imputed interest | |
| |
Total | | $ | |
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 $
Purchase Commitments
As of June 30, 2026, we had $
Retirement Benefits
The Company has
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NOTE 15 - SEGMENT INFORMATION
The Company has
Our Chief Executive Officer, or CEO, is the Chief Operating Decision Maker, or CODM, and evaluates the performance of our segments based upon, among other things, segment revenue and operating profit. The 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:
| | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, 2026 | | Three months ended June 30, 2025 | ||||||||||||||
| | Ranor | | Stadco | | Total | | Ranor | | Stadco | | Total | ||||||
Revenue | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Intersegment elimination | | | — | | | ( | | | ( | | | ( | | | ( | | | ( |
Revenue, net | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Cost of revenue | | | | | | | | | | | | | | | | | | |
Selling, general, and administrative (1) | | | | | | | | | | | | | | | | | | |
Income (loss) from operations | | | | | | ( | | | | | | | | | ( | | | ( |
Reconciliation of profit or loss: | | | | | | | | | | | | | | | | | | |
Unallocated items: | | | | | | | | | | | | | | | | | | |
Corporate general costs (2) | | | | | | | | | ( | | | | | | | | | ( |
Consolidated operating loss | | | | | | | | | ( | | | | | | | | | ( |
Other income (expense), net | | | | | | | | | ( | | | | | | | | | |
Interest expense | | | | | | | | | ( | | | | | | | | | ( |
Consolidated loss before income taxes | | | | | | | | $ | ( | | | | | | | | $ | ( |
Depreciation and amortization | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Capital expenditures | | $ | | | $ | — | | $ | | | $ | | | $ | — | | $ | |
Total assets | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| (1) | Corporate overhead costs such as executive and sales compensation, and other corporate facilities and administrative expenses are allocated equally to the segments. |
| (2) | Corporate general costs include executive and director compensation, stock-based compensation expense, and other corporate administrative expenses not allocated to the segments. |
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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:
| ● | our reliance on individual purchase orders, rather than long-term contracts, to generate revenue; |
| ● | our ability to balance the composition of our revenue and effectively control operating expenses; |
| ● | external factors that may be outside of our control, including health emergencies, like epidemics or pandemics, geopolitical conflicts, price inflation, increasing interest rates, and supply-chain disruptions; |
| ● | the availability of appropriate financing facilities impacting our operations, financial condition and/or liquidity; |
| ● | our ability to receive contract awards through competitive bidding processes; |
| ● | our ability to maintain standards to enable us to manufacture products to exacting specifications; |
| ● | our ability to enter new markets for our services; |
| ● | our reliance on a small number of customers for a significant percentage of our business; |
| ● | competitive pressures in the markets we serve; |
| ● | changes in the availability or cost of raw materials and energy for our production facilities; |
| ● | restrictions in our ability to operate our business due to our outstanding indebtedness; |
| ● | government tariffs, regulations and requirements; |
| ● | pricing and business development difficulties; |
| ● | changes in government spending on national defense; |
| ● | our ability to make acquisitions and successfully integrate those acquisitions with our business; |
| ● | our failure to maintain effective internal controls over financial reporting; |
| ● | general industry and market conditions and growth rates, and |
| ● | those risks discussed in “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K, as well as those described in any other filings which we make with the SEC. |
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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.
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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.
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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:
| | | | | | | | | | | | | | | | |
| | June 30, 2026 | | June 30, 2025 | | Changes | | |||||||||
| | | | Percent of | | | | Percent of | | | | | | |||
(dollars in thousands) | | Amount | | Revenue | | Amount | | Revenue | | Amount | | Percent |
| |||
Revenue | | | | | | | | | | | | | | | | |
Ranor | | $ | 5,461 | | 60 | % | $ | 4,297 | | 58 | % | $ | 1,164 | | 27 | % |
Stadco | | | 4,064 | | 45 | % | | 3,332 | | 45 | % | | 732 | | 22 | % |
Intersegment elimination | | | (429) | | (5) | % | | (250) | | (3) | % | | (179) | | (72) | % |
Consolidated Revenue | | $ | 9,096 | | 100 | % | $ | 7,379 | | 100 | % | $ | 1,717 | | 23 | % |
Cost of revenue | | | | | | | | | | | | | | | | |
Ranor | | $ | 4,315 | | 48 | % | $ | 2,804 | | 39 | % | $ | 1,511 | | 54 | % |
Stadco | | | 3,795 | | 42 | % | | 3,795 | | 52 | % | | — | | — | % |
Intersegment elimination | | | (414) | | (4) | % | | (250) | | (5) | % | | (164) | | (66) | % |
Consolidated Cost of revenue | | $ | 7,696 | | 86 | % | $ | 6,349 | | 86 | % | $ | 1,347 | | 21 | % |
Gross profit (loss)1 | | | | | | | | | | | | | | | | |
Ranor | | $ | 1,560 | | 17 | % | $ | 1,493 | | 20 | % | $ | 67 | | 4 | % |
Stadco | | | (160) | | (2) | % | | (463) | | (6) | % | | 303 | | 65 | % |
Consolidated Gross profit | | $ | 1,400 | | 15 | % | $ | 1,030 | | 14 | % | $ | 370 | | 36 | % |
1Net of intersegment elimination
Revenue
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.
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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
| | | | | | | | | | | | | | | | |
| | June 30, 2026 | | June 30, 2025 | | Changes | | |||||||||
| | | | | Percent of | | | | | Percent of | | | | | |
|
(dollars in thousands) | | Amount | | Revenue | | Amount | | Revenue | | Amount | | Percent |
| |||
Ranor | | $ | 644 | | 7 | % | $ | 652 | | 9 | % | $ | (8) | | (1) | % |
Stadco | |
| 676 | | 7 | % | | 735 | | 10 | % | | (59) | | (8) | % |
Corporate and unallocated | |
| 125 | | 2 | % | | 106 | | 1 | % | | 19 | | 18 | % |
Consolidated SG&A | | $ | 1,445 | | 16 | % | $ | 1,493 | | 20 | % | $ | (48) | | (3) | % |
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)
| | | | | | | | | | | | | | | | |
| | June 30, 2026 | | June 30, 2025 | | Changes | | |||||||||
| | | | Percent of | | | | Percent of | | | | |
| |||
(dollars in thousands) | | Amount | | Revenue | | Amount | | Revenue | | Amount | | Percent |
| |||
Ranor | | $ | 916 |
| 10 | % | $ | 843 |
| 11 | % | $ | 73 |
| 9 | % |
Stadco | |
| (836) |
| (9) | % |
| (1,200) |
| (16) | % |
| 364 |
| 30 | % |
Corporate and unallocated | |
| (125) |
| (2) | % |
| (106) |
| (1) | % |
| (19) |
| (18) | % |
Operating loss | | $ | (45) |
| (1) | % | $ | (463) |
| (6) | % | $ | 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.
Other (expense) income
The following table presents other income (expense) for the three months ended:
| | | | | | | | | | | | |
| | June 30, 2026 | | June 30, 2025 | | $ Change | | % Change |
| |||
Other (expense) income | | $ | (2) | | $ | 1 | | $ | (3) |
| (300) | % |
Interest expense | | | (92) | | | (112) | | | 20 |
| 18 | % |
Amortization of debt issue costs | | | (14) | | | (23) | | | 9 |
| 39 | % |
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”.
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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.
Net loss
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:
| | | | | | | | | |
| | June 30, | | March 31, | | Change | |||
(dollars in thousands) | | 2026 | | 2026 | | Amount | |||
Cash | | $ | 279 | | $ | 431 | | $ | (152) |
Working capital | | $ | (46) | | $ | (441) | | $ | 395 |
Total debt | | $ | 5,017 | | $ | 7,037 | | $ | (2,020) |
Total stockholders’ equity | | $ | 7,612 | | $ | 7,673 | | $ | (61) |
The next table summarizes changes in cash by primary component in the cash flows statements for the three months ended:
| | | | | | | | | |
| | June 30, | | June 30, | | Change | |||
(dollars in thousands) | | 2026 | | 2025 | | Amount | |||
Operating activities | | $ | 1,898 | | $ | 646 | | $ | 1,252 |
Investing activities | |
| (16) | | | 976 | | | (992) |
Financing activities | |
| (2,034) | | | (1,674) | | | (360) |
Net decrease in cash | | $ | (152) | | $ | (52) | | $ | (100) |
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Operating activities
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.
Investing activities
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.
Financing activities
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.
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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:
| ● | Our debt obligations, including fixed and variable-rate debt, totaled $5,017, and, because of current debt covenant violations, are classified as current in the condensed consolidated balance sheets. |
| ● | We enter into various commitments with suppliers for the purchase of raw materials and work supplies. Our outstanding unconditional contractual commitments, including for the purchase of raw materials and supplies goods, totaled approximately $3,378, all of it due to be paid within the next twelve months. These purchase commitments are in the normal course of business. |
| ● | We also have $14,463 in purchase obligations outstanding for the purchase of machinery and equipment under an arrangement with a certain customer where the Company is reimbursed in full for all purchases. |
| ● | Our operating lease obligations, including imputed interest, totaled $3,755 for buildings through 2030, with approximately $939 due annually for each of the next four years. |
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.
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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, | |||||||
(dollars in thousands) | | 2026 | | 2025 | | Change | |||
Net loss | | $ | (153) | | $ | (597) | | $ | 444 |
Interest expense (1) | | | 106 | | | 135 | | | (29) |
Depreciation and amortization | | | 698 | | | 701 | | | (3) |
EBITDA | | $ | 651 | | $ | 239 | | $ | 412 |
| (1) | Includes amortization of debt issue costs. |
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.
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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:
| 1) | Purchase accounting - we did not maintain proper controls, processes and procedures over the initial purchase accounting And the fair value accounting associated with our acquisition of Stadco in the fiscal year ended March 31, 2022 that were adequately designed, documented, and executed to support the accurate and timely reporting of our financial results regarding the initial purchase accounting and the fair value accounting associated with the Stadco acquisition. |
| 2) | Stadco accounting - we did not maintain a sufficient complement of resources and expertise on the Stadco accounting staff necessary to consistently perform management review controls over financial information and complete account reconciliations on a timely basis, to ensure all transactions are accurately captured and recorded prior to closing the books. The demand on our accounting resources is significant due to the manual nature of controls necessary to maintain effective control over Stadco’s legacy system. As a result of this material weakness, we made several post-closing adjustments for percentage-of-completion (POC) revenue projects. The adjustment corrected inputs for project revenues and costs in progress at Stadco, as the initial and correcting journal entries were not reconciled and posted in a timely manner during the year end reporting cycle. Because of the foregoing reasons, extra time was required to complete certain items with respect to the financial statement preparation, closing and review process for the fiscal year ended March 31, 2025. |
| 3) | Accounting for impairment of long-lived assets - The demand on corporate accounting resources is significant due to the manual nature of controls necessary to maintain effective control over Stadco’s legacy accounting system and intensifies during the quarterly closings. In the fourth quarter of fiscal 2025 we engaged a third-party specialist to perform an impairment test on the recoverability of long-lived assets triggered by a history of operating losses at Stadco. Because of our inability to close the Stadco books in a timely manner, extra time was required to complete certain tasks with respect to the impairment test, and we were not able to execute a timely management review of the valuation report. Because of this material weakness, we made a late journal entry to our general ledger which was subsequently reversed while preparing the consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025. |
| 4) | Segregation of duties - Duties are logically divided among people and processes to mitigate risks and meet financial reporting objectives. Inadequate segregation of duties could result in misappropriation of assets or intentional misstatements in the financial statements. Management performs an annual assessment including planning, scoping, documentation, and testing of controls. As a result of the assessment, we discovered that in fiscal 2025, we operated for a brief period when our interim CFO/Controller assumed roles as a reviewer and journal entry preparer with access to the general ledger and other financial reporting programs and spreadsheets. These conditions were temporary and existed during a brief period as the Company transitioned to our new CFO on March 31, 2025. |
Notwithstanding the material weaknesses, management believes the 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.
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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:
| 1) | Purchase accounting - The Company enhanced its working framework with a memorandum that depicts a clear, explicit roadmap for the purchase accounting guidance at every step. We will follow that roadmap and implement new controls as required. We engaged a third-party specialist in July 2023 with the requisite knowledge to perform all required valuations and accounting for business combinations. That specialist worked with the Company on all the pre-acquisition activities, or due diligence, in connection with the attempted acquisition of Votaw Precision Technologies, Inc., (“Votaw”). The specialist was hired primarily to ensure that certain accounting issues that arose in the Stadco acquisition would not re-occur with the purchase accounting for the Votaw acquisition. Ultimately, the Votaw acquisition process terminated, but the Company enhanced its policy, procedures and process level controls on how it gathers and analyzes relevant facts and circumstances in connection with all complex business transactions. We will document the required evidence that needs to be maintained (e.g., checklists, signatures) for each existing and new internal control and communicate the requirements to key stakeholders. We will review and test our controls and procedures again with the next acquisition target before making a final validation on operating effectiveness. |
| 2) | Stadco accounting - For the fiscal year ended March 31, 2026, we reviewed our entity level controls, staffing requirements and the cost/benefit for upgrading our legacy systems and accounting staff at Stadco. As a result of this review, we continue to transition the accounting function to the CFO office in Massachusetts, where expert and experienced personnel are in-place to execute a plan to a) improve the effectiveness and efficiency of the accounting operation, ensuring a timely closing cycle, b) improve the reliability of financial reporting, and c) ensure continued compliance with generally accepted accounting principles and applicable laws and regulations. We implemented these measures during fiscal 2024, 2025 and 2026, and we will monitor progress during fiscal 2027 as we facilitate remediation of the material weakness. |
| 3) | Accounting for impairment of long-lived assets - We will continue to engage a third-party specialist with the requisite knowledge to perform all required testing in connection with the impairment of long-lived assets. This specialist worked with the Company on acquisition activities in connection with the Stadco purchase. We identified the late journal entry as a control gap, i.e., the controls design was effective but did not operate as designed. Management will develop and implement a formal policy with related procedures to supplement existing controls to ensure a timely evaluation of triggering events and changes in circumstances that may indicate an impairment of long-lived assets. We will review and test the process again during the next impairment testing date before making a final validation on operating effectiveness. |
| 4) | Segregation of duties - With the hiring of a new CFO on March 31, 2025, duties are now properly segregated under the CFO and controller’s office. We will continue to assess scoping, documentation, and testing of controls under the financial reporting function during the next fiscal year before making a final validation on operating effectiveness. |
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.
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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,
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Item 6. Exhibits.
Exhibit Index
Exhibit No. | | Description | | Incorporated | | File No. | | Date Filed | | Exhibit | | Filed or |
3.1 | | Certificate of Incorporation of the Registrant | | SB-2 | | 333-133509 | | August 28, 2006 | | 3.1 | | |
3.2 | | Certificate of Amendment to the Certificate of Incorporation of TechPrecision Corporation | | 8-K | | 000-51378 | | February 23, 2023 | | 3.1 | | |
3.3 | | Second Amended and Restated By-laws of the Registrant | | 8-K | | 001-41698 | | August 14, 2025 | | 3.1 | | |
3.4 | | Certificate of Designation for Series A Convertible Preferred Stock of the Registrant | | 8-K | | 000-51378 | | March 3, 2006 | | 3.1 | | |
3.5 | | Certificate of Amendment to Certificate of Designation for Series A Convertible Preferred Stock of the Registrant | | 10-Q | | 000-51378 | | November 12, 2009 | | 3.5 | | |
31.1 | | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | | | | | | | | X |
31.2 | | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | | | | | | | | X |
32.1 | | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | | | | | | | | X |
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. | | | | | | | | | | X |
101.SCH | | XBRL Taxonomy Extension Schema Document | | | | | | | | | | X |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document | | | | | | | | | | X |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document | | | | | | | | | | X |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document | | | | | | | | | | X |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document | | | | | | | | | | X |
104 | | Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | | | | | | | | | | X |
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SIGNATURES
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.
|
| TechPrecision Corporation |
|
|
|
August 13, 2026 | By: | /s/ Phillip E. Podgorski |
|
| Phillip E. Podgorski |
| | Chief Financial Officer |
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