*Table
        of Contents*







**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-KSB**




x
            ANNUAL
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
      the
      fiscal year ended March 31, 2008




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
      the
      transition period from __________ to ____________




Commission
      File No. 0-51378




**Techprecision
      Corporation**


(Name
      of
      small business issuer in its charter)





Delaware
            
            51-0539828(State
                or other jurisdiction of incorporation)
            
            (I.R.S.
                Employer Identification No.)





Bella
                Drive, Westminster, Massachusetts
            
            01473(Address
                of principal executive offices)
            
            (Zip
                Code)Issuer’s
                telephone number: (978)
                874-0591





Securities
      registered under Section 12(b) of the Exchange Act: None


Securities
      registered under Section 12(g) of the Exchange Act: Title of class: Common
      stock, par value $.0001 per share





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act: o





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes x   No o




Check
      here if there is no disclosure of delinquent filers in response to Item 405
      of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o




Indicate
      by check mark whether the registrant is a shell company (as defined in rule
      12b-2 of the Exchange Act. Yes o   No x.




State
      issuer’s revenue for its most recent fiscal year: $___________




The
      aggregate market value of the registrant’s common stock held by non-affiliates
      of the registrant is not determinable since there is no market for the common
      stock.




There
      were 12,962,995 shares of the Company’s common stock, $.0001 par value,
      outstanding as of June 9, 2008.




Transitional
      Small Business Disclosure Format (Check one): Yes o   No x




**DOCUMENTS
      INCORPORATED BY REFERENCE:** None












*Table
        of Contents*




**TABLE
      OF CONTENTS**




**Page**PART
                  IItem
                  1. Description of Business
              1Item
                  2. Description of Property
              10Item
                  3. Legal Proceedings
              11Item
                  4. Submission of Matters to a Vote of Security
                  Holders
              11PART
                  IIItem
                  5. Market for Common Equity and Related Stockholder
                  Matters
              11Item
                  6.Management’s
                  Discussion and Analysis
              12Item
                  7. Financial Statements
              21Item
                  8. Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure
              21Item
                  8A(T). Controls and
                  Procedures
              21Item
                  8B. Other Information
              22PART
                  IIIItem
                  9. Directors, Executive Officers, Promoters and Control
                  Persons; Compliance with Section 16(a) of the Exchange
                  Act
              23Item
                  10. Executive Compensation
              24Item
                  11. Security Ownership of Certain Beneficial Owners
                  and Management and Related Stockholder Matters
              27Item
                  12. Certain Relationships and Related Transactions and
                  Director Independence
              28Item
                  13. Exhibits
              28Item
                  14. Principal Accountant Fees and
                  Services
              30SIGNATURES
              31






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**PART
      I**




**Item
      1. Description of Business.**




**Our
      Business**




Through
      our wholly-owned subsidiary, Ranor, Inc., we manufacture metal fabricated and
      machined precision components and equipment. These products are used in a
      variety of markets including: alternative energy, medical, nuclear, defense,
      industrial, and aerospace. Our goal is to be an end-to-end service provider
      to
      our customers by furnishing customized and integrated “turn-key” solutions for
      completed products requiring custom fabrication and machining, assembly,
      inspection and testing.




We
      work
      with our customers to manufacture products in accordance with the customers’
drawings and specifications. Our work complies with specific national and
      international codes and standards applicable to our industry. We believe that
      we
      have earned our reputation through outstanding technical expertise, attention
      to
      detail, and a total commitment to quality and excellence in customer
      service.




**About
      Us**




We
      are a
      Delaware corporation, organized in 2005 under the name Lounsberry Holdings
      II,
      Inc. On February 24, 2006, we acquired all of the issued and outstanding capital
      stock of Ranor, Inc., a Delaware corporation that, together with its
      predecessors, has been in continuous operations since 1956. Since February
      24,
      2006, our sole business has been the business of Ranor. On March 6, 2006,
      following the acquisition of Ranor, we changed our corporate name to
      Techprecision Corporation. Our acquisition of Ranor is accounted for as a
      reverse acquisition. As a result, our financial statements for periods prior
      to
      February 24, 2006 reflect the financial condition and results of operations
      of
      Ranor.




Our
      executive offices are located at Bella Drive, Westminster, MA 01473, telephone
      (978) 874-0591. Our website is www.techprecision.com .
      Information on our website or any other website is not part of this annual
      report.




References
      in this annual report to “we,” “us,” “our” and similar words refer to
      Techprecision Corporation and its subsidiary, Ranor, unless the context
      indicates otherwise.




Our
      wholly-owned subsidiary Ranor, Inc. has been in continuous operation since
      1956.




**General**




Our
      operations are situated on approximately 65 acres in North Central
      Massachusetts. Our 125,000 square foot facility is the home for state-of-the-art
      equipment with the ability to manufacture products as large as 100 tons. We
      offer a full range of services required to transform raw material into precise
      finished products. Our manufacturing capabilities include: fabrication
      operations - cutting, press and roll forming, assembly, welding, heat treating,
      blasting and painting; and machining operations - CNC (computer numerical
      controlled) horizontal and vertical milling centers. We also provide support
      services to our manufacturing capabilities: manufacturing engineering (planning,
      fixture and tooling development, manufacturability), quality control (inspection
      and testing), and production control (scheduling, project management and
      expediting).




All
      manufacturing is done in accordance with our written quality assurance program,
      which meets specific national and international codes, standards, and
      specifications. Ranor holds several certificates of authorization issued by
      the
      American Society of Mechanical Engineers and the National Board of
      Boiler




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and
      Pressure Vessel Inspectors. The standards used are specific to the customer’s
      needs, and we have implemented such standards into our manufacturing
      operations.




**Products**




We
      manufacture a wide variety of products pursuant to customer contracts. We
      manufacture products based on our customer’s needs. We do not distribute
      products on the open market. We do not market any typical product on an on-going
      basis. Although our focus is to provide long-term integrated solutions to our
      customers on continuous production programs, our activities include a variety
      of
      both custom-based and production-based requirements. The custom-based work
      is
      typically either prototype or unique, one-of-a-kind product. The
      production-based work is repeat work or a single product with multiple quantity
      releases. The products provided are not designed by us, in general, and are
      manufactured according to “build-to-print” requirements specified by the
      customer.




The
      change in market demand can be wide and varied and requires our ability to
      adapt
      to the needs of the customer and industry. We are able to transform our
      workforce to manufacture products for customers in different industries.




We
      do not
      own any proprietary product marketed, and we do not manufacture products in
      anticipation of orders. Manufacturing operations do not commence on any project
      without a customer’s purchase order. All contracts cover specific product within
      the capability of our resources.




Examples
      of the industries we serve and the products that we have manufactured during
      recent years include, but are not limited to:




**Alternative
      Energy:**




Proprietary
      solar product


Wind
      turbine components




**Medical:**




Proton
      beam accelerators for cancer treatment




**Nuclear:**




Commercial
      reactor internal components and temporary heads


Spent
      fuel storage and transportation canisters and casks


Material
      handling equipment




**Defense:**




Aircraft
      carrier steam accumulator tanks


DDX
      destroyer prototype propulsion equipment, gun and weapons handling
      equipment


Submarine
      sonar system components, primary shield tank heads and foundations




**Industrial:**




Vacuum
      chambers


Food
      processing equipment


Chemical
      processing equipment


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Pressure
      vessels




**Aerospace:**




Delta
      rocket precision-machined fuel tank bulkheads


F-15
      special equipment pods


Various
      other components, fixtures and tooling




**Source
      of Supply**




Manufacturing
      operations are partly dependent on the availability of raw material. Raw
      material requirements vary with each contract and are specified by the customer
      requirements and specifications. We have established relationships with numerous
      suppliers. We seek to initiate new contacts in order to establish alternate
      sources of material supply to reduce our dependency on any one supplier. The
      purchase of raw material is subject to the customer’s purchase order
      requirements, and not based on speculation or long-term contract awards. Some
      contracts require the use of customer supplied materials in the manufacture
      of
      their product.




Our
      projects include the manufacturing of product of various traditional, as well
      as
      specialty metal alloys. These materials may include, but not be limited to:
      inconel, titanium, stainless steel, high strength steel and other alloys.
      Certain materials are subject to long-lead delivery schedules (based on their
      alloy composition).




During
      the year ended March 31, 2008 the following suppliers accounted for 10% or
      more
      of our purchased material in the fiscal year: Brighton Tru-Edge Heads, which
      provided pressure vessel heads, - 26%; Scot Forge Co., which provided forging
      services, - 13%; and Steel Industries Acquisition, Inc., which provided steel,
      -
      12%. No other suppliers exceeded 10% of our purchases of raw
      material




**Marketing**




We
      maintain an active marketing and sales department both in-house and an
      independent sales representative. We market to our existing customer base and
      we
      initiate contacts with new potential customers through various sources such
      as
      personal contact and trade show participation. A portion of our business is
      the
      result of competitive bidding work while a significant portion is from contract
      negotiation. We believe that the reputation we have earned from our current
      customers represents an important aspect of our marketing effort.




Requests
      for quotations received from customers are reviewed to determine the specific
      requirements and our capability to meet these requirements. Quotations are
      prepared by estimating the material and labor costs and assessing our current
      backlog to determine our delivery commitments. Competitive bid quotations are
      submitted to the customer for review and award of contract. Negotiation bids
      typically require the submission of additional information to substantiate
      the
      quotation. The bidding process can range from several weeks for a competitive
      bid, to several months for a negotiation bid before the customer awards a
      contract.




**Principal
      Customers**




A
      significant portion of our business is generated by a small number of “major”
customers. The balance is made of numerous additional customers in our customer
      base. As the industry and markets change, our major customers may also change.




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Currently,
      our largest customer, in the year ending March 31, 2008 and in the year ending
      March 31, 2007 is GT Solar Inc. Their work constituted 51% of the revenue on
      March 31, 2008. Our business is dependent on the purchase orders received from
      our customers for work, and at this time we do not have any long-term contracts
      with any customer. Our customer base consists of many businesses in the markets
      identified above.




The
      following table sets forth the revenue, both in dollars and as a percentage
      of
      total revenue, generated by each customer that accounted for 10% or more of
      our
      revenue in either of the two past fiscal years (dollars in
      thousands):




Year
                Ended March 31,2008
            
            2007Customer
            
            Dollars
            
            Percent
            
            Dollars
            
            PercentGT
                Solar Inc.
            
            $
            16,143
            
            
            51
            %
            $
            3,407
            
            
            18
            %BAE
                Systems
            
            
            5,434
            
            
            17
            %
            
            130
            
            
            1
            %General
                Dynamics Electric Boat
            
            
            1,769
            
            
            6
            %
            
            2,587
            
            
            14
            %Essco/L3
                Communications
            
            
            1,275
            
            
            4
            %
            
            2,415
            
            
            13
            %


GT
      Solar
      is an alternative energy company that engaged us to provide a component for
      its
      proprietary solar related product.




BAE
      Systems is a major defense contractor that engaged us to provide fabrication
      and
      machining services for military components constructed of large exotic alloy
      forgings and ancillary equipment.




General
      Dynamics Electric Boat is a major defense contractor that engaged us for the
      fabrication, machining and assembly of a number of components for a classified
      project for the United States Navy.




Essco/L3
      Communications is a company that engaged us in the fabrication, machining and
      assembly of several components for a classified project for the Air
      Force.




For
      each
      of these customers, the manufacturing of the product and the generation of
      revenue is from the purchase orders issued to us for completion of the different
      aspects of the projects.




As
      of
      March 31, 2008, we had a backlog of firm orders totaling approximately $33.4
      million, of which approximately $22.8 million represents orders from GT
      Solar.  We anticipate that this backlog will be shipped during the year
      ended March 31, 2009. The backlog includes orders for more than $1.0 million
      from three customers in addition to GT Solar. In addition, subsequent to March
      31, 2008, we received an order from GT Solar which exceeds $25 million, and
      we
      expect to deliver that order during the years ended March 31, 2009 and 2010.




**Competition**




In
      the
      manufacture of metal fabricated and machined precision components and equipment
      we have competition from both domestic and foreign manufacturers. As no one
      company dominates the industry, we compete against companies that are both
      larger and smaller in size and capacity. Some may be better known with greater
      resources at their disposal, and some have lower production costs. For certain
      products, being a domestic manufacturer may be a factor. For other products,
      we
      may be undercut by foreign manufacturers who have a lower cost of production.
      If
      a contracting party has a relationship with a vendor and is required to place
      a
      contract for bids, the preferred vendor may provide or assist in
      the




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development
      of the specification for the product which may be tailored to that vendor’s
      products. In such event, we would be at a disadvantage in seeking to obtain
      that
      contract. We believe that customers focus on such factors as the quality of
      work, the reputation of the vendor, the perception of the vendor’s ability to
      meet the required schedule, and the price in selecting a vendor for their
      products.




**Government
      Regulations**




Although
      we do not have any contracts with government agencies, some of our manufacturing
      services are provided as a subcontractor to a government contractor. As a
      result, the prime contractors subject to government procurement and acquisition
      regulations, which give the government the right of termination for the
      convenience of the government and certain renegotiation rights as well as a
      right of inspection. As a result, any government action which affects our
      customers would affect us. Some of the work we perform for our customers is
      part
      of government appropriation packages, and therefore, subject to the Miller
      Act,
      requiring the prime contractors (our customers) to pay all subcontractors under
      contracted purchase agreements first. Because of the nature and use of our
      products, we are subject to compliance with quality assurance programs, which
      are a condition for our bidding on government contracts and subcontracts. We
      believe we are in compliance with these programs.




We
      are
      also subject to laws applicable to any manufacturing company, such as federal
      and state occupational health and safety laws, as well as environmental laws,
      which are discussed in under “Environmental Compliance.”




**Environmental
      Compliance**




We
      are
      subject to compliance with federal, state and local environmental laws and
      regulations that involve the use, disposal and cleanup of substances regulated
      by those laws and the filing of reports with environmental agencies, and we
      are
      subject to periodic inspections to monitor our compliance.




During
      the past three fiscal years, we have not been in full compliance with applicable
      environmental regulations. Some failures of compliance resulted from the failure
      of Ranor to perform necessary remediation prior to our acquisition of Ranor.
      Others resulted from our failure to file required reports. We have completed
      the
      remediation and we believe that we are in compliance with applicable
      environmental regulations. Our
      costs
      incurred as a result of our failure to comply with applicable environmental
      laws
      and regulations was $106,000 in the year ended March 31, 2008, $50,000 for
      the year ended March 31, 2007, and $87,000 for the year ended March 31, 2006.




We
      believe that we are currently in compliance with applicable environmental
      regulations. As part of our normal business practice we are required to develop
      and file reports and maintain logbooks that document all environmental issues
      within our organization. In this connection, we may engage outside consultants
      to assist us in keeping current on developments in environmental regulations.
      We
      do not believe that our cost of compliance on an annual basis will exceed
      $50,000.




**Intellectual
      Property Rights**




We
      have
      no patent rights. In the course of our business we develop know-how for use
      in
      the manufacturing process. Although we have non-disclosure policies, we cannot
      assure you that we will be able to protect our intellectual property rights.
      We
      do not believe that our business requires patent or similar protection. Because
      of the nature of our business as a contract manufacturer, we do not believe
      that
      lack of ownership of intellectual property will adversely affect our
      operations.




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**Research
      and Development**




We
      did
      not incur any research and development expenses, either on our own behalf or
      on
      behalf of our customers, during the year ended March 31, 2008 or
      2007.




**Personnel**




As
      of
      March 31, 2008, we had 148 employees, of whom 19 are administrative, nine are
      engineering and 120 are manufacturing personnel. All of our employees are full
      time. None of our employees is represented by a labor union, and we believe
      that
      our employee relations are good.




**Risk
      Factors**




An
      investment in our securities involves a high degree of risk. In determining
      whether to purchase our securities, you should carefully consider all of the
      material risks described below, together with the other information contained
      in
      this prospectus before making a decision to purchase our securities. You should
      only purchase our securities if you can afford to suffer the loss of your entire
      investment.




**Risks
      Relating To Our Business**




*Because
      we may require additional financing to expand our operations, our failure to
      obtain necessary financing may impair our operations.*




At
      March
      31, 2008, we had working capital of approximately $6.4 million. The only funding
      presently available to us, other than our cash flow from operations, is a $3.0
      million capital equipment facility and a $2.0 million revolving credit line
      with
      a bank. We contemplate that we will expand our business during the next twelve
      months. The expansion of our facilities will require financing and our decision
      to commence the expansion will be based on our backlog of orders and anticipated
      growth in our business. The failure to obtain the necessary financing as well
      as
      the failure to generate the business necessary to keep the expanded facilities
      operation on a full-time basis could affect both our cash flows and our ability
      to operate profitably. We cannot assure you that these credit facilities will
      be
      sufficient to provide us with the funds necessary to enable us to perform our
      obligations under our contracts and to develop our business. Our failure to
      obtain any required financing could impair our ability to both serve our
      existing clients base and develop new clients and could result in both a
      decrease in revenue and an increase in our loss.




To
      the
      extent that we require financing, the terms of our February 2006 private
      placement and the number of outstanding warrants and the exercise price and
      other terms on which we may issue common stock upon exercise of the warrants,
      it
      may be difficult for us to raise additional equity capital if required for
      our
      present business or for any planned expansion. We cannot assure you that we
      will
      be able to get additional financing on any terms, and, if we are able to raise
      funds, it may be necessary for us to sell our securities at a price which is
      at
      a significant discount from the market price and on other terms which may be
      disadvantageous to us. In connection with any such financing, we may be required
      to provide registration rights to the investors. The price and terms of any
      financing which would be available to us could result in the issuance of a
      significant number of shares. Further, since Barron Partners, the investor
      in
      the February 2006 private placement, has a right of first refusal with respect
      to future financings, this right may affect our ability to obtain financing
      from
      other sources.




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*Because
      our contracts are individual purchase orders and not long-term agreements,
      the
      results of our operations can vary significantly from quarter to
      quarter.*




We
      currently do not have long-term contracts with our customers, and major
      contracts with a small number of customers account for a significant percentage
      of our revenue. We must bid or negotiate each contract separately, and when
      we
      complete a contract, there is generally no continuing source of revenue under
      that contract. As a result, we cannot assure you that we have a continuing
      stream of revenue from any contract. Our failure to generate new business on
      an
      ongoing basis would materially impair our ability to operate profitably. Because
      a significant portion of our revenue is derived from services rendered from
      the
      alternative energy, nuclear, medical, defense, industrial, aerospace and related
      industries, our operating results may suffer from conditions affecting these
      industries, including any budgeting, economic or other trends that have the
      effect of reducing the requirements for our services




*Because
      of our dependence on a limited number of customers, our failure to generate
      major contracts from a small number of customers may impair our ability to
      operate profitably.*




We
      have,
      in the past, been dependent in each year on a small number of customers who
      generate a significant portion of our business, and these customers change
      from
      year to year. For the year ended March 31, 2008 our largest customer accounted
      for 51% of our revenue and our two largest customers accounted for 68% of our
      revenue. For the year ended March 31, 2007, our three largest customers
      accounted for approximately 44% of our revenue, with the largest accounting
      for
      17.9% of our revenue. In addition, as of March 31, 2008, we had a $33.4
      million order backlog, of which $29.0 million was attributable to four
      customers. As a result, the default in payment by any of our major customers,
      the loss of existing orders or to the extent that we are unable to generate
      orders from new customers, we may have difficulty operating profitably.
      Furthermore, to the extent that any one customer accounts for a large percentage
      of our revenue, the loss of that customer could materially affect our ability
      to
      operate profitably. Since
      one customer, GT Solar, Inc., accounted for 51% of our revenue in the year
      ended
      March 31, 2008 and 68% of our backlog at March 31, 2008, the loss of this
      customer would have a material adverse effect upon our business and may impair
      our ability to operate profitably. We anticipate that our dependence on a
      limited number of customers in any given fiscal year will continue for the
      foreseeable future. There is a risk that existing customers will elect not
      to do
      business with us in the future or will experience financial difficulties.
      Furthermore, many of our customers are at an early stage and many are dependent
      on the equity capital markets to finance their purchase of our products. As
      a
      result, these customers could experience financial difficulties, business
      reverses or lose orders or anticipated orders which reduces or eliminates the
      need for the products which they ordered from us, as a result of which they
      could be unable or unwilling to fulfill their contracts with us. There is also
      a
      risk that our customers will attempt to impose new or additional requirements
      on
      us that reduce the profitability of those customers for us. Further, even if
      the
      orders are not changed, these orders may not generate margins equal to our
      recent historical results. If we do not develop relationships with new
      customers, we may not be able to increase, or even maintain, our revenue, and
      our financial condition, results of operations, business and/or prospects may
      be
      materially adversely affect.




*Because
      of the nature of our business, we are subject to environmental regulations,
      we
      have in the past failed to comply with these regulations, and our failure to
      comply with these regulations has in the past resulted in, and could in the
      future result in, increased costs as well as penalties for violation of these
      regulations.*




As
      a
      manufacturing business, we must comply with federal and state environmental
      laws
      and regulations which relate to the manner in which we store and dispose of
      materials and the reports that we are required to file. In the past, we have
      not
      been in compliance with all environmental regulations and, consequently, we
      have
      experienced increased costs and penalties. Any future non-compliance could
      result in both significant costs to become compliant as well as penalties which
      we may be required to pay as a result of non-compliance. We cannot assure you
      that we will not incur additional costs to maintain




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compliance
      with environmental laws and regulations or that we will not incur significant
      penalties for failure to be in compliance.




*Changes
      in delivery schedules and order specifications may affect our revenue
      stream.*




Although
      we perform manufacturing services pursuant to orders placed by our customers,
      we
      have in the past experienced delays in the scheduling and changes in the
      specification of the products. These changes may result from a number of
      factors, including a determination by the customer that the product
      specifications need to be changed after receipt of an initial product or
      prototype. As a result of these changes, we suffered a delay in the recognition
      of revenue from the projects. We cannot assure you that our revenue will not
      be
      affected in the future by delays or changes in specifications or that we will
      ever be able to recoup revenue which was lost as a result of the delays or
      changes. In the past our revenue for a period of one or two quarters was
      affected by the postponement of one contract after the delivery of the initial
      unit and a delay in delivery under a second contract that was postponed and
      restarted as a result of a change in the customer’s drawings resulting in a
      decline in revenue on a period to period basis. Further, if we cannot allocate
      our personnel to a different project, we will continue to incur some expenses
      relating to the project, including labor and overhead. Thus, if orders are
      postponed our net income would be impacted by our need to maintain staffing
      for
      the postponed projects, even though they were not fully utilized during this
      period. We cannot assure you that our income will not decline in future periods
      as a result of changes in customers’ orders or their requirements for the
      products that they ordered.




*If
      we make any acquisitions, they may disrupt or have a negative impact on our
      business.*




Although
      we have no present plans for any acquisitions, in the event that we make
      acquisitions, we could have difficulty integrating the acquired companies’
personnel and operations with our own. In addition, the key personnel of the
      acquired business may not be willing to work for us. We cannot predict the
      affect expansion may have on our core business. Regardless of whether we are
      successful in making an acquisition, the negotiations could disrupt our ongoing
      business, distract our management and employees and increase our expenses.
      In
      addition to the risks described above, acquisitions are accompanied by a number
      of inherent risks, including, without limitation, the following:




·
            the
                difficulty of integrating acquired products, services, assets,
                intellectual property or operations;·
            the
                potential disruption of the ongoing businesses and distraction of
                our
                management and the management of acquired companies;·
            difficulties
                in maintaining uniform standards, controls, procedures and
                policies;·
            the
                potential impairment of relationships with employees and customers
                as a
                result of any integration of new management personnel;·
            the
                potential inability or failure to achieve additional sales and enhance
                our
                customer base through cross-marketing of the products to new and
                existing
                customers;·
            potential
                unknown liabilities associated with acquired businesses or product
                lines,
                or the need to spend significant amounts to retool, reposition or
                modify
                the marketing and sales of acquired products or the defense of any
                litigation, whether of not successful, resulting from actions of
                the
                acquired company prior to our acquisition.







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Our
      business could be severely impaired if and to the extent that we are unable
      to
      succeed in addressing any of these risks or other problems encountered in
      connection with these acquisitions, many of which cannot be presently
      identified.




**Risks
      Related to our Common Stock and the Market for our Common
      Stock**




*The
      rights of the holders of common stock may be impaired by the potential issuance
      of preferred stock.*




Our
      certificate of incorporation gives our board of directors the right to create
      new series of preferred stock. As a result, the board of directors may, without
      stockholder approval, issue preferred stock with voting, dividend, conversion,
      liquidation or other rights which could adversely affect the voting power and
      equity interest of the holders of common stock. Preferred stock, which could
      be
      issued with the right to more than one vote per share, could be utilized as
      a
      method of discouraging, delaying or preventing a change of control. The possible
      impact on takeover attempts could adversely affect the price of our common
      stock. Although we have no present intention to issue any additional shares
      of
      preferred stock or to create any new series of preferred stock and the
      certificate of designation relating to the series A preferred stock restricts
      our ability to issue additional series of preferred stock, we may issue such
      shares in the future. Without the consent of the holders of 75% of the
      outstanding shares of series A preferred stock, we may not alter or change
      adversely the rights of the holders of the series A preferred stock or increase
      the number of authorized shares of series A preferred stock, create a class
      of
      stock which is senior to or on a parity with the series A preferred stock,
      amend
      our certificate of incorporation in breach of these provisions or agree to
      any
      of the foregoing.




*The
      issuance of shares through our stock compensation plans may dilute the value
      of
      existing stockholders and may affect the market price of our
      stock.*




We
      may
      use stock options, stock grants and other equity-based incentives, to provide
      motivation and compensation to our officers, employees and key independent
      consultants. The award of any such incentives will result in an immediate and
      potentially substantial dilution to our existing stockholders and could result
      in a decline in the value of our stock price. The exercise of these options
      and
      the sale of the underlying shares of common stock and the sale of stock issued
      pursuant to stock grants may have an adverse effect upon the price of our
      stock.




*Because
      of our cash requirements and restrictions in our preferred stock purchase
      agreement, we may be unable to pay dividends.*




In
      view
      of the cash requirements of our business, we expect to use any cash flow
      generated by our business to finance our operations and growth. Further, we
      are
      prohibited from paying dividends on our common stock while the series A
      preferred stock is outstanding.




*Our
      stock price may be affected by our failure to meet projections and estimates
      of
      earnings developed either by us or by independent securities
      analysts.*




Although
      we do not make projections relating to our future operating results, our
      operating results may fall below the expectations of securities analysts and
      investors. In this event, the market price of our common stock would likely
      be
      materially adversely affected.




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*We
      are required to pay liquidated damages if we do not maintain a board consisting
      of a majority of independent directors.*




The
      purchase agreement relating to the February 2006 private placement requires
      us
      to maintain a board of directors on which a majority of directors are
      independent directors and an audit committee composed solely of independent
      directors and the compensation committee will have a majority of independent
      directors. Although we presently meet these requirements, our failure to
      continue to meet these requirements in the future could result in our payment
      of
      liquidated damages that could be payable in cash or by the issuance of
      additional shares of series A preferred stock, as the investors shall determine.
      Our maximum liability under this provision is $396,000.




*Because
      the holder of our warrants has cashless exercise rights, we may not receive
      proceeds from the exercise of the outstanding warrants if the underlying shares
      are not registered.*




The
      holders of our warrants have cashless exercise rights, which provide them with
      the ability to receive common stock with a value equal to the appreciation
      in
      the stock price over the exercise price of the warrants being exercised. This
      right is not exercisable if the underlying shares are subject to an effective
      registration statement, and accordingly, the holders have the cashless
      registration rights until the effective date of the registration statement
      and
      thereafter if the warrants are not subject to a current and effective
      registration statement. Since we have not registered all of the shares of common
      stock issuable upon exercise of the warrants, the holders of those warrants,
      which cover the right to purchase 9,320,000 shares of common stock, have
      cashless exercise rights with respect to the underlying shares. To the extent
      that the holders of the warrants exercise this right, we will not receive
      proceeds from such exercise.




*The
      issuance and sale of the common stock issuable upon conversion of the series
      A
      preferred stock and exercise of the warrants could result in a change of
      control.*




If
      we
      issue all of the shares of common stock issuable upon conversion of the series
      A
      preferred stock and exercise of the warrants, the 19,995,974 shares of common
      stock so issuable would constitute approximately 67% of our then outstanding
      common stock. The percentage would increase to the extent that we are required
      to issue any additional shares of common stock become upon conversion of the
      series A preferred stock pursuant to the anti-dilution and adjustment provisions
      and pursuant to the liquidated damages provision of the registration rights
      agreement. Any sale of all or a significant percentage of those shares to a
      person or group could result in a change of control.




**Item
      2. Description of Property.**




We
      lease
      from WM Realty Management, LLC, which is an affiliated company, an approximately
      136,000-square foot office and manufacturing facility at Bella Drive,
      Westminster, Massachusetts 01473, pursuant to a 15-year lease that expires
      February 28, 2021, at a current annual rental of $450,000, subject to annual
      escalations based upon increases in the consumer price index. The lease provides
      for two five-year extensions and a purchase option at appraised value.




We
      also
      lease approximately 12,720 square feet of manufacturing **** space
      in
      Fitchburg, Massachusetts from an unaffiliated party. The lease provides for
      an
      annual rent of $50,112 with 3% annual increases. The lease expires in February
      2009, and is renewable for a five year term. We have the option to purchase
      the
      property at the appraised market value.




Although
      our current facilities are adequate for present requirements, we believe that
      we
      may need to expand our manufacturing facilities in order for us to expand our
      business. However, as of the date of this report, we have not entered into
      agreements with respect to the expansion of our facilities.




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**Item
      3. Legal Proceedings.**




We
      are
      not a defendant in any material legal proceedings.




**Item
      4. Submission of Matters to a Vote of Security
      Holders.**




None.




**PART
      II**




**Item
      5. Market for Common Equity and Related Stockholder
      Matters.**




Our
      common stock is traded on the Over the Counter Bulletin Board under the symbol
      TPCS. However, there is currently no regular market or trading in the Company’s
      common stock, and we cannot give an assurance that such a market will develop. The
      following table sets forth the high and low bid quotations per share of our
      common stock as reported on the OTC Bulletin Board for the periods commencing
      November 7, 2007, when trading in our stock commenced, through March 31, 2008.
      The high and low bid quotations reflect inter-dealer prices, without retail
      mark-up, mark-down or commission and may not necessarily represent actual
      transactions.




Period
            
            High
                Bid
            
            Low
                BidNovember
                7 , 2007 to March 31, 2008
            
            $
            3.90
            
            $
            1.40




As
      of May
      31, 2008, we had approximately 83 record holders of our common stock.




We
      have
      not paid dividends on our common stock, and the terms of certificate of
      designation relating to the creation of the series A preferred stock prohibit
      us
      from paying dividends. We plan to retain future earnings, if any, for use in
      our
      business. We do not anticipate paying dividends on our common stock in the
      foreseeable future.




As
      of
      March 31, 2008, we had the following shares of common stock reserved for
      issuance:




•
            9,173,974
                shares issuable upon conversion of the series A preferred
                stock.




•
            9,710,000
                shares issuable upon exercise of the warrants held by Barron
                Partners.




•
            1,000,000
                shares issuable upon exercise of stock options or other equity-based
                incentives pursuant to our 2006 long-term incentive plan. As of April
                30,
                2008, there were outstanding options to purchase 371,659 shares of
                common
                stock. We intend to file a registration statement on Form S-8 with
                respect
                to the shares of common stock issuable pursuant to this plan.




•
            112,500
                shares issuable upon exercise of a warrant granted to an investor
                relations firm




The
      9,173,974 shares of common stock issuable upon conversion of the series A
      preferred stock held by Barron Partners may be sold pursuant to Rule 144. Barron
      Partners has registration rights with respect to these shares and the shares
      issuable upon exercise of the warrants held by Barron Partners.




Our
      insiders, who held 6,860,200 shares of common stock at May 31, 2008, may not
      sell the shares acquired at the time of the reverse acquisition for a period
      of
      twelve months following the February 24, 2006 closing. Thereafter, none of
      these
      stockholders may sell more than 10% of his or her shares in the public market
      in
      the twelve-month period following the expiration of the lock-up period or more
      than an additional 10% of his or her shares during the following twelve-month
      period, which is the period ended February 23, 2009. Thereafter, there are
      no
      contractual restrictions on the sale of their




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shares.
      Although these stockholders have demand and piggyback registration rights,
      we
      are not subject to any liquidated damages in the event that we fail to satisfy
      our obligations to register the shares. However, since these shares may be
      sold
      pursuant to Rule 144, we will not be required to register these
      shares.




**Equity
      Compensation Plan Information**




The
      following table summarizes the equity compensation plans under which our
      securities may be issued as of March 31, 2008.




Plan
                Category
            
            Number
                of securities to be issued upon exercise of outstanding optionsand
                warrants
            
            Weighted-average
                exercise price of outstanding optionsand warrants
            
            Number
                of securities remaining available for future issuance under
                equitycompensation plansEquity
                compensation plans approved by security holders
            
            
            371,659
            
            $
            .285
            
            
            641,341Equity
                compensation plan not approved by security holders
            
            
            112,500
            
            $
            1.40
            
            
            —


No
      unregistered securities were sold during the year ended March 31, 2008.




**Item
      6.****Management’s
      Discussion and Analysis**




**Statement
      Regarding Forward Looking Disclosure**




The
      following discussion of the results of our operations and financial condition
      should be read in conjunction with our financial statements and the related
      notes, which appear elsewhere. This annual report of on Form 10-KSB, including
      this section entitled “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. Forward-looking statements include, but are not limited to, statements
      that express our intentions, beliefs, expectations, strategies, predictions
      or
      any other statements relating to our future activities or other future events
      or
      conditions. These statements are based on current expectations, estimates and
      projections about our business based in part on assumptions made by management.
      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, and probably will, differ materially from what is
      expressed or forecasted in the forward-looking statements due to numerous
      factors. Those factors include those risks discussed under “Risk Factors” in
      Item 1 and “Management’s Discussion and Analysis” in this Form 10-KSB and those
      described in any other filings which we make with the SEC. In addition, such
      statements could be affected by risks and uncertainties related to our ability
      to generate business on an on-going business, to obtain any required financing,
      to receive contract awards from the competitive bidding process, maintain
      standards to enable us to manufacture products to exacting specifications,
      enter
      new markets for our services, market and customer acceptance, our reliance
      on a
      small number of customers for a significant percentage of our business,
      competition, government regulations and requirements, pricing and development
      difficulties, our ability to make acquisitions and successfully integrate those
      acquisitions with our business, as well as general industry and market
      conditions and growth rates, and general economic conditions. Any
      forward-looking statements speak only as of the date on which they are made,
      and
      we do not undertake any obligation to update any forward-looking statement
      to
      reflect events or




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circumstances
      after the date of this report. Investors should evaluate any statements made
      by
      the Company in light of these important factors.




**Overview**




We
      offer
      a full range of services required to transform raw material into precise
      finished products. Our manufacturing capabilities include: fabrication
      operations - cutting, press and roll forming, assembly, welding, heat treating,
      blasting and painting; and machining operations - CNC (computer numerical
      controlled) horizontal and vertical milling centers. We also provide support
      services to our manufacturing capabilities: manufacturing engineering (planning,
      fixture and tooling development, manufacturability), quality control (inspection
      and testing), and production control (scheduling, project management and
      expediting).




All
      manufacturing is done in accordance with our written quality assurance program,
      which meets specific national and international codes, standards, and
      specifications. Ranor holds several certificates of authorization issued by
      the
      American Society of Mechanical Engineers and the National Board of Boiler and
      Pressure Vessel Inspectors. The standards used are specific to the customer’s
      needs, and we have implemented such standards into our manufacturing
      operations.




In
      recent
      years, the capital goods market experienced a slow down due to industry over
      build of product in the late 1990’s coupled together with the events of
      September 11, 2001. However, over the last several years, and based on recent
      project inquiries, recent projects awarded and current customer demands for
      our
      services and our backlog, we believe the market has rebounded. However,
      we would be affected by recessionary pressures to the extent that they affect
      the requirements of our customers.




A
      significant portion of our revenue is generated by a small number of customers
      who differ from period to period as we complete work on projects or commence
      new
      projects for other customers. In the year ended March 31, 2008, our largest
      customer, GT Solar, accounted for approximately 51% of our revenue, and our
      second largest customer, BAE Systems, accounted for approximately 17% of
      revenue. For the year ended March 31, 2007, our largest customer, GT Solar,
      accounted for 18% of our revenue and our largest three customers accounted
      for
      45% of our revenue.




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 and our financial
      condition. We believe, based on increased requests for quotations, that there
      is
      an increasing demand for services of the type which we perform. We have changed
      the manner in which we treat potential business. In the past, our contracts
      generally called for one or a limited number of units, and once we complete
      our
      work on a contract, we generally do not receive subsequent orders for the same
      product. Although some of our contracts contemplate the manufacture of one
      or a
      limited number of units, we have are seeking more long-term projects with a
      more
      predictable cost structure, and we are rejecting or not bidding on projects
      we
      do not believe would generate an adequate gross margin. As a result of the
      implementation of this strategy, in the year ended March 31, 2008, our sales
      and
      net income were $31,805,146 and $3,515,935, respectively, as compared to
      revenues of $19,086,209 and a net income of $290,225, respectively, for the
      previous fiscal year. Our gross margin for the year ended March 31, 2008 was
      26%
      as compared to 19% in the year ended March 31, 2007.




Because
      our revenues are derived from the sale of goods manufactured pursuant to a
      contract, and we do not sell from inventory, it is necessary for us to
      constantly seek new contracts. There may be a time lag between our completion
      of
      one contract and commencement of work on another contract. During this period,
      we will continue to incur our overhead expense but with lower revenue.
      Furthermore, changes in




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the
      scope
      of a contract may impact the revenue we receive under the contract and the
      allocation of manpower.




Although
      we provide manufacturing services for large governmental programs, we usually
      do
      not work directly for agencies of the United States government. Rather, we
      perform our services for large governmental contractors and large utility
      companies. However, our business is dependent in part on the continuation of
      governmental programs which require the services we provide.




**Growth
      Strategy**




Our
      strategy is to leverage our core competence as a manufacturer of high-precision,
      large metal fabrications to expand our business into areas which have shown
      increasing demand and which we believe could generate higher
      margins.




We
      believe that rising energy demands along with increasing environmental concerns
      are likely to continue to drive demand in the alternative energy industry,
      particularly the solar and nuclear power industries. Because of our capabilities
      and the nature of the equipment required by companies in the alternative energy
      industries, we intend to focus our services in this sector.




As
      a
      result of both the increased prices of oil and gas and the resulting greenhouse
      gas emissions, nuclear power may become an increasingly important source of
      energy. Because we have certification from the American Society of Mechanical
      Engineers, along with our historic relationships with suppliers in the industry,
      we believe that we have the qualifications to benefit from any increased
      activity in the nuclear sector that may result. One of our customers is
      currently involved in a variety of commercial nuclear reactor repairs and
      overhaul projects. We have manufactured several components needed to support
      this work. Another customer provides a complete nuclear waste storage system
      to
      commercial nuclear power plants. We manufacture lifting equipment for this
      company to use in these storage systems. We also see the fabrication of medical
      isotopes storage systems as a potential business area. However, revenues derived
      from the nuclear industry were insignificant for the year ended March 31, 2008
      and currently do not constitute a significant portion of our backlog at March
      31, 2009. We cannot assure you that we will be able to develop any significant
      business from the nuclear industry.




As
      an
      example of our plan for diversification, we are currently working with a medical
      customer to manufacture critical components for proton beam therapy machines
      designed to be used to treat cancer.




We
      plan
      to expand our current manufacturing facilities in the near-term both at our
      present locations and in other locations. We believe that this expansion will
      allow us to increase our overall industry offerings and capacity, allowing
      us to
      handle high volume orders or niche orders simultaneously. However, this
      expansion will require financing which may not be available on acceptable terms,
      if any.




We
      plan
      to offer more integrated products and turnkey solutions to provide greater
      value
      to our customers. We may target acquisitions that could enhance our existing
      business, although we are not engaged in any discussions or negotiations with
      respect to any acquisition.




As
      of
      March 31, 2008, we had a backlog of firm orders totaling approximately $33.4
      million.  We anticipate that this backlog will be shipped during the year
      ended March 31, 2009. The backlog includes orders for more than $1.0 million
      from three customers in addition to GT Solar, which accounts for approximately
      68% of our backlog. In addition, subsequent to March 31, 2008, we received
      an
      order from GT Solar which exceeds $25 million, and we expect to deliver the
      orders during the years ended March 31, 2009 and 2010.




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**Critical
      Accounting Policies**




The
      preparation of the Company’s financial statements in conformity with generally
      accepted accounting principles in the United States requires our management
      to
      make assumptions, estimates and judgments that effect the amounts reported
      in
      the financial statements, including all notes thereto, and related disclosures
      of commitments and contingencies, if any. We rely on historical experience
      and
      other assumptions we believe to be reasonable in making our estimates. Actual
      financial results of the operations could differ materially from such estimates.
      There have been no significant changes in the assumptions, estimates and
      judgments used in the preparation of our audited 2008 financial statements
      from
      the assumptions, estimates and judgments used in the preparation of our 2007
      audited financial statements.




**Revenue
      Recognition and Costs Incurred**




We
      derive
      revenues from (i) the fabrication of large metal components for our customers;
      (ii) the precision machining of such large metal components, including
      incidental engineering services; and (iii) the installation of such components
      at the customers’ locations when the scope of the project requires such
      installations.




Revenue
      and costs are recognized on the units of delivery method. This method recognizes
      as revenue the contract price of units of the product delivered during each
      period and the costs allocable to the delivered units as the cost of earned
      revenue. When the sales agreements provide for separate billing of engineering
      services, the revenues for those services are recognized when the services
      are
      completed. Costs allocable to undelivered units are reported in the balance
      sheet as costs incurred on uncompleted contracts. Amounts in excess of agreed
      upon contract price for customer directed changes, constructive changes,
      customer delays or other causes of additional contract costs are recognized
      in
      contract value if it is probable that a claim for such amounts will result
      in
      additional revenue and the amounts can be reasonably estimated. Revisions in
      cost and profit estimates are reflected in the period in which the facts
      requiring the revision become known and are estimable. The unit of delivery
      method requires the existence of a contract to provide the persuasive evidence
      of an arrangement and determinable seller’s price, delivery of the product
      and reasonable collection prospects. The Company has written agreements with
      the
      customers that specify contract prices and delivery terms. The Company
      recognizes revenues only when the collection prospects are
      reasonable.




Adjustments
      to cost estimates are made periodically, and losses expected to be incurred
      on
      contracts in progress are charged to operations in the period such losses are
      determined and are reflected as reductions of the carrying value of the costs
      incurred on uncompleted contracts. Costs incurred on uncompleted contracts
      consist of labor, overhead, and materials. Work in process is stated at the
      lower of cost or market and reflects accrued losses, if required, on uncompleted
      contracts.




**Variable
      Interest Entity**




We
      have
      consolidated WM Realty Management, a variable interest entity from which we
      lease our real estate, to conform to FASB Interpretation No. 46, “Consolidation
      of Variable Interest Entities” (FIN 46). We have also adopted the revision to
      FIN 46, FIN 46 (R), which clarified certain provisions of the original
      interpretation and exempted certain entities from its requirements. ****




**Income
      Taxes**




We
      provide for federal and state income taxes currently payable, as well as those
      deferred because of temporary differences between reporting income and expenses
      for financial statement


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purposes
      versus tax purposes. Deferred tax assets and liabilities are recognized for
      the
      future tax consequences attributable to differences between carrying amount
      of
      assets and liabilities for financial reporting purposes and the amounts used
      for
      income tax purposes. Deferred tax assets and liabilities are measured using
      the
      enacted tax rates expected to apply to taxable income in the years in which
      those temporary differences are expected to be recoverable. The effect of the
      change in the tax rates is recognized as income or expense in the period of
      the
      change. A valuation allowance is established, when necessary, to reduce deferred
      income taxes to the amount that is more likely than not to be realized. As
      of
      March 31, 2008, we had tax assets of approximately $672,000 from net operating
      loss carry-forwards and sources. As a result of the change in ownership
      resulting for the acquisition of Ranor in February 2006, our annual usage of
      the
      tax benefit of the tax loss-carryforward pursuant to Section 382 of the Internal
      Revenue Code and the treasury regulations is limited to approximately
      $24,863.




**New
      Accounting Pronouncements**




In
      December 2007, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised
      2007), *Business
      Combinations* ,
      which
      replaces SFAS No 141. The statement retains the purchase method of accounting
      for acquisitions, but requires a number of changes, including changes in the
      way
      assets and liabilities are recognized in the purchase accounting. It also
      changes the recognition of assets acquired and liabilities assumed arising
      from
      contingencies, requires the capitalization of in-process research and
      development at fair value, and requires the expensing of acquisition-related
      costs as incurred. SFAS No. 141R is effective for the Company’s fiscal year
      beginning April 1, 2009 and will apply prospectively to business
      combinations completed on or after that date.




In
      December 2007, the FASB issued SFAS No. 160, *Non-Controlling
      Interests in Consolidated Financial Statements, an amendment of ARB
      51* ,
      which
      changes the accounting and reporting for minority interests. Minority interests
      will be re-characterized as non-controlling interests and will be reported
      as a
      component of equity separate from the parent’s equity, and purchases or sales of
      equity interests that do not result in a change in control will be accounted
      for
      as equity transactions. In addition, net income attributable to the
      non-controlling interest will be included in consolidated net income on the
      face
      of the income statement and, upon a loss of control, the interest sold, as
      well
      as any interest retained, will be recorded at fair value with any gain or loss
      recognized in earnings. SFAS No. 160 is effective for the Company’s fiscal
      years beginning April 1, 2009 and will apply prospectively, except for the
      presentation and disclosure requirements, which will apply retrospectively.
      The
      adoption of SFAS No. 160 does not have an effect on our financial position
      or
      results of operation.




On
      July 1, 2007, we adopted the provisions of FASB Interpretation No. 48
      (“FIN 48”), *Accounting
      for Uncertainty in Income Taxes - an interpretation of FASB Statement
      No. 109,* which
      provides a financial statement recognition threshold and measurement attribute
      for a tax position taken or expected to be taken in a tax return. Under FIN
      48,
      we may recognize the tax benefit from an uncertain tax position only if it
      is
      more likely than not that the tax position will be sustained on examination
      by
      the taxing authorities, based on the technical merits of the position. The
      tax
      benefits recognized in the financial statements from such a position should
      be
      measured based on the largest benefit that has a greater than 50% likelihood
      of
      being realized upon ultimate settlement. FIN 48 also provides guidance on
      de-recognition of income tax assets and liabilities, classification of current
      and deferred income tax assets and liabilities, accounting for interest and
      penalties associated with tax positions, and income tax disclosures. The
      adoption of FIN 48 does not have a material effect on our financial position
      or
      results of operation.




On
      July 1, 2007, we adopted Emerging Issues Task Force Issue No. 06-2
      (“EITF 06-2”), *Accounting
      for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement
      No. 43* .
      EITF


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06-2
      requires companies to accrue the costs of compensated absences under a
      sabbatical or similar benefit arrangement over the requisite service period.
      The
      adoption of EITF 06-2 does not have an affect the Company’s financial position
      or results of operation.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 provides
      reporting entities an option to report selected financial assets, including
      investment securities designated as available for sale, and liabilities,
      including most insurance contracts, at fair value. SFAS 159 establishes
      presentation and disclosure requirements designed to facilitate comparisons
      between companies that choose different measurement attributes for similar
      types
      of assets and liabilities. The standard also requires additional information
      to
      aid financial statement users’ understanding of a reporting entity’s choice to
      use fair value on its earnings and also requires entities to display on the
      face
      of the balance sheet the fair value of those assets and liabilities for which
      the reporting entity has chosen to measure at fair value. SFAS 159 is effective
      as of the beginning of a reporting entity’s first fiscal year beginning after
      November 15, 2007. Early adoption is permitted as of the beginning of the
      previous fiscal year provided the entity makes that choice in the first 120
      days
      of that fiscal year and also elects to apply the provisions of SFAS 157. The
      Company adopted SFAS No. 159. The application of SFAS No. 159 is not expected
      to have a material effect on the Company’s financial position or results of
      operations.




**Results
      of Operations**




**Year
      Ended March 31, 2008 and 2007**




The
      following table sets forth information from our statements of operations for
      the
      years ended March 31, 2008 and 2007, in dollars and as a percentage of revenue
      (dollars in thousands):




Changes
                Year
              Ended
                March 31,2008
            
            2007
            
            2008
                to 2007Amount
            
            Percent
            
            Amount
            
            Percent
            
            Amount
            
            PercentNet
                sales
            
            $
            31,805
            
            
            100
            %
            $
            19,086
            
            
            100
            %
            $
            12,719
            
            
            67
            %Cost
                of sales
            
            
            23,473
            
            
            74
            %
            
            15,543
            
            
            81
            %
            
            7,930
            
            
            51
            %Gross
                profit
            
            
            8,332
            
            
            26
            %
            
            3,543
            
            
            19
            %
            
            4,789
            
            
            135
            %Payroll
                and related costs
            
            
            1,228
            
            
            4
            %
            
            1,209
            
            
            6
            %
            
            19
            
            
            2
            %Professional
                expense
            
            
            291
            
            
            1
            %
            
            498
            
            
            3
            %
            
            (207
            )
            
            (42
            )%Selling,
                general and administrative
            
            
            411
            
            
            1
            %
            
            390
            
            
            2
            %
            
            21
            
            
            5
            %Total
                operating expenses
            
            
            1,931
            
            
            6
            %
            
            2,098
            
            
            11
            %
            
            (167
            )
            
            (8
            )%Income
                (loss) from operations
            
            
            6,402
            
            
            20
            %
            
            1,446
            
            
            8
            %
            
            4,956
            
            
            343
            %Interest
                expense, net
            
            
            (512
            )
            
            (2
            )%
            
            (628
            )
            
            (3
            )%
            
            (116
            )
            
            (18
            )%Finance
                costs
            
            
            (17
            )
            
            0
            %
            
            (289
            )
            
            (2
            )%
            
            (272
            )
            
            (94
            )%Income
                before income taxes
            
            
            5,874
            
            
            18
            %
            
            530
            
            
            3
            %
            
            5,344
            
            
            1008
            %Provision
                for income taxes, net
            
            
            (2,358
            )
            
            (7
            )%
            
            (240
            )
            
            (1
            )%
            
            2,118
            
            
            882
            %Net
                Income
            
            $
            3,516
            
            
            11
            %
            $
            290
            
            
            2
            %
            $
            3,226
            
            
            1112
            %Deemed
                dividend to preferred shareholders
            
            
            -
            
            
            -
            
            
            (676
            )
            
            (4
            )%
            
            676
            
            
            --Income
              to common shareholders
            
            
            3,516
            
            
            -
            
            
            (386
            )
            
            (2
            )%
            
            3,902
            
            
            1011
            %






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Sales
      increased by $12.7 million, or 67%, from $19.1 million for the year ended March
      31, 2007 to $31.8 million for the year ended March 31, 2008. This increase
      in
      sales reflected improved market conditions for capital goods and our business
      refocus as stated earlier. A significant portion of the increase resulted from
      a
      $12.7 million increase in sales to GT Solar and a $5.3 million increase in
      sales
      to BAE Systems.




Our
      cost
      of sales for the year ended March 31, 2008 increased by $7.9 million, to $23.5
      million, an increase of 51%, from $15.5 million for year ended March 31, 2007.
      The increase in cost of sales reflected the increase in sales and gross margin,
      with the result that our gross margin increased from 19% to 26%. With the
      increased orders from GT Solar and our marketing efforts focused on long range
      contracts with more predictable cost structures and avoiding projects that
      we
      believe are not likely to generate an adequate margin we were able to
      significantly improve our gross margin. More efficient manufacturing procedures
      additionally contributed to our increased profitability.




Our
      payroll and related costs were $1.2 million for the year ended March 31, 2008
      as
      compared to $1.2 million for the year ended March 31, 2007. The $19,000 (2%)
      increase in payroll was partly attributable to the increased sales and related
      compensation of sales persons.




Professional
      fees decreased from $498,000 for the year ended March 31, 2007 to $391,000 for
      the
      year ended March 31, 2008. This decrease was attributable a decrease in the
      number of our regulatory filings of the company with a resulting decrease in
      associated fees.




Selling,
      administrative and other expenses for the year ended March 31, 2008 were
      $411,000 as compared to $390,000 for year ended March 31, 2007, an increase
      of
      $21,000 or 5%. This increase reflected in part additional costs which we
      incurred when our stock became publicly traded in November


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          18 -
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2007,
      including the value of warrants issued to an investor relations firm, as well
      as
      additional expense incurred as a result of the overall increase in our business.




Interest
      expense for the year ended March 31, 2008 was $512,000 compared to $628,000
      for
      the year ended March 31, 2007. The decrease of $116,000 (19%) is a result of
      refinancing the short term loan of WM Realty Management with a longer term
      loan.
      The refinancing of the loan also eliminated $150,000 amortization expenses
      of
      deferred short term loan costs.




As
      a
      result of the foregoing, our net income allocable to common stockholders was
      $3.5 million ($0.32 per share basic and $0.12 per share diluted) for the year
      ended March 31, 2008, as compared to the loss of $386,000, $0.04 per share
      (basic and diluted),` for the year ended March 31, 2007. The net income
      allocable to common stockholders for the year ended March 31, 2007 reflected
      a
      deemed dividend to preferred stockholders as a result of changes in the
      conversion price of the series A preferred stock because of our failure to
      generate specified levels of earnings before interest, taxes, depreciation
      and
      amortization.




**Liquidity
      and Capital Resources**




At
      March
      31, 2008, we had working capital of $6,392,000 as compared with working capital
      of $3,398,000 at March 31, 2007, an increase of $2,994,000 reflecting our
      increased level of business. The following table sets forth information as
      to
      the principal changes in the components of our working capital (dollars in
      thousands).




Category
            
            March
                31,
              2008
            
            March
                31,
              2007
            
            Change
              Amount
            
            Percentage
              ChangeCash
                and cash equivalents
            
            $
            2,853
            
            $
            1,444
            
            $
            1,409
            
            
            98
            %Accounts
                receivable, net
            
            
            4,509
            
            
            2,701
            
            
            1,808
            
            
            67
            %Costs
                incurred onuncompleted
                contracts
            
            
            4,299
            
            
            1,266
            
            
            3,032
            
            
            239
            %Prepaid
                expenses
            
            
            1,039
            
            
            270
            
            
            769
            
            
            284
            %Accounts
                payable
            
            
            991
            
            
            1,299
            
            
            (308
            )
            
            (24
            )%




The
      cash
      flow from operations was $2.5 million for the year ended March 31, 2008 as
      compared to $1.6 million in 2007. The increase of in cash flows from operations
      of $903,000, or 57%, was the net effect of an increase in the net profits and
      decrease in costs incurred on uncompleted contracts.  The
      net
      cash used in financing activities was $126,000 for the year ended March 31,
      2008
      as compared to outflow of $205,000 for the year ended March 31, 2007. The
      principal payment of the Sovereign bank notes was $571,000 and auto loans
      $7,500, which was offset by $658,000 cash received from the exercise of
      warrants. In addition, since our financial statements include the operations
      of
      WM Realty, our cash flows include the cash flows of WM Realty. During the year
      ended March 31, 2008, WM Realty made mortgage principal reduction payments
      totaling $34,000, repaid a $60,000 loan from a member, had an addition to its
      capital of $17,500 and made a distribution of $129,000 to its
      members.




In
      the
      year ended March 31, 2007, cash flow from financing activities reflected an
      $82,500 addition to WM Realty capital and $415,000 of capital contributed from
      the proceeds of the settlement agreement with previous shareholders.


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We
      invested $716,000 and $431,000 in property plant and equipment during the years
      ended March 31, 2008 and 2007, respectively. We made a deposit of $240,000
      with
      manufacturers to acquire additional equipment in 2008.




Our
      cash
      balance almost doubled from March 31, 2007 to March 31, 2008. The net increase
      in cash was $1.4 million for the year ended March 31, 2008, as compared to
      $951,000 for the year ended March 31, 2007.




As
      part
      of the October 2006 refinancing of the mortgage given by WM Realty on the
      property leased by us, a new mortgage of $3.2 million was placed on the property
      and the existing mortgage of $3.1 million was paid off. The new mortgage has
      a
      term of ten years, bears interest at 6.75% per annum, and provides for monthly
      payments of principal and interest of $21,000. The monthly payments are based
      on
      a thirty-year amortization schedule, with the unpaid principal being due in
      full
      on November 1, 2016. WM Realty has the right to prepay the mortgage note upon
      payment of a prepayment premium of 5% of the amount prepaid if the prepayment
      is
      made during the first two years, and declining to 1% of the amount prepaid
      if
      the prepayment is made during the ninth or tenth year.




During
      the year ended March 31, 2008, WM Realty had a net income of $118,000. The
      accumulated deficit of WM Realty was $312,000 as of March 31, 2008. During
      the
      year ended March 31, 2008, WM Realty members made net capital contributions
      of
      $17,500 and received distributions of $129,000.




We
      have a
      loan and security agreement with Sovereign Bank, pursuant to which we borrowed
      $4.0 million on a term loan basis in connection with the acquisition of Ranor.
      As a result of amendments to the loan and security agreement, we have a $2.0
      million revolving credit facility and a $3.0 million capital expenditure
      facility, which is available to us until November 30, 2009, at which time any
      amounts borrowed under the line are to be amortized over a five year period.
      Pursuant to the agreement, Ranor is required to maintain a ratio of earnings
      available for fixed charges to fixed charges of at least 1.2 to 1, and an
      interest coverage ratio of at least 2:1.




The
      term
      note is due on March 1, 2013, and is payable in quarterly installments of
      $143,000. The note bears interest at 9% per annum through December 31, 2010
      and
      at prime plus 11⁄2% thereafter. At March 31, 2008 the principal balance due on our
      term loan to Sovereign Bank was approximately $2.9 million. The revolving note
      bears interest at prime plus 1⁄2%, and we have the right to borrow at a LIBOR rate
      plus 300 basis points. We may borrow, subject to the borrowing formula at any
      time prior to June 30, 2009. Any advances under the revolving note become due
      on
      June 30, 2009. The maximum borrowing under the revolving note is the lesser
      of
      (i) $2.0 million or (ii) the sum of 70% of eligible accounts receivable and
      40%
      of eligible inventory. At March 31, 2008, there were no borrowings under the
      line and maximum available under the borrowing formula was $2.0
      million.




Under
      our
      capital expenditures facility, we may borrow up to $3.0 million with interest
      at
      prime plus 1⁄2%, with interest only payable until November 30, 2008 and thereafter
      at the bank’s cost of funds rate related to its wholesale liabilities. The
      principal is to be amortized over a five-year term commencing December 1, 2008.
      As of March 31, 2008, we had not borrowed any money under this
      facility.




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




While
      we
      believe that the $2.0 million revolving credit facility, which remained unused
      as of March 31, 2008 and terminates in June 2009, our $3.0 million capital
      expenditure facility and our cash


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flow
      from
      operations should be sufficient to enable us to satisfy our cash requirements
      at
      least through the end of fiscal 2009, it is possible that we may require
      additional funds. In the event that we make an acquisition, we may require
      additional financing for the acquisition. However, we do not have any current
      plans for any acquisition, and we cannot give any assurance that we will make
      any acquisition. We have no commitment from any party for additional funds;
      however, the terms of our agreement with Barron Partners, particularly Barron
      Partners’ right of first refusal, may impair our ability to raise capital in the
      equity markets since potential investors are often reluctant to negotiate a
      financing when another party has a right to match the terms of the
      financing.




On
      December 7, 2007, Ranor acquired all the equipment Vertex Tool and Die, Inc
      for
      $150,000 and assumed Vertex’s real property lease obligation. The current lease
      expires on August 31, 2009, and Ranor has the option to extend the lease for
      an
      additional term of five years.




We
      contemplate that we will expand our business during the next twelve months.
      Although we may use the bank facilities for this purpose, we may require
      additional financing as well. We can give no assurance that any necessary
      financing will be available.




**Item
      7. Financial Statements.**




The
      financial statements begin on Page F-1.




**Item
      8. Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure.**




Not
      Applicable.




**Item
      8A(T).****Controls
      and Procedures.**




Evaluation
      of Disclosure Controls and Procedures.





We
      maintain “disclosure controls and procedures,” as such term is defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange
      Act”), that are designed to ensure that information required to be disclosed by
      us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized, and reported within the time periods specified in
      Securities and Exchange Commission rules and forms, and 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. In designing and evaluating our disclosure
      controls and procedures, management recognized that disclosure controls and
      procedures, no matter how well conceived and operated, can provide only
      reasonable, not absolute, assurance that the objectives of the disclosure
      controls and procedures are met. Additionally, in designing disclosure controls
      and procedures, our management necessarily was required to apply its judgment
      in
      evaluating the cost-benefit relationship of possible disclosure controls and
      procedures. The design of any disclosure controls and procedures also is based
      in part upon certain assumptions about the likelihood of future events, and
      there can be no assurance that any design will succeed in achieving its stated
      goals under all potential future conditions.





As
      of
      March 31, 2008, we carried out an evaluation, under the supervision and with
      the
      participation of our chief executive officer and chief financial officer, of
      the
      effectiveness of the design and operation of our disclosure controls and
      procedures. Based on this evaluation, our chief executive officer and chief
      financial officer concluded that our disclosure controls and procedures were
      effective in ensuring that information required to be disclosed by us in our
      periodic reports is recorded, processed, summarized and reported, within the
      time periods specified for each report and that such information is accumulated
      and communicated to our management, including our principal executive and
      principal




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financial
      officers, or persons performing similar functions, as appropriate to allow
      timely decisions regarding required disclosure.





Management’s
      Report of Internal Control over Financial Reporting.




We
      are
      responsible for establishing and maintaining adequate internal control over
      financial reporting in accordance with Exchange Act Rule 13a-15.  With
      the participation of our chief executive officer and chief financial officer,
      our management conducted an evaluation of the effectiveness of our internal
      control over financial reporting as of March 31, 2008 based on the criteria
      established in *Internal
      Control-Integrated Framework* issued
      by the Committee of Sponsoring Organizations of the Treadway
      Commission.  Based on this evaluation, management concluded that our
      internal control over financial reporting was effective as of March 31, 2008
      based on those criteria.  A control system, no matter how well
      conceived and operated, can provide only reasonable, not absolute, assurance
      that the objectives of the control system are met.  Because of the
      inherent limitations in all control systems, no evaluation of controls can
      provide absolute assurance that all control issues and instances of fraud,
      if
      any, within us have been detected.




This
      annual report does not include an attestation report of the Company’s registered
      accounting firm regarding internal control over financial
      reporting.  Management’s report was not subject to attestation by the
      Company’s registered public accounting firm pursuant to temporary rules of the
      Securities and Exchange Commission.




Changes
      in Internal Controls.




During
      the three months ended March 31, 2008, there were no changes in our internal
      control over financial reporting identified in connection with the evaluation
      required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially
      affected, or is reasonably likely to materially affect, our internal control
      over financial reporting.




**Item
      8B. Other Information.**




Not
      Applicable






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**PART
      III**




**Item
      9. Directors, Executive Officers, Promoters and Control Persons;
      Compliance with Section 16(a) of the Exchange Act.**




**Directors
      and Executive Officers**




The
      following table sets forth certain information concerning our directors and
      executive officers.




Name
            
            Age
            
            PositionJames
                G. Reindl
            
            49
            
            Chairman
                and chief executive officerMary
                Desmond
            
            44
            
            Chief
                financial officer and secretaryStanley
                A. Youtt
            
            62
            
            Director
                and chief executive officer of RanorMichael
                R. Holly1
            
            62
            
            DirectorLarry
                A. Steinbrueck1
            
            56
            
            DirectorLouis
                A. Winoski1
            
            49
            
            Director





(1)
            Member
                of the audit and compensation
                committees.




James
      G.
      Reindl has been a director, chairman and chief executive officer since February
      2006. From 2002 until January 2007, Mr. Reindl was president of TechPrecision,
      LLC, a company that was formed in 2002 to acquire, manage and develop smaller
      to
      mid-sized companies in the aerospace, military and precision manufacturing
      industry sectors. Mr. Reindl received his Bachelor of Science degree in
      mechanical aerospace engineering from the University of Delaware.




Mary
      Desmond has been our chief financial officer since February 2006, and she has
      been the chief financial officer of Ranor since 1998. Ms. Desmond obtained
      her
      Bachelor of Science degree in accounting from Franklin Pierce College and she
      received her Masters of Business (MBA) from Fitchburg State
      College.




Stanley
      A. Youtt has been a director since February 2006, and he has been chief
      executive officer of Ranor since 2000. Mr. Youtt received a Bachelor of Science
      degree in naval architecture and marine engineering from the University of
      Michigan and Masters Degree in civil engineering (applied mechanics) from the
      University of Connecticut.




Michael
      R. Holly has been a director since March 2006. Since 2004, Mr. Holly has been
      a
      private investor and consultant. From 1996 until 2004, Mr. Holly was managing
      director of Safeguard International Fund, L.P., a private equity fund of which
      Mr. Holly is a founding partner. Mr. Holly has a Bachelor of Science degree
      in
      economics from Mount St. Mary’s College.




Larry
      R.
      Steinbrueck has been a director since March 2006. Since 1991, Mr. Steinbrueck
      has been president of MidWest Capital Group, an investment banking firm. Mr.
      Steinbrueck has a Bachelor of Science degree in business and a Masters in
      Business Administration from the University of Missouri.




Louis
      A.
      Winoski has been a director since March 2006. Since 2002, Mr. Winoski has been
      managing partner of Homeric Partners, LLC, a management consulting business.
      Mr.
      Winoski has a Bachelor of Science degree in industrial and systems management
      engineering from Pennsylvania State University.




Our
      directors are elected for a term of one year. None of our officers and directors
      are related.




**Board
      Committees**




The
      board
      of directors has two committees, the audit committee and the compensation
      committee. Michael Holly, Larry Steinbrueck and Louis Winoski, each of whom
      is
      an independent director, are the members of both committees. Mr. Holly is the
      audit committee financial expert and chairman of the audit committee and Mr.
      Winoski is chairman of the compensation committee.


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**Code
      of Ethics**




Our
      board
      of directors has adopted a code of business conduct and ethics for its officers
      and employees.




**Section
      16(a) Compliance**




Section
      16(a) of the Securities Exchange Act of 1934, requires our directors, executive
      officers and persons who own more than 10% of our common stock to file with
      the
      SEC initial reports of ownership and reports of changes in ownership of common
      stock and other of our equity securities.




**Item
      10. Executive Compensation.**




**SUMMARY
      COMPENSATION TABLE**




Set
      forth
      below is information for the year ended March 31, 2008 and 2007 for our chief
      executive officer, the chief executive officer of Ranor and our chief financial
      officer. No other officer received compensation of more than $100,000 for the
      year ended March 31, 2008.




Name
                and Position
            
            Fiscal
              Year
            
            Salary
            
            Bonus
            
            Stock
              Awards
            
            Option
              Awards
            
            All
                Other
              Compensation
            
            TotalJames
                G. Reindl,
              chief
                executiveofficer
            
            
            2008
              2007
            
            $
            160,000
              24,615
            
            $
            —
              —
            
            $
            —
              —
            
            $
            —
              —
            
            $
            —
              75,000
            
            $
            160,000
              99,615Stanley
                A. Youtt,
              chief
                executiveofficer
                - Ranor
            
            
            2008
              2007
            
            
            198,016
              198,016
            
            
            —
              —
            
            
            —
              —
            
            
            —
              —
            
            
            —
              —
            
            
            198,016
              198,016Mary
                Desmond,
              chief
                financialofficer
            
            
            2008
              2007
            
            
            103,846
              89,870
            
            
            5,000
              —
            
            
            855
              —
            
            
            —
              —
            
            
            —
              —
            
            
            109,701
              89,870




Other
      compensation for Mr. Reindl in the year ended March 31, 2007 represents the
      amounts paid by us to TechPrecision, LLC, a company in which Mr. Reindl was
      president, during the months of February through December 2006. During this
      period, we had a management contract with TechPrecision, LLC, pursuant to which
      TechPrecision LLC provided the services of Mr. Reindl as our chief executive
      officer and we did not pay any compensation directly to Mr. Reindl. The total
      payments to TechPrecision LLC were $55,000 during the year ended March 31,
      2008
      and $185,000 during the year ended March 31, 2007. The other members are Andrew
      A. Levy, a major stockholder, and Martin M. Daube.




We
      also
      reimbursed Mr. Reindl for his travel expenses from his home to our offices
      in
      Westminster, Massachusetts, which were $ 24,827 for the year ended March
      31, 2008 and $29,039 for the year ended March 31, 2007.




In
      April
      2007, we granted Ms. Desmond 3,000 shares of common stock and an option to
      purchase 25,000 shares of common stock at $.285, being the fair value on the
      date of grant.




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**Employment
      Agreements**




We
      have
      employment agreements with Mr. Reindl, Mr. Youtt, and Ms. Desmond.




In
      February 2006, contemporaneously with our acquisition of Ranor, Ranor entered
      into an employment agreement with Stanley A. Youtt pursuant to which he would
      serve as our chief executive officer for a term of three year term ending on
      February 28, 2009. Pursuant to the agreement, we pay Mr. Youtt salary at the
      annual rate of $200,000. Mr. Youtt is also eligible for performance bonuses
      based on financial performance criteria set by the board. In the event that
      we
      terminate Mr. Youtt’s employment without cause, we are required to make a
      lump-sum payment to him equal to his base compensation for the balance of the
      term and to provide the insurance coverage that we would provide if he remained
      employed.




On
      June
      19, 2007, we entered into an employment agreement dated as of April 1, 2007
      with
      James G. Reindl, our chief executive officer. Pursuant to the terms of the
      agreement, we will employ Mr. Reindl for an initial term commencing April 1,
      2007 and expiring on March 31, 2009 and continuing on a year-to-year basis
      thereafter unless terminated by either party on 90 days’ written notice prior to
      the expiration of the initial term or any one-year extension. Mr. Reindl is
      to
      receive an annual base salary of $160,000 a year. Mr. Reindl is also entitled
      to
      receive an increase to his base salary and receive certain bonus compensation,
      stock options or other equity-based incentives at the discretion of the
      compensation committee of the board of directors and reimbursement of his
      commuting expenses. The agreement may be terminated by us with or without cause
      or by Mr. Reindl’s resignation. If we terminate the agreement without cause, we
      are to pay Mr. Reindl severance pay equal to his salary for the balance of
      the
      term plus the amount of his bonus for the prior year. During the term of his
      employment and for a period thereafter, Mr. Reindl will be subject to
      non-competition and non-solicitation provisions, subject to standard
      exceptions.




On
      June
      19, 2007, we entered into an employment contract with Mary Desmond, our Chief
      Financial Officer, dated retroactively to April 1, 2007. Pursuant to the terms
      of this agreement, the Company is employing Ms. Desmond for an initial term
      commencing April 1, 2007 and expiring March 31, 2009 and continuing on a
      year-to-year basis thereafter unless terminated by either party on 90 days
      written notice prior to the expiration of the initial term or any one-year
      extension. Ms. Desmond is to receive an annual salary of $110,000 a year. Ms.
      Desmond is also entitled to receive an increase to her base salary and receive
      certain bonus compensation, stock options or other equity based incentives
      at
      the discretion of the compensation committee of the board of directors. The
      agreement may be terminated by us with or without cause or by Ms. Desmond’s
      resignation. If the Company terminates the agreement without cause, the Company
      is to pay Ms. Desmond severance pay equal to her salary for the balance of
      the
      term plus the amount of her bonus received in the prior year. During the term
      of
      her employment and for a period thereafter, Ms. Desmond will be subject to
      non-competition and non-solicitation provisions, subject to standard exceptions.




**Directors’
      Compensation**




Commencing
      with the year ending March 31, 2007, we pay our independent directors a fee
      of
      $2,000 per meeting. In addition, our 2006 long-term incentive plan provides
      for
      the grant of non-qualified options to purchase 50,000 shares, exercisable in
      installments, to each newly elected independent director and annual grants
      of
      options to purchase 5,000 shares of common stock commencing with the third
      with
      year of service as a director, as described under “2006 Long-Term Incentive
      Plan.”




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**2006
      Long-Term Incentive Plan**




In
      February 2006, our board of directors adopted, and in July 2006 it amended,
      and
      in October 2006, our stockholders approved, the 2006 long-term incentive plan
      covering 1,000,000 shares of common stock. The plan provides for the grant
      of
      incentive and non-qualified options, stock grants, stock appreciation rights
      and
      other equity-based incentives to employees, including officers, and consultants.
      The 2006 Plan is to be administered by a committee of not less than two
      directors each of whom is to be an independent director. In the absence of
      a
      committee, the plan is administered by the board of directors. Independent
      directors are not eligible for discretionary options. As initially adopted,
      each
      newly elected independent director received at the time of his election, a
      five-year option to purchase 25,000 shares of common stock at the market price
      on the date of his or her election. Pursuant to the amendment to the plan,
      the
      number of shares subject to the initial option grant was increased to 50,000
      shares, with the option being exercisable as to 30,000 shares in July 2006
      and
      as to 10,000 shares in each of February 2007 and 2008. In addition, the plan
      provides for the annual grant of an option to purchase 5,000 shares of common
      stock on July 1st of each year, commencing July 1, 2009. For each independent
      director who is elected after July 31, 2006, the director will receive an option
      to purchase 50,000 shares at an exercise price equal to the fair market value
      on
      the date of his or her election. The option vest as to 30,000 shares nine months
      from the date of grant and as 10,000 shares on each of the first and second
      anniversaries of the date of grant. These directors will receive an annual
      grant
      of an option to purchase 5,000 shares of common stock on the July 1st coincident
      with or following the third anniversary of the date of his or her first
      election. Pursuant to the plan, we granted non-qualified stock options to
      purchase 50,000 shares of common stock to our three independent directors -
      Michael Holly, Larry Steinbrueck and Louis Winoski - at an exercise price of
      $.285 per share, which was determined to be the fair market value on the date
      of
      grant. On April 1, 2006, we granted incentive stock options to purchase a total
      of 221,659 shares of common stock to our key employees, including Mary Desmond,
      our chief financial officer, who received an option to purchase 25,000 shares.
      The options are immediately exercisable at an exercise price of $.285 per share,
      which the compensation committee determined to be the fair market value on
      the
      date of grant.




Options
      intended to be incentive stock options must be granted at an exercise price
      per
      share which is not less than the fair market value of the common stock on the
      date of grant and may have a term which is not longer than ten years. If the
      option holder holds 10% of our common stock, the exercise price must be at
      least
      110% of the fair market value on the date of grant and the term of the option
      cannot exceed five years.




Option
      holders do not recognize taxable income on the grant of such either incentive
      or
      non-qualified stock options. When employees exercise incentive stock options,
      they will not recognize taxable income upon exercise of the option, although
      the
      difference between the exercise price and the fair market value of the common
      stock on the date of exercise is included in income for purposes of computing
      their alternative minimum tax liability, if any. If certain holding period
      requirements are met, their gain or loss on a subsequent sale of the stock
      will
      be taxed at capital gain rates. Generally, long-term capital gains rates will
      apply to their full gain at the time of the sale of the stock, provided that
      they do not dispose of the stock made within two years from the date of grant
      of
      the option or within one year after your acquisition of such stock, and the
      option is exercised while they are employed by us or within three months of
      the
      termination of their employment or one year in the event of death or disability,
      as defined in the Internal Revenue Code.




In
      general, upon the exercise of a non-qualified option, the option holder will
      recognize ordinary income in an amount equal to the difference between the
      exercise price of the option and the fair market value of the shares on the
      date
      they exercise the option. Subject to certain limitations, we may deduct that
      amount an expense for federal income tax purposes. In general, when the holders
      of shares issued on exercise of a nonqualified stock option sell their shares,
      any profit or loss is short-term or long-term




-
          26 -
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capital
      gain or loss, depending upon the holding period for the shares and their basis
      in the shares will be the fair market value on the date of
      exercise.




As
      of May
      31, 2007, there were outstanding options to purchase 150,000 shares which we
      issued to our independent directors pursuant to provision of the 2006 Plan
      that
      provide for the automatic grant of options to independent directors, and
      outstanding options to purchase 211,660 shares of common stock which were
      granted to employees on April 1, 2007, of which options to purchase 25,000
      shares were granted to Ms. Desmond. Except for the options granted to Ms.
      Desmond on April 1, 2007, no options were granted to any of the individuals
      named in the summary compensation table. All
      outstanding options have an exercise price of $.285, which was determined to
      be
      the fair market value on the date of grant.




At
      fiscal
      year end, no person named in the summary compensation table held any options
      or
      stock appreciation rights.




**Item
      11. Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters.**




The
      following table provides information as to shares of common stock beneficially
      owned as of May 31, 2008 by:




·
            each
                director;




·
            each
                officer named in the summary compensation
                table;




·
            each
                person owning of record or known by us, based on information provided
                to
                us by the persons named below, to own beneficially at least 5% of
                our
                common stock; and




·
            all
                directors and officers as a group.




Name
            
            Shares
            
            PercentageJames
                G. Reindl
              One
                Bella Drive
              Westminster,
                MA 01473
            
            
            2,587,100
            
            
            20.0
            %Andrew
                A. Levy
              46
                Baldwin Farms North
              Greenwich,
                CT 06831
            
            
            2,382,100
            
            
            18.4
            %Howard
                Weingrow
              805
                Third Avenue
              New
                York, NY 10022
            
            
            1,850,000
            
            
            14.3
            %Stanoff
                Corporation
              805
                Third Avenue
              New
                York, NY 10022
            
            
            1,700,000
            
            
            13.1
            %Stanley
                A. Youtt
              One
                Bella Drive
              Westminster,
                MA 01473
            
            
            1,592,000
            
            
            12.3
            %Larry
                Steinbrueck
            
            
            254,000
            
            
            2.0
            %Michael
                Holly
            
            
            135,000
            
            
            1.0
            %Louis
                A. Winoski
            
            
            50,000
            
            
            *Mary
                Desmond
            
            
            38,000
            
            
            *All
                officers and directors as a group (six individuals)
            
            
            4,656,100
            
            
            35.9
            %





*
            Less
                than 1%




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          27 -
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Except
      as
      otherwise indicated each person has the sole power to vote and dispose of all
      shares of common stock listed opposite his name. Each person is deemed to own
      beneficially shares of common stock which are issuable upon exercise or warrants
      or options or upon conversion of convertible securities if they are exercisable
      or convertible within 60 days of May 31, 2007.




Howard
      Weingrow, as president of Stanoff Corporation, has voting and dispositive
      control over the shares owned by Stanoff Corporation. Because Mr. Weingrow
      has
      voting and dispositive control over the shares owned by Stanoff, the shares
      owned by Stanoff are deemed to be beneficially owned by Mr. Weingrow. Thus,
      the
      number of shares beneficially owned by Mr. Weingrow includes the 1,700,000
      shares owned by Stanoff Corporation and the 150,000 shares owned by Mr. Weingrow
      individually.




The
      shares owned by Mr. Steinbrueck,
      Mr. Holly and Mr. Winoski include shares of common stock issuable upon exercise
      of currently exercisable options to purchase 50,000 shares of common stock
      which
      are held by each of them. The shares owned by Ms. Desmond include 25,000 shares
      issued upon exercise of options.




Barron
      Partners owns shares of series A preferred stock and warrants which, if fully
      converted or exercised, would result in ownership of more than 4.9% of our
      outstanding common stock. However, the series A preferred stock may not be
      converted and the warrants may not be exercised if such conversion would result
      in Barron Partners owning more than 4.9% of our outstanding common stock. The
      applicable instruments provide that this limitation may not be waived. As a
      result, Barron Partners does not beneficially own 5% or more of our common
      stock.




**Item
      12. Certain Relationships and Related Transactions and Director
      Independence**




Mr.
      Reindl, Mr. Levy and Mr. Daube may be deemed to be our founders.




We
      lease
      our facilities in Westminster, Massachusetts from WM Realty Management, which
      is
      controlled by Andrew A. Levy, a principal stockholder. We currently pay an
      annual rental of $450,000, which is subject to increase based on increases
      in
      the cost of living index. We also have a right to purchase the property at
      fair
      market value.




**Item
      13. Exhibits.**




2.1
            Stock
                purchase agreement dated August 17, 2005, by and among Ranor Acquisition,
                LLC, the stockholders of Ranor and Ranor, Inc.13.1
            Certificate
                of incorporation13.2
            By-laws23.3
            Certificate
                of Designation for the Series A Convertible Preferred Stock44.1
            Loan
                and security agreement dated February 24, 2006, between Ranor and
                Sovereign Bank14.2
            Guaranty
                from the Registrant to Sovereign Bank14.3
            Form
                of warrant issued to Barron Partners LP14.4
            First
                amendment dated January 29, 2007 to loan and security agreement dated
                February 24, 2006, between Ranor, Inc. and Sovereign Bank and forms
                of
                notes64.5
            Second
                amendment dated June , 2007 to loan and security agreement dated
                February
                24, 2006, between Ranor, Inc. and Sovereign Bank and forms of revolving
                note14.6
            Mortgage
                security agreement and fixture filing dated October 4, 2006, from
                WM
                Realty Management, LLC to Amalgamated Bank14.7
            Mortgage
                note dated October 4, 200614.8
            Third
                Amendment dated Novemeber 30, 2007 to loan and security agreement
                dated
                February 24, 2006, between Ranor, Inc. and Sovereign Bank and form
                of
                amended and restated note 3.






-
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10.1
            Preferred
                stock purchase agreement dated February 24, 2006, between the Registrant
                and Barron Partners, LP110.2
            Registration
                rights agreement dated February 24, 2006, between the Registrant
                and
                Barron Partners LP110.3
            Agreement
                dated February 24, 2006, among the Registrant, Ranor Acquisition
                LLC and
                the members of Ranor Acquisition LLC110.4
            Subscription
                Agreement dated February 24, 2006110.5
            Registration
                rights provisions pursuant to the agreements listed in Exhibits 10.3
                and
                10.4110.6
            Employment
                agreement between the Registrant and Stanley Youtt110.7
            Management
                agreement dated February 24, 2006, between Ranor and Techprecision
                LLC410.8
            Lease,
                dated February 24, 2006 between WM Realty Management, LLC and
                Ranor110.9
            2006
                Long-term incentive plan410.10
            Letter
                agreement from WM Realty Management, LLC110.11
            Settlement
                agreement and general release dated February 13, 2007, among the
                Company,
                Green Mountain Partners III, L.P.610.12
            Letter
                agreement dated January , 2007 between Techprecision Corporation
                and
                Techprecision LLC710.13
            Limited
                guarantee dated October 4, 2006 from Andrew Levy to Amalgamated
                Bank110.14
            Employment
                agreement dated as of April 1, 2007 between the Company and James
                G.
                Reindl810.15
            Employment
                agreement dated April 1, 2007 between the Company and Mary
                Desmond.310.16
            Purchase
                order from Electric Boat Corporation dated November 9, 2006110.17
            Purchase
                order from GT Solar Incorporated dated January 22, 20071,1010.18
            Purchase
                order from L3 Communications ESSCO dated March 29, 2006114.1
            Code
                of business conduct and ethics421.1
            List
                of Subsidiaries923.1
            Consent
                of independent registered public accounting firm331.1
            Certification
                of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002331.2
            Certification
                of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002332.1
            Certification
                of chief executive officer and chief financial officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act of 20023





1
            Filed
                as an exhibit to the Company’s registration statement on Form SB-2, File
                No. 333-133509, and incorporated hereby by
                reference.


2
            Filed
                as an exhibit to the Company’s registration statement on Form 10-SB, which
                was filed with the Commission on June 23, 2005 and incorporated herein
                by
                reference.


3
            Filed
                herewith.


4
            Filed
                as an appendix to the Company’s information statement of Schedule 14-C,
                and incorporated herein by
                reference.


5
            Filed
                as an exhibit to the Company’s annual report on Form 10-KSB for the year
                ended December 31, 2005 and incorporated hereby
                reference.


6
            Filed
                as an exhibit to the Company’s current report on Form 8-K, which was filed
                with the commission on February 20,
                2007.


7
            Filed
                as an exhibit to the Company’s current report on Form 8-K, which was filed
                with the commission on February 8,
                2007.


8
            Filed
                as an exhibit to the Company’s current report on Form 8-K, which was filed
                with the commission on June 26, 2007.


9
            Filed
                as an exhibit to the Company’s annual report on Form 10-KSB for the year
                ended March 31, 2007 and incorporated herein by
                reference


10
            Confidential
                treatment requested.




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          29 -
 *Table
          of Contents*




**Item
      14. Principal Accountant Fees and
      Services.**




The
      following is a summary of fees for professional services rendered by Tabriztchi
      & Co., CPA, P.C., formerly known as Bloom & Co., LLP (“Tabriztchi”), our
      independent registered public accounting firm, for the years ended March 31,
      2008 and 2007 as follows:




Year
                ended March 31,2008
            
            2007Audit
                fees
            
            $
            65,970
            
            $
            75,088Audit
                related fees
            
            
            -0-
            
            
            8,062Tax
                fees
            
            
            -0-
            
            
            1,800All
                other fees
            
            
            -0-
            
            
            -0-Total
            
            $
            65,970
            
            $
            84,950




*Audit
      fees.* Audit
      fees represent fees for professional services performed by Tabriztchi for the
      audit of our annual financial statements and the review of our quarterly
      financial statements, as well as services that are normally provided in
      connection with statutory and regulatory filings or engagements.




*Audit-related
      fees.* Audit-related
      fees represent fees for assurance and related services performed by Tabriztchi
      that are reasonably related to the performance of the audit or review of our
      financial statements. These services include the review of our registration
      statement of Form SB-2 and communications with SEC regarding 10-KSB and 10-QSB
      forms filed in 2006.




*Tax
      Fees.* Tax
      fees
      represent fees for tax compliance services performed by Tabriztchi.




*All
      other fees.* There
      were no other fees paid to Tabriztchi.




Policy
      on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
      of
      Independent  Auditors




The
      audit
      committee’s policy is to pre-approve all audit and permissible non-audit
      services provided by the independent registered public accounting firm. These
      services may include audit services, audit-related services, tax services and
      other services. The independent registered public accounting firm and management
      are required to periodically report to the audit committee regarding the extent
      of services provided by the independent registered public accounting firm in
      accordance with this pre- approval,
      and the fees for the services performed to date. The audit committee may also
      pre-approve particular services on a case-by-case basis. All services were
      pre-approved by the audit committee.






-
            30 -
 *Table
            of Contents*




**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 hereunto
      duly authorized.




TECHPRECISION
      CORPORATION


(Registrant)


Dated:
      June 23, 2008




/s/
      James
      G. Reindl


James
      G.
      Reindl, Chief Executive Officer





Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      report has been signed by the following persons on behalf of the Registrant
      and
      in the capacities and on the dates indicated. Each person whose signature
      appears below hereby authorizes James G. Reindl and Mary Desmond or either
      of
      them acting in the absence of the others, as his or her true and lawful
      attorney-in-fact and agent, with full power of substitution and resubstitution
      for him or her and in his or her name, place and stead, in any and all
      capacities to sign any and all amendments to this report, and to file the same,
      with all exhibits thereto and other documents in connection therewith, with
      the
      Securities and Exchange Commission.




Signature
            
            Title
            
            Date/s/James
                G. Reindl
            
            Chairman
                of the board, chief executive officer and director
            
            June
                23, 2008James
                G. Reindl
            
            (Principal
                Executive Officer)/s/Mary
                Desmond
            
            Chief
                financial officer
            
            June
                23, 2008Mary
                Desmond
            
            (Principal
                Financial and Accounting Officer)/s/Stanley
                A. Youtt
            
            Director
            
            June
                19, 2008Stanley
                A. Youtt/s/Michael
                R. Holly
            
            Director
            
            June
                19, 2008Michael
                R. Holly/s/Larry
                Steinbrueck
            
            Director
            
            June
                19, 2008Larry
                Steinbrueck/s/
                Louis A. Winoski
            
            Director
            
            June
                19, 2008Louis
                A. Winoski






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          of Contents*






**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**FOR
      THE YEARS ENDED MARCH 31, 2008 AND 2007**




Report
                  of Independent Registered Public Accounting
                  Firm
              F-2Consolidated
                  Balance Sheetsat
                  March 31, 2008 and 2007
              F-3Consolidated
                  Statements of Operationsfor the years endedMarch
                  31, 2008 and 2007
              F-4Consolidated
                  Statements of Stockholders’ Equityfor the years endedMarch
                  31, 2008 and 2007
              F-5Consolidated
                  Statements of Cash Flowsfor the years endedMarch
                  31, 2008 and 2007
              F-6Notes
                  to Consolidated Financial
                  Statements
              F-8






F-1
 *Table
          of Contents*









**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM**




To
      the
      Board of Directors and


Stockholders
      of Techprecision Corporation




We
      have
      audited the accompanying consolidated balance sheets of Techprecision
      Corporation as of March 31, 2007 and 2008, and the related consolidated
      statements of operations, stockholders’ equity, and cash flows for each of the
      two years in the period ended March 31, 2008. These financial statements are
      the
      responsibility of the Company’s management. Our responsibility is to express an
      opinion on these financial statements based on our audits.




We
      conducted our audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements. An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall financial statement presentation. We believe that our audits provide
      a
      reasonable basis for our opinion.




In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the consolidated financial position of Techprecision
      Corporation as of March 31, 2008 and 2007, and the consolidated results of
      its
      operations, changes in stockholders’ equity and cash flows for each of the two
      years in the period ended March 31, 2008 in conformity with accounting
      principles generally accepted in the United States of America.









/s/
      Tabriztchi & Co., CPA, P.C.


Tabriztchi
      & Co., CPA, P.C.


Garden
      City, New York


June
      10,
      2008






7 Twelfth
      Street Garden City, NY 11530  ̈ Tel:
      516-746-4200  ̈ Fax:
      516-746-7900


Email:Info@Tabrizcpa.com  ̈  www.Tabrizcpa.com


F-2
 *Table
          of Contents*


**TECHPRECISION
      CORPORATION**


**CONSOLIDATED
      BALANCE SHEETS**


MARCH
      31,
      2008 and 2007




2008
            
            2007ASSETSCurrent
                assetsCash
                and cash equivalents
            
            $
            2,852,676
            
            $
            1,443,998Accounts
                receivable, less allowance for doubtful accounts of
                $25,000
            
            
            4,509,336
            
            
            2,701,707Costs
                incurred on uncompleted contracts, in excess of progress
                billings
            
            
            4,298,683
            
            
            1,266,445Inventories-
                raw materials
            
            
            195,506
            
            
            183,498Prepaid
                expenses
            
            
            1,039,117
            
            
            270,321Total
                current assets
            
            
            12,895,318
            
            
            5,865,969Property,
                plant and equipment, net
            
            
            2,810,981
            
            
            2,561,054Deposit
                on fixed assets
            
            
            240,000
            
            
            —Deferred
                loan cost, net
            
            
            121,692
            
            
            138,718Total
                assets
            
            $
            16,067,991
            
            $
            8,565,741LIABILITIES
                AND STOCKHOLDERS’ EQUITYCurrent
                liabilitiesAccounts
                payable
            
            $
            990,533
            
            
            1,298,643Accrued
                expenses
            
            
            1,480,507
            
            
            498,626Deferred
                revenues
            
            
            3,418,898
            
            
            —Loan
                from shareholder
            
            
            —
            
            
            60,000Current
                maturity of long-term debt
            
            
            613,832
            
            
            610,814Total
                current liabilities
            
            
            6,503,770
            
            
            2,468,083LONG-TERM
                DEBTNotes
                payable- noncurrent
            
            
            5,404,981
            
            
            6,020,440STOCKHOLDERS’
                EQUITYPreferred
                stock- par value $.0001 per share, 10,000,000 sharesauthorized,
                of which 9,000,000 are designated as Series A PreferredStock,
                with 7,018,064 shares issued and outstanding at March
                31,2008and
                7,752,462 at March 31, 2007.
            
            
            2,542,643
            
            
            2,835,278Common
                stock -par value $.0001 per share, authorized,90,000,000
                shares, issued and outstanding, 12,572,995shares
                at March 31, 2008 and 10,049,000 at March 31, 2007
            
            
            1,259
            
            
            1,006Paid
                in capital
            
            
            2,624,892
            
            
            1,766,423Accumulated
                deficit
            
            
            (1,009,554
            )
            
            (4,525,489
            )Total
                stockholders’ equity
            
            
            4,159,240
            
            
            77,218Total
                liabilities and stockholders' equity
            
            $
            16,067,991
            
            $
            8,565,741


The
      accompanying notes are an integral part of the financial
      statements.




F-3
 *Table
          of Contents*


**TECHPRECISION
                CORPORATION****CONSOLIDATED
                STATEMENTS OF
                OPERATIONS**




Years
                ended March 31,2008
            
            
            2007Net
                sales
            
            $
            31,805,146
            
            $
            19,086,206Cost
                of sales
            
            
            23,472,922
            
            
            15,543,055Gross
                profit
            
            
            8,332,224
            
            
            3,543,151Operating
                expenses:Salaries
                and related expenses
            
            
            1,228,316
            
            
            1,208,920Professional
                fees
            
            
            291,357
            
            
            498,349Selling,
                general and administrative
            
            
            410,886
            
            
            390,290Total
                operating expenses
            
            
            1,930,559
            
            
            2,097,559Income
                from operations
            
            
            6,401,665
            
            
            1,445,592Other
                income (expenses)Interest
                expense
            
            
            (511,615
            )
            
            (628,412
            )Interest
                income
            
            
            479
            
            
            2,453Finance
                costs
            
            
            (17,026
            )
            
            (289,308
            )Total
                other income (expense)
            
            
            (528,162
            )
            
            (915,267
            )Income
                (loss) before income taxes
            
            
            5,873,503
            
            
            530,325Provision
                for income taxes
            
            
            (2,357,568
            )
            
            (240,100
            )Net
                income (loss)
            
            
            3,515,935
            
            
            290,225Deemed
                dividend to preferred stockholders
            
            
            —
            
            
            (675,813
            )Net
                income (loss) to common stockholders
            
            $
            3,515,935
            
            $
            (385,588
            )Net
                gain (loss) per share of common stock (basic)
            
            $
            0.32
            
            $
            (0.04
            )Net
                gain (loss) per share (fully diluted)
            
            $
            0.12
            
            $
            (0.04
            )Weighted
                average number of shares outstanding (basic)
            
            
            10,896,976
            
            
            10,008,463Weighted
                average number of shares outstanding (fully diluted)
            
            
            28,380,980
            
            
            10,008,463


The
      accompanying notes are an integral part of the financial
      statements.




F-4
 *Table
          of Contents*


**TECHPRECISION
      CORPORATION**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY
      (DEFICIT)**


**YEARS
      ENDED MARCH 31, 2008 AND 2007**




AdditionalPreferred
                Stock
            
            
            Common
                Stock
            
            
            Paid
                in
            
            
            AccumulatedShares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            TotalBalance,
                March 31, 2006
            
            
            7,719,250
            
            $
            2,150,000
            
            
            9,967,000
            
            $
            997
            
            
            1,240,821
            
            $
            (4,139,901
            )
            $
            (748,083
            )Issuance
                of shares of common stock for services
            
            
            
            
            
            
            
            
            82,000
            
            
            9
            
            
            14,752
            
            
            
            
            
            14,761Grant
                of options to directors
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            13,500
            
            
            
            
            
            13,500Contributed
                capital
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            497,350
            
            
            
            
            
            497,350Deemed
                dividend to preferred stockholders
            
            
            
            
            
            675,813
            
            
            
            
            
            
            
            
            
            
            
            (675,813
            )Series
                A preferred stock issued as liquidated damages
            
            
            33,212
            
            
            9,465
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            9,465Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            290,225
            
            
            290,225Balance,
                March 31, 2007
            
            
            7,752,462
            
            $
            2,835,278
            
            
            10,049,000
            
            $
            1,006
            
            $
            1,766,423
            
            $
            (4,525,489
            )
            $
            77,218Distribution
                WM Realty
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (111,500
            )
            
            
            
            
            (111,500
            )Grant
                of options
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            11
            
            
            
            
            
            11Shares
                issued for services
            
            
            
            
            
            
            
            
            53,995
            
            
            6
            
            
            19,133
            
            
            
            
            
            19,139Issuance
                of common stock on exercise of warrants
            
            
            
            
            
            (45,300
            )
            
            1,510,000
            
            
            151
            
            
            703,586
            
            
            
            
            
            658,437Conversion
                of preferred stock
            
            
            (734,398
            )
            
            (247,335
            )
            
            960,000
            
            
            96
            
            
            247,239
            
            
            
            
            
            —Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            3,515,935
            
            
            3,515,935Balance,
                March 31, 2008
            
            
            7,018,064
            
            $
            2,542,643
            
            
            12,572,995
            
            $
            1,259
            
            $
            2,624,892
            
            $
            (1,009,554
            )
            $
            4,159,240


The
      accompanying notes are an integral part of the financial
      statements.




F-5
 *Table
          of Contents*




**TECHPRECISION
                CORPORPORATION****CONSOLIDATED
                STATEMENT OF CASH
                FLOWS**




Year
                Ended March 31,2008
            
            2007CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                income (loss)
            
            $
            3,515,935
            
            $
            290,225Adjustments
                to reconcile net income to net cash provided by operating
                activities:Depreciation
                and amortization
            
            
            483,358
            
            
            722,352Shares
                issued for services
            
            
            19,139
            
            
            14,761Issuance
                of options
            
            
            11
            
            
            13,500Preferred
                stock issued as liquidated damages
            
            
            —
            
            
            9,466Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (1,807,630
            )
            
            (194,423
            )Inventory
            
            
            (12,007
            )
            
            30,649Costs
                incurred on uncompleted contracts
            
            
            (5,178,720
            )
            
            (2,565,492
            )Prepaid
                expenses
            
            
            (768,797
            )
            
            116,154Accounts
                payable and accrued expenses
            
            
            673,770
            
            
            544,369Customer
                advances
            
            
            5,565,381
            
            
            2,605,636Net
                cash provided (used) in operating activities
            
            
            2,490,440
            
            
            1,587,197CASH
                FLOW FROM INVESTING ACTIVITIESPurchases
                of property, plant and equipment
            
            
            (716,260
            )
            
            (430,534
            )Deposits
                on equipment
            
            
            (240,000
            )
            
            —Net
                cash used in investing activities
            
            
            (956,260
            )
            
            (430,534
            )CASH
                FLOWS FROM FINANCING ACTIVITIESMortgage
                loan
            
            
            —
            
            
            3,200,000Capital
                addition (distribution) of WMR equity
            
            
            (111,500
            )
            
            82,500Addition
                to capital - proceeds of warranty settlement
            
            
            —
            
            
            414,850Issuance
                of common stock on exercise of warrants
            
            
            658,437
            
            
            —Payment
                of notes
            
            
            (612,439
            )
            
            (3,888,148
            )Increase
                in restricted cash
            
            
            —
            
            
            950,000Decrease
                in amounts due to former stockholders
            
            
            —
            
            
            (843,600
            )Borrowing
                costs
            
            
            —
            
            
            (181,068
            )Increase
                (decrease) in loan from stockholder
            
            
            (60,000
            )
            
            60,000Net
                cash provided by (used in) financing activities
            
            
            (125,502
            )
            
            (205,466
            )Net
                increase (decrease) in cash and cash equivalents
            
            
            1,408,678
            
            
            951,197Cash
                and cash equivalents, beginning of period
            
            
            1,443,998
            
            
            492,801Cash
                and cash equivalents, end of period
            
            $
            2,852,676
            
            $
            1,443,998


The
      accompanying notes are an integral part of the financial
      statements.




F-6
 *Table
            of Contents*




**TECHPRECISION
      CORPORATION**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Continued)**




Years
                ended March 31,2008
            
            2007SUPPLEMENTAL
                DISCLOSURES OF CASH FLOWS INFORMATIONCash
                paid during the year for:Interest
                expense
            
            $
            511,614
            
            $
            637,793Income
                taxes
            
            $
            1,746,184
            
            $
            4,229




SUPPLEMENTAL
      INFORMATION - NONCASH TRANSACTIONS:




**Year
      Ended March 31, 2007**




The
      Company recorded deemed dividends of $388,233 and $287,580 to the preferred
      stockholders in the year ended March 31, 2007 because of a reduction in the
      conversion price of the series A preferred stock from $.285 to $.24225 resulting
      from the Company’s failure to attain a specified level of fully diluted EBITDA
      per share for the years ended March 31, 2006 and a further reduction from
      $.24225 to $.218025 resulting from our failure to attain a specified level
      of
      fully-diluted EBITDA for the year ended March 31, 2007. The deemed dividends
      increased the preferred stockholders’ equity and reduced the income available to
      common stockholders by total amount of $675,813.




**Year
      Ended March 31, 2008**




During
      the year ended March 31, 2008, the Company issued 960,000 shares of common
      stock
      upon conversion of 734,398 shares of series A preferred stock, based on a
      conversion ratio of 1.3072 shares of common stock for each share of series
      A
      preferred stock. The conversion price of each share of common stock was computed
      at $0.2180.






The
      accompanying notes are an integral part of the financial
      statements.




F-7
 *Table
          of Contents*


**TECHPRECISION
      CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




NOTE
      1. DESCRIPTION
      OF BUSINESS




Techprecision
      Corporation (“Techprecision”) is a Delaware corporation organized in February
      2005 under the name Lounsberry Holdings II, Inc. The name was changed to
      Techprecision Corporation on March 6, 2006. Techprecision is the parent company
      of Ranor, Inc. (“Ranor”), a Delaware corporation. Techprecision and Ranor are
      collectively referred to as the “Company.”




The
      Company manufactures metal fabricated and machined precision components and
      equipment. These products are used in a variety of markets including the
      alternative energy, medical, nuclear, defense, industrial, and aerospace
      industries.




NOTE
      2.
      SIGNIFICANT ACCOUNTING POLICIES




**Basis
      of Presentation and Consolidation**




On
      February 24, 2006, Techprecision acquired all stock of Ranor in a transaction
      which is accounted for as a recapitalization (reverse acquisition), with Ranor
      being treated as the acquiring company for accounting purposes.




The
      accompanying consolidated financial statements include the accounts of the
      Company and Ranor as well as a special purpose entity. Intercompany transactions
      and balances have been eliminated in consolidation.




**Use
      of Estimates in the Preparation of Financial Statements**




In
      preparing financial statements in conformity with generally accepted accounting
      principles, 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 financial statements and revenues
      and
      expenses during the reported period. Actual results could differ from those
      estimates.




**Fair
      Values of Financial Instruments**




Cash
      and
      cash equivalents.




Holdings
      of highly liquid investments with maturities of three months or less, when
      purchased, are considered to be cash equivalents. The carrying amount reported
      in the balance sheet for cash and cash equivalents approximates its fair values.
      The amount of federally insured cash deposits was $100,000 as of March 31,
      2008
      and March 31, 2007.




The
      carrying amount of trade accounts receivable, accounts payable, prepaid and
      accrued expenses, and notes payable, as presented in the balance sheet,
      approximates fair value.




**Accounts
      receivable**




Trade
      accounts receivable are stated at the amount the Company expects to collect.
      The
      Company maintains allowances for doubtful accounts for estimated losses
      resulting from the inability of its customers to make required payments.
      Management considers the following factors when determining the collectability
      of specific customer accounts: customer credit-worthiness, past transaction
      history with the customer, current economic industry trends, and changes in
      customer payment terms. If the financial condition of the Company’s customers
      were to deteriorate, adversely affecting their ability to make payments,
      additional allowances would be required. Based on management’s assessment, the
      Company provides for estimated uncollectible amounts through a charge to
      earnings and a credit to a valuation allowance. Balances that remain outstanding
      after the Company has used reasonable collection efforts are written off through
      a charge to the valuation allowance and a credit to accounts receivable. Current
      earnings are also charged with an allowance for sales returns based on
      historical experience. There was no bad debt expense for the years ended March
      31, 2008 and 2007.




F-8
 *Table
          of Contents*




**Inventories**




Cost
      of
      the inventories of raw materials is determined principally by the first-in,
      first-out method.




**Notes
      Payable**




The
      Company accounts for all note liabilities that are due and payable in one year
      as short-term liabilities.




**Long-lived
      Assets**




Property,
      plant and equipment are recorded at cost less accumulated depreciation and
      amortization. Depreciation and amortization are accounted for on the
      straight-line method based on estimated useful lives. The amortization of
      leasehold improvements is based on the shorter of the lease term or the life
      of
      the improvement. Betterments and large renewals, which extend the life of the
      asset, are capitalized whereas maintenance and repairs and small renewals are
      expensed as incurred. The estimated useful lives are: machinery and equipment,
      7-15 years; buildings, up to 30 years; and leasehold improvements, 10-20
      years.




**Leases**




Operating
      leases are charged to operations as paid. Capital leases are capitalized and
      depreciated over the term of the lease. A lease is considered a capital lease
      if
      there is a favorable buyout clause that would be an inducement for us to own
      the
      asset.




**Convertible
      Preferred Stock and Warrants**




In
      accordance with EITF 00-19, the Company initially measured the fair value of
      the
      series A preferred stock by the amount of cash that was received for their
      issuance. The Company subsequently determined that the convertible preferred
      shares and the accompanying warrants were equity instruments under SFAS 150
      and
      133. Although the Company had unconditional obligation to issue additional
      shares of common stock upon conversion of the series A preferred stock if EBITDA
      per share were below the targeted amount, the certificate of designation
      relating to the series A preferred stock did not provide that we must issue
      shares that are registered pursuant to the Securities Act of 1933, with the
      result, pursuant to the certificate of designation, the additional shares need
      not be registered shares. Our preferred stock also met all other conditions
      for
      the classification as equity instruments. The Company had sufficient number
      of
      authorized shares, there is no required cash payment or net cash settlement
      requirement and the holders of the series A preferred stock had no right higher
      than the common stockholders other than the liquidation preference in the event
      of liquidation of the Company.




The
      Company’s warrants were excluded from derivative accounting because they were
      indexed to the Company’s own common stock and were classified in stockholders’
equity section according to SFAS 133 paragraph 11(a), under preferred
      stock.




As
      of
      April 1, 2006, the Company was required to reduce the conversion price of the
      series A preferred stock, which resulted in an increase in the number of shares
      of common stock issuable upon conversion of the series A preferred stock by
      15%
      because the Company’s EBITDA per share was below the targeted level of $0.06591
      per share for the year ended March 31, 2006. On March 31, 2007, the Company
      was
      required to further reduce the conversion price by an additional 10% because
      the
      fully-diluted EBITDA per share was below the targeted level of $0.08568 per
      share in the year ended March 31, 2007. According to EITF number 00-27,
“Application of issue No. 98-5 to Certain Convertible Instruments,” (EITF 00-27)
      we estimated the beneficial effect of the reductions in conversion price to
      be
      $675,813. The 2,371,336 additional shares of common stock into which the holders
      of the series A preferred stock could obtain, upon conversion of their shares,
      were valued at $0.285 per share, which represents the initial conversion price
      of the series A preferred stock and the Company’s estimate of the current fair
      value per share of the common stock.




F-9
 *Table
          of Contents*


In
      accordance with EITF 98-5, this amount ($675,813) is analogous to a deemed
      dividend and recognized as a return to holders of the series A preferred stock
      and is included in the calculation of net loss allocable to common stockholders
      and basic and diluted net loss per share of common stock.




The
      reductions in the exercise price of the warrants, because of the Company’s fully
      diluted EBITDA per share was lower than the targeted amounts for the years
      ended
      March 31, 2006 and 2007, did not result in any beneficial effect to the warrant
      holders because there was no public market for common stock and the exercise
      price of the warrants was greater than the Company’s determination of the then
      current market price of the common stock.




The
      Company issued 33,212 shares of series A preferred stock, valued at $9,465,
      or
      $0.285 per share, as liquidated damages for its failure to have shares
      registered with the Securities and Exchange Commission as required by a
      registration rights agreement relating to the February 2006 private placement.
      The shares of series A preferred shares were valued at the last cash price
      paid
      for those shares, which was $.285 per share in February 2006, determined without
      allocating any value to the warrants that were issued with the series A
      preferred stock. At the time of issuance, there was no market for the Company’s
      common stock or series A preferred stock. According to the final FASB Staff
      Position (FSP) No. EITF 00-19-2, “Accounting for Registration Payment
      Arrangements,” issued on December 21, 2006, the Company recognized the amount of
      liquidated damages of $9,465 as an expense and credited to preferred stock.




The
      Company recorded the series A preferred stock to permanent equity in accordance
      with the terms of the Abstracts - Appendix D - Topic D-98: Classification and
      Measurement of redeemable Securities.”




**Shipping
      Costs**




Shipping
      and handling costs are included in cost of sales in the accompanying
      Consolidated Statements of Income for all periods presented.




**Selling,
      General, and Administrative**




Selling
      expenses include items such business travel and advertising costs. Advertising
      costs are expensed as incurred. General and administrative expenses include
      items for Company’s administrative functions and include costs for items such as
      office supplies, insurance, telephone and payroll services.




**Stock
      Based Compensation**




Stock-based
      compensation represents the cost related to stock-based awards granted to
      employees. The Company measures stock-based compensation cost at grant date,
      based on the estimated fair value of the award and recognizes the cost as
      expense on a straight-line basis (net of estimated forfeitures) over the
      employee requisite service period. The Company estimates the fair value of
      stock
      options using a Black-Scholes valuation model. In the year ended March 31,
      2007,
      the 150,000 options granted to the company directors were evaluated using Black
      Scholes model assuming average volatility of 25%, exercise and stock price
      of
      $0.285, risk free rate of 5% and the term of 5 years.




**Earnings
      per Share of Common Stock**




Basic
      net
      income per common share is computed by dividing net income or loss by the
      weighted average number of shares outstanding during the year. Diluted net
      income per common share is calculated using net income divided by diluted
      weighted-average shares. Diluted weighted-average shares include
      weighted-average shares outstanding plus the dilutive effect of convertible
      preferred stock, preferred shareholders and other warrants and share-based
      compensation were
      calculated using the treasury stock method. The weighted average number of
      dilutive shares was 17,484,004, in the year ended March 31, 2008. In the year
      ended March 31, 2007, because of the $385,588 loss applicable to common
      shareholders, the conversion of preferred shares and exercise of warrants and
      options were anti-dilutive and were not included in the computation of loss
      per
      share.






F-10
 *Table
          of Contents*




**Revenue
      Recognition and Costs Incurred**




Revenue
      and costs are recognized on the units of delivery method. This method recognizes
      as revenue the contract price of units of the product delivered during each
      period and the costs allocable to the delivered units as the cost of earned
      revenue. When the sales agreements provide for separate billing of engineering
      services, the revenues for those services are recognized when the services
      are
      completed. Costs allocable to undelivered units are reported in the balance
      sheet as costs incurred on uncompleted contracts. Amounts in excess of agreed
      upon contract price for customer directed changes, constructive changes,
      customer delays or other causes of additional contract costs are recognized
      in
      contract value if it is probable that a claim for such amounts will result
      in
      additional revenue and the amounts can be reasonably estimated. Revisions in
      cost and profit estimates are reflected in the period in which the facts
      requiring the revision become known and are estimable. The unit of delivery
      method requires the existence of a contract to provide the persuasive evidence
      of an arrangement and determinable seller’s price, delivery of the product
      and reasonable collection prospects. The Company has written agreements with
      the
      customers that specify contract prices and delivery terms. The Company
      recognizes revenues only when the collection prospects are reasonable.




Adjustments
      to cost estimates are made periodically, and losses expected to be incurred
      on
      contracts in progress are charged to operations in the period such losses are
      determined and are reflected as reductions of the carrying value of the costs
      incurred on uncompleted contracts. Costs incurred on uncompleted contracts
      consist of labor, overhead, and materials. Work in process is stated at the
      lower of cost or market and reflect accrued losses, if required, on uncompleted
      contracts.




**Advertising
      Expenses**




Advertising
      costs are charged to operations when incurred. Advertising expenses were $19,000
      and $10,832 in 2008 and 2007, respectively.




**Income
      Taxes**




The
      Company uses the asset and liability method of financial accounting and
      reporting for income taxes required by statement of Financial Accounting
      Standards No. 109 (“FAS 109”), “Accounting for Income Taxes.” Under FAS 109,
      deferred income taxes reflect the tax impact of temporary differences between
      the amount of assets and liabilities recognized for financial reporting purposes
      and the amounts recognized for tax purposes.




Temporary
      differences giving rise to deferred income taxes consist primarily of the
      reporting of losses on uncompleted contracts, the excess of depreciation for
      tax
      purposes over the amount for financial reporting purposes, and accrued expenses
      accounted for differently for financial reporting and tax purposes, and net
      operating loss carryforwards.




**Variable
      Interest Entity**




The
      Company has consolidated WM Realty, a variable interest entity that entered
      into
      a sale and leaseback contract with the Company, in 2006, to conform to FASB
      Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46).
      The Company has also adopted the revision to FIN 46, FIN 46R, which clarified
      certain provisions of the original interpretation and exempted certain entities
      from its requirements.




**Reclassification**




Certain
      accounts for the year ended March 2007 have been reclassified to conform to
      the
      current year presentation.




F-11
 *Table
          of Contents*




**Recent
      Accounting Pronouncements**




In
      June
      2006, FASB Interpretation 48, “Accounting for Uncertainty in Income Taxes”, was
      issued, which clarifies the accounting for uncertainty in income taxes
      recognized in an enterprise’s financial statements in accordance with FASB
      Statement No. 109, “Accounting for Income Taxes.” This Interpretation prescribes
      a recognition threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. This Interpretation also provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure, and transition. This Interpretation is effective for fiscal years
      beginning after December 15, 2006, and earlier application of the provisions
      of
      this Interpretation is encouraged if the enterprise has not yet issued financial
      statements, including interim financial statements, in the period this
      Interpretation is adopted. The Company has determined that the FASB
      Interpretation 48 does not have a material impact on its financial
      statements.




In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      157 (“SFAS 157”), “Fair Value Measurements,” which defines fair value,
      establishes guidelines for measuring fair value and expands disclosures
      regarding fair value measurements. SFAS 157 does not require any new fair value
      measurements but rather eliminates inconsistencies in guidance found in various
      prior accounting pronouncements. SFAS 157 is effective for fiscal years
      beginning after November 15, 2007. Earlier adoption is permitted, provided
      the
      company has not yet issued financial statements, including for interim periods,
      for that fiscal year. The Company does not expect the adoption of SFAS 157
      will
      have a material impact on its consolidated financial position, results of
      operations or cash flows.




In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 108, Considering the Effects of Prior Year Misstatements when
      Quantifying Misstatements in Current Year Financial Statements (“SAB 108”). SAB
      108 provides interpretive guidance on how the effects of prior-year uncorrected
      misstatements should be considered when quantifying misstatements in the current
      year financial statements. SAB 108 requires registrants to quantify
      misstatements using both an income statement (“rollover”) and balance sheet
      (“iron curtain”) approach and evaluate whether either approach results in a
      misstatement that, when all relevant quantitative and qualitative factors are
      considered, is material. If prior year errors that had been previously
      considered immaterial now are considered material based on either approach,
      no
      restatement is required so long as management properly applied its previous
      approach and all relevant facts and circumstances were considered. If prior
      years are not restated, the cumulative effect adjustment is recorded in opening
      accumulated earnings as of the beginning of the fiscal year of adoption. SAB
      108
      is effective for fiscal years ending after November 15, 2006.  The Company
      has determined that there will be no impact to the financial statements upon
      the
      adoption of this bulletin.




On
      December 21, 2006, the FASB issued final FASB Staff Position (FSP) No. EITF
      00-19-2, Accounting for Registration Payment Arrangements, which addresses
      an
      issuer’s accounting for registration payment arrangements. This FSP requires
      that an entity should recognize and measure a registration payment arrangement
      as a separate unit of account from the financial instrument (s) subject to
      that
      arrangement. This FSP states that the contingent obligation to make future
      payments or otherwise transfer consideration under a registration payment
      arrangement should be separately recognized and measured in accordance with
      FASB
      Statement No. 5, Accounting for Contingencies. This FSP further specifies that
      a
      financial instrument subject to a registration payment arrangement should be
      recognized and measured in accordance with other applicable GAAP without regard
      to the contingent obligation to transfer consideration pursuant to the
      registration payment arrangement.




This
      FSP
      is effective immediately for registration payment arrangements and the financial
      instruments subject to those arrangements that are entered into or modified
      subsequent to December 21, 2006. Otherwise, the guidance in the FSP is effective
      for financial statements issued for fiscal years beginning after December 15,
      2006, and interim periods within those fiscal years. For registration payment
      arrangements and financial instruments subject to those arrangements that were
      entered into prior to December 21, 2006 and that continue to be outstanding
      at
      the beginning of the period of adoption, the FSP requires retrospective
      application. The Company adopted the FSP and accordingly recorded liquidated
      damages in the amount of $9,465.




In
      February 2007, the FASB issued SFAS No. 159, “ *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* ”
(“SFAS
      159”). SFAS 159 provides reporting entities an option to report selected
      financial assets, including investment securities designated as available for
      sale, and liabilities, including most insurance contracts, at fair value. SFAS
      159 establishes presentation and disclosure requirements designed to facilitate
      comparisons between companies that choose different measurement attributes
      for
      similar types of assets and liabilities. The




F-12
 *Table
          of Contents*


standard
      also requires additional information to aid financial statement users'
      understanding of a reporting entity's choice to use fair value on its earnings
      and also requires entities to display on the face of the balance sheet the
      fair
      value of those assets and liabilities for which the reporting entity has chosen
      to measure at fair value. SFAS 159 is effective as of the beginning of a
      reporting entity's first fiscal year beginning after November 15, 2007. Early
      adoption is permitted as of the beginning of the previous fiscal year provided
      the entity makes that choice in the first 120 days of that fiscal year and
      also
      elects to apply the provisions of SFAS 157. Management has determined that
      the
      adoption of SFAS 159 will not have a material effect on our financial condition,
      results of operations and cash flows.




December
      2007, the FASB issued Statement of Financial Accounting Standards No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements* (an
      amendment of Accounting Research Bulletin (ARB 51)) (SFAS No. 160). SFAS
      No. 160 amends ARB 51 to establish accounting and reporting standards for
      the noncontrolling interest in a subsidiary and for the deconsolidation of
      a
      subsidiary. SFAS No. 160 becomes effective beginning January 1, 2009
      and is required to be adopted prospectively, except for the reclassification
      of
      noncontrolling interests to equity and the recasting of net income (loss)
      attributable to both the controlling and noncontrolling interests, which are
      required to be adopted retrospectively. We do not expect the adoption of SFAS
      No. 160 to have a significant impact on our consolidated financial
      statements.




NOTE
      3.
      PROPERTY, PLANT AND EQUIPMENT




As
      of
      March 31, 2008 and 2007 property, plant and equipment consisted of the
      following:




2008
            
            2007Land
            
            $
            110,113
            
            $
            110,113Building
                and improvements
            
            
            1,412,730
            
            
            1,290,072Machinery
                equipment, furniture and fixtures
            
            
            3,633,833
            
            
            3,040,232Total
                property, plant and equipment
            
            
            5,156,676
            
            
            4,440,417Less:
                accumulated depreciation
            
            
            (2,345,695
            )
            
            (1,879,363
            )Total
                property, plant and equipment, net
            
            $
            2,810,981
            
            $
            2,561,054




Depreciation
      expense for the years ended March 31, 2008 and 2007 were $466,332 and $426,474,
      respectively. Land and buildings (which are owned by WM Realty Management,
      LLC -
      a consolidated entity under Fin 46 (R)) are collateral for the $3,300,000
      Mortgage Loan. Other fixed assets of the Company together with its other
      personal properties, are collateral for the Sovereign Bank $4,000,000 secured
      loan and line of credit.




NOTE
      4.
      COSTS INCURRED ON UNCOMPLETED CONTRACTS




The
      Company recognizes revenues based upon the units-of-delivery method (see Note
      2). The advance billing and deposits includes down payments for acquisition
      of materials and progress payments on contracts. The agreements with the buyers
      of the Company’s products allow the Company to offset the progress payments
      against the costs incurred.  The following table sets forth information as
      to costs incurred on uncompleted contracts as of March 31, 2008 and
      2007:




2008
            
            2007Cost
                incurred on uncompleted contracts, beginning balance
            
            $
            5,455,142
            
            $
            2,889,649Total
                cost incurred on contracts during the year
            
            
            28,651,712
            
            
            18,108,550Less
                cost of sales, during the year
            
            
            (23,472,992
            )
            
            (15,543,057
            )Cost
                incurred on uncompleted contracts, ending balance
            
            $
            10,633,862
            
            $
            5,455,142Billings
                on uncompleted contracts, beginning balance
            
            $
            4,188,697
            
            $
            1,593,061Plus:
                Total billings incurred on contracts, during the year
            
            
            19,956,718
            
            
            9,236,613Less:
                Contracts recognized as revenue, during the year
            
            
            (17,810,236
            )
            
            (6,630,977
            )Billings
                on uncompleted contracts, ending balance
            
            $
            6,335,179
            
            $
            4,198,697Cost
                incurred on uncompleted contracts, ending balance
            
            $
            10,633,862
            
            $
            5,455,142Billings
                on uncompleted contracts, ending balance
            
            
            (6,335,179
            )
            
            (4,198,697
            )Costs
                incurred on uncompleted contracts, in excess of progress
                billings
            
            $
            4,298,683
            
            $
            1,256,445






F-13
 *Table
          of Contents*




As
      of
      March 31, 2008, the company had deferred revenues totaling $3,418,898. Deferred
      revenues represent the customer prepayments on their contracts.




On
      March
      31, 2008 and 2007, $151,195 and $116,755 of allowance for losses on uncompleted
      contracts were recognized, respectively




NOTE
      5.
      PREPAID EXPENSES




As
        of
        March 31, 2008 and 2007, the prepaid expenses included the following:


2008
            
            2007Insurance
            
            $
            145,338
            
            $
            137,484Real
                estate taxes
            
            
            4,438
            
            
            4,387Prepayments
                on purchases
            
            
            882,739
            
            
            121,720Equipment
                maintenance
            
            
            6,602
            
            
            6,730Total
            
            $
            1,039,117
            
            $
            270,321




NOTE
      6.
      DEFERRED CHARGES




Deferred
      charges represent the capitalization of costs incurred in connection with
      obtaining the bank loan and building mortgage. These costs are being amortized
      over the term of the related debt obligation. Amortization charged to operations
      in 2008 and 2007 were $17,026 and $295,978, respectively. As of March 31, 2008
      and 2007, deferred charges were as follows:




2008
            
            2007Deferred
                loan costs
            
            $
            150,259
            
            $
            150,259Accumulated
                amortization
            
            
            (28,567
            )
            
            (11,541
            )Deferred
                loan costs, net
            
            $
            121,692
            
            $
            138,718




F-14
 *Table
          of Contents*




NOTE
      7.
      LONG-TERM DEBT




The
      following debt obligations, outstanding on March 31, 2008 and 2007:




2008
            
            20071.
                Long-term debt issued on February 24, 2006:Sovereign
                Bank-Secured Term note payable- 72 month 9% variable term note with
                quarterly principal payments of $142,857 plus interest. Final payment
                due
                on March 1, 2013
            
            $
            2,817,142
            
            $
            3,428,5712.
                Long-term mortgage loan issued on October 4, 2006:Amalgamated
                Bank mortgage loan to WM Realty- 10 years, annual interest rate 6.75%,
                monthly interest and principal payment $20,955. The amortization
                is based
                on a 30- year term. WM Realty Management has the right to prepay
                the
                mortgage note upon payment of a prepayment premium of 5% of the amount
                prepaid if the prepayment is made during the first two years, and
                declining to 1% of the amount prepaid if the prepayment is made during
                the
                ninth or tenth year.
            
            
            3,154,171
            
            
            3,189,0873.
                Automobile Loan:Ford
                Motor Credit Company-Note payable secured by a vehicle - payable
                in
                monthly installments of $552 including interest of 4.9%, commencing
                July
                20, 2003 through June 20, 2009
            
            
            7,500
            
            
            13,596Total
                long-term debt
            
            
            6,018,813
            
            
            6,631,254Principal
                payments due within one year
            
            
            613,832
            
            
            610,814Principal
                payments due after one year
            
            $
            5,404,981
            
            $
            6,020,440




On
      February 24, 2006, Ranor entered into a loan and security agreement with
      Sovereign Bank. Pursuant to the agreement, the bank has granted Ranor a term
      loan of $4,000,000 (“Term Note”) and extended Ranor a line of credit of
      $1,000,000, initial interest at 9%. In February 2007, Ranor entered into an
      amendment to the agreement with the bank which (i) reduced the interest rate
      on
      its increased revolving credit line of $2,000,000 (“Revolving Note’) from prime
      plus 11⁄2% to prime plus 1% and (ii) provided for Ranor to borrow up to $500,000
      at prime plus 1% in order to finance capital expenditures. Under this capital
      expenditures facility, Ranor was able to borrow up to $500,000 until the
      February 1, 2008. On November 30, 2007, Ranor and the bank entered into another
      amendment to the loan agreement pursuant to which the capital expenditure line
      was increased to $3,000,000, which is available to Ranor until November 30,
      2008, and any borrowings under the capital expenditures line are amortized
      over
      five years, commencing December 1, 2008. The interest on the capital expenditure
      loans is equal to the prime plus one half of one percent per annum through
      November 30, 2008. After November 2008, the interest is charged on the
      outstanding balance of the capital expenditures loan at the annual rate that
      the
      bank offers to pay for its wholesale liabilities, adjusted for reserve
      requirement, plus 2.25% (“Cost of Fund Rate”.) As of March 31, 2008 and 2007
      there were no borrowings outstanding under either the revolving line or the
      capital expenditure line. Any outstanding principal or accrued interest has
      to
      be paid off on or before November 2013, the maturity date.




F-15
 *Table
          of Contents*


The
      Term
      Note is subject to various covenants that include the following: the loan
      collateral comprises all personal property of Ranor, including cash, accounts
      receivable, inventories, equipment, financial and intangible assets owned when
      the loan is contracted or acquired thereafter; the amount of loan outstanding
      at
      all times is limited to a borrowing base amount of the Ranor’s qualified
      accounts receivable and inventory; there are prepayment penalties of 3%, 2%
      and
      1% of the outstanding principal, in the first, second and third years following
      the issuance date, respectively. There is no prepayment penalty thereafter.
      Ranor is prohibited from issuing any additional equity interest (except to
      existing holders), or redeem, retire, purchase or otherwise acquire for value
      any equity interests; Ranor pays an unused credit line fee of 0.25% of the
      average unused credit line amount in previous month; the earnings available
      to
      cover fixed charges are required not to be less than 120% of fixed charges
      for
      the rolling four quarters, tested at the end of each fiscal quarter; and
      interest coverage ratio is required to be not less than 2:1 at the end of each
      fiscal quarter. Ranor’s obligations under the notes to the bank are guaranteed
      by Techprecision.




In
      connection with the Amalgamated Bank mortgage financing of the real estate
      owned
      by WM Realty Management LLC, Mr. Andrew Levy executed a limited guarantee.
      Pursuant to the limited guaranty, Mr. Levy guaranteed the lender the payment
      of
      any loss resulting from WM Realty Management’s fraud or misrepresentation in
      connection with the loan documents, misapplication of rent and insurance
      proceeds, failure to pay taxes and other defaults resulting from his or WM
      Realty Management’s misconduct.




As
      of
      March 31, 2008, the maturities of long-term debt were as follows:




**Year
      ending March 31,**


2009
            
            $
            612,7522010
            
            
            612,4352011
            
            
            612,6412012
            
            
            615,628Due
                after 2011
            
            
            3,565,357Total
            
            $
            6,018,813




NOTE
      8.
      INCOME TAXES




The
      provision for income taxes differs from the amount computed by applying the
      statutory federal income tax rate to the net income or loss from operations.
      For
      the years ended March 31, 2008 and 2007, the sources and tax effects of the
      differences are as follows:




2008
            
            2007Income
                tax provision at statutory rate
            
            $
            (2,382,431
            )
            $
            (400,600
            )Tax
                benefit before net operating loss carry forward
            
            
            24,863
            
            
            160,500Net
                tax provision
            
            $
            (2,357,568
            )
            $
            (
                240,100
            )






F-16
 *Table
          of Contents*




As
      of
      March 31, 2008 and 2007, the tax effect of temporary differences and net
      operating loss carry forward that give rise to the Company’s deferred tax assets
      and liabilities are as follows:




Deferred
                Tax Assets:
            
            2008
            
            2007**Current:**Compensation
                accrual
            
            $
            96,000
            
            $
            112,000Bad
                debt allowance
            
            
            10,000
            
            
            10,000Loss
                on uncompleted contracts
            
            
            62,000
            
            
            46,000**Non-Current:**Net
                operating loss carry-forward
            
            
            552,000
            
            
            585,000Total
                deferred tax assets
            
            
            720,000
            
            
            753,000**Deferred
                Tax Liabilities:**Non-Current:Depreciation
            
            
            48,000
            
            
            206,000Net
                deferred tax asset
            
            
            672,000
            
            
            547,000Valuation
                allowance
            
            
            (672,000
            )
            
            (547,000
            )Net
                Deferred Tax Asset Balance
            
            $
            —
            
            $
            —




At
      March
      31, 2008 and 2007, the Company provided a full valuation allowance for its
      net
      deferred tax assets. The Company believes sufficient uncertainty exists
      regarding the realization of the deferred tax assets. The net changes in the
      valuation allowances during the years ended March 31, 2008 and 2007 were
      $(125,000) and $(123,000) respectively. The Company applied $24,863 of the
      tax
      benefit of loss carryforward to offset the provision for income taxes, in the
      year ended March 31, 2008.




As
      of
      March 31, 2008, the Company’s federal net operating loss carry-forward was
      approximately $1,415,200. If not utilized, the federal net operating loss
      carryforward of Ranor and Techprecision will expire in 2025 and 2027,
      respectively. Furthermore, because of over fifty percent change in ownership
      as
      a consequence of the reverse acquisition in February 2006, as a result of the
      application of Section 382 of the Internal Revenue Code, the amount of net
      operating loss carry forward used in any one year in the future is substantially
      limited.




NOTE
      9.
      RELATED PARTY TRANSACTIONS




**Management
      Fees**




During
      the year ended March 31, 2007, the Company paid $185,000 pursuant to a
      management contract with Techprecision LLC, a limited liability company that
      was
      owned by three individuals, including two principal stockholders, one of whom
      was also the Company’s chief executive officer. On January 29, 2007, the
      management agreement with Techprecision LLC was terminated retroactive to
      December 31, 2006. In connection with the termination, the Company made payments
      totaling $55,000, during the year ended March 31, 2008.




**Loans
      from Related Parties**




The
      principal equity owner of WM Realty made loans to WM Realty in the year ended
      March 31, 2007. The loan balance was $60,000 on March 31, 2007 and was paid
      off
      during the year ended March 31, 2008. Interest of $4,735 was paid during the
      years ended March 31, 2008 **** on
      the
      loan. ****




**Sale
      and Lease Agreement and Intra-company Receivable**




On
      February 24, 2006, WM Realty Management, LLC borrowed $3,300,000 to finance
      the
      purchase of Ranor’s real property. WM Realty Management purchased the real
      property for $3,000,000 and leased the property on which Ranor’s facilities are
      located pursuant to a net lease agreement. The property was appraised on October
      31, 2005 at $4,750,000. The Company advanced $226,808 to WM Realty Management
      to
      pay closing costs, which advance was repaid when WM Realty Management refinanced
      the mortgage in October 2006. WM Realty Management was formed solely for this
      purpose; its partners are stockholders of the Company. The Company considers
      WM
      Realty Management a special purpose entity as defined by FIN 46, and therefore
      has consolidated its operations into the Company.




F-17
 *Table
          of Contents*




On
      October 4, 2006, WM Realty Management placed a new mortgage of $3.2 million
      on
      the property and the then existing mortgage of $3.1 million was paid off. The
      new mortgage has a term of ten years, bears interest at 6.75% per annum, and
      provides for monthly payments of principal and interest of $20,595 (See Note
      8).
      Andrew Levy, the principal equity owner of WM Realty Management, executed a
      limited guarantee. Pursuant to the limited guaranty, Mr. Levy guaranteed the
      lender the payment of any loss resulting from WM Realty Management’s fraud or
      misrepresentation in connection with the loan documents, misapplication of
      rent
      and insurance proceeds, failure to pay taxes and other defaults resulting from
      his or WM Realty Management’s misconduct.




**Distribution
      to WM Realty Management Members**




The
      accumulated deficit and the stockholders deficit of the WM Realty Management
      were $194,058 and $223,058, respectively, on March 31, 2008. During the year
      ended March 31, 2008, WM Realty had a net income of $117,691and capital
      distributions of $129,000,




NOTE
      10.
      EQUIPMENT LEASES




Ranor
      leases office equipment under operating lease agreements expiring through April
      2012. Total rent expense charged to operations was $16,537 and $16,700 in the
      years ended March 31, 2008 and 2007, respectively. Future minimum lease payments
      under non-cancellable portions of the leases as of March 31, 2006, are as
      follows:




March
                31,
            
            Amount2009
            
            $
            15,5642010
            
            
            15,5642011
            
            
            15,5642012
            
            
            15,564




NOTE
      11.
      REAL ESTATE LEASES




Ranor,
      Inc. has leased its manufacturing, warehouse and office facilities in
      Westminster (Westminster Lease), Massachusetts from WM Realty Management, LLC,
      a
      special purpose entity, for a term of 15 years, commencing February 24, 2006.
      For the years ended March 31, 2008 and 2007, the Company’s annual rent expense
      was $444,500 and $438,500, respectively. Since the Company consolidated the
      operations of WM Realty Management pursuant to FIN 46, the rental expense is
      eliminated in consolidation, the building is carried at cost and depreciation
      is
      expensed. The annual rent is subject to an annual increase based on the increase
      in the consumer price index.




The
      Company has an option to purchase the real property at fair value and an option
      to extend the term of the lease for two additional terms of five years, upon
      the
      same terms. The minimum rent payable for each option term will be the greater
      of
      (i) the minimum rent payable under the lease immediately prior to either the
      expiration date, or the expiration of the preceding option term, or (ii) the
      fair market rent for the leased premises.




The
      Company also leases approximately 12,720 square feet of
      manufacturing **** space
      in
      Fitchburg, Massachusetts from an unaffiliated lessor. The lease provides for
      rent at the annual rate of $50,112 with 3% annual increases, starting 2004.
      The
      lease expires in February 2009, and is renewable for a five year term. The
      Company has the option to purchase the property at the appraised market
      value.




F-18
 *Table
          of Contents*




The
      minimum future lease payments under the Company’s real property leases are as
      follows:




Year
              Ended March 31,
            
            AmountOperating
              Lease2009
            
            $
            57,3892010
            
            
            24,206Total
            
            $
            81,595




Lease
                Payments to WM Realty Management2009
            
            
            450,0002010
            
            
            450,0002011
            
            
            450,0002012
            
            
            450,0002013
            
            
            450,0002014-2018
            
            
            2,250,0002019-2022
            
            
            1,800,000Total
            
            $
            6,300,000




NOTE
      12.
      PROFIT SHARING PLAN




Ranor
      has
      a 401(k) profit sharing plan that covers substantially all employees who have
      completed 90 days of service. Ranor retains the option to match employee
      contributions. The Company’s contributions were $ 15,573 and
      $10,687 for the years ended March 31, 2008 and 2007, respectively.




NOTE
      13.
      CAPITAL STOCK




Preferred
      Stock




The
      Company has 10,000,000 authorized shares of preferred stock and the board of
      directors has broad power to create one or more series of preferred stock and
      to
      designate the rights, preferences, privileges and limitation of the holders
      of
      such series. The board of directors has created one series of preferred stock
      -
      the series A convertible preferred stock (“series A preferred stock”).




Each
      share of series A preferred stock was initially convertible into one share
      of
      common stock. As a result of the failure of the Company to meet the levels
      of
      earnings before interest, taxes, depreciation and amortization for the years
      ended March 31, 2006 and 2007, the conversion rate changed, and, at March 31,
      2008, each share of series A preferred stock was convertible into 1.3072 shares,
      with an effective conversion price of $.2180.




The
      shares of series A preferred stock and warrants to purchase a total of
      11,220,000 shares of common stock were issued pursuant to a securities purchase
      agreement dated February 24, 2006. Contemporaneously with the securities
      purchase agreement, the Company entered into a registration rights agreement
      with the investor, pursuant to which it agreed to register the shares of common
      stock underlying the securities in accordance with a schedule. The registration
      statement was not declared effective in accordance with the schedule, and the
      Company issued 33,212 shares of series A preferred stock to the investor as
      liquidated damages.




No
      shares
      of series A preferred stock were converted during the year ended March 31,
      2007.
      During the year ended March 31, 2008, 734,398 shares of series A preferred
      stock
      were converted into 960,000 shares of common stock.




F-19
 *Table
          of Contents*




The
      Company had 7,018,064 and 7,719,250 shares of series A preferred stock
      outstanding at March 31, 2008 and 2007.




In
      addition to the conversion rights described above, the certificate of
      designation for the series A preferred stock provides as follows:




The
      holder of the series A preferred stock or its affiliates will not be entitled
      to
      convert the series A preferred stock into shares of common stock or exercise
      warrants to the extent that such conversion or exercise would result in
      beneficial ownership by the investor and its affiliates of more than 4.9% of
      the
      shares of common stock outstanding after such exercise or conversion. This
      provision cannot be amended.




No
      dividends are payable with respect to the series A preferred stock and no
      dividends are payable on common stock while series A preferred stock is
      outstanding. The common stock shall not be redeemed while preferred stock is
      outstanding.




If,
      during the period ending February 24, 2009, the Company issues common stock
      at a
      price, or options, warrants or other convertible securities with a conversion
      or
      exercise price less than the conversion price (presently $.218025), with certain
      specified exceptions, the number of shares issuable upon conversion of one
      share
      of series A preferred stock is adjusted to reflect a conversion price equal
      to
      the lower price.




The
      holders of the series A preferred stock have no voting rights. However, so
      long
      as any shares of series A preferred stock are outstanding, the Company shall
      not, without the affirmative approval of the holders of 75% of the outstanding
      shares of series A preferred stock then outstanding, (a) alter or change
      adversely the powers, preferences or rights given to the series A preferred
      stock, (b) authorize or create any class of stock ranking as to dividends or
      distribution of assets upon liquidation senior to or otherwise pari passu with
      the series A preferred stock, or any of preferred stock possessing greater
      voting rights or the right to convert at a more favorable price than the series
      A preferred stock, (c) amend its certificate of incorporation or other charter
      documents in breach of any of the provisions hereof, (d) increase the authorized
      number of shares of series A preferred stock, or (e) enter into any agreement
      with respect to the foregoing.




Upon
      any
      liquidation the Company is required to pay $.285 for each share of Series A
      preferred stock. The payment will be made before any payment to holders of
      any
      junior securities and after payment to holders of securities that are senior
      to
      the series A preferred stock.




The
      holders of the series A preferred stock do not have voting rights. However,
      the
      approval of the holders of 75% of the outstanding shares of series A preferred
      stock is required to amend the certificate of incorporation, change the
      provisions of the preferred stock purchase agreement, to authorize additional
      series A preferred stock in addition to the 9,000,000 authorized, or to
      authorize any class of stock that ranks senior with respect to voting rights,
      dividends or liquidations.




Pursuant
      to the securities purchase agreement relating to the issuance of the series
      A
      preferred stock and warrants, the Company agreed as follows:




The
      Company will not to issue any additional preferred stock until the earlier
      of
      (a) three years from the Closing or (b) the date that the investor transfer
      and/or converts not less than 90% of the shares of series A preferred stock
      and
      sells the underlying shares of common stock,




The
      investor has the right of first refusal in the event that the Company seeks
      to
      raise additional funds through a private placement of securities, other than
      exempt issuances. The percentage of shares that investor may acquire is based
      on
      the ratio of shares held by the investor plus the number of shares issuable
      upon
      conversion of series A preferred stock owned by the investor to the total of
      such shares.




The
      Company is required to maintain a board of directors on which a majority of
      directors are independent directors and an audit committee composed solely
      of
      independent directors and the compensation committee with have a majority of
      independent directors. If the Company fails to meet these requirements, the
      Company is to pay liquidated damages, payable in cash or by the issuance of
      additional shares of series A preferred stock, as the investor shall determine.
      The Company’s maximum liability under this provision is $396,000. At March 31,
      2008, the Company was in compliance with this provision.




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Common
      Stock Purchase Warrants




In
      February 2006, we issued to the investor warrants to purchase 11,220,000 shares
      of common stock in connection with its purchase of the series A preferred stock.
      These warrants are exercisable, in part or full, at any time from February
      24,
      2006 until February 24, 2011. If the shares of common stock are not registered
      pursuant to the Securities Act of 1933, the holders of the warrants have
      cashless exercise rights which will enable them to receive the value of the
      appreciation in the common stock through the issuance of additional shares
      of
      common stock. These warrants had initial exercise prices of $0.57 as to
      5,610,000 shares and $0.855 as to 5,610,000 shares. As a result of the Company’s
      failure to meet the EBITDA per share targets for the years ended March 31,
      2006
      and 2007, the exercise prices per share of the warrants were reduced from $0.57
      to $.43605 and from $0.855 to $.654075.




If,
      during the period ending February 24, 2009, the Company issues common stock
      at a
      price, or options, warrants or other convertible securities with a conversion
      or
      exercise price less than the applicable exercise prices, with certain specified
      exceptions, the exercise price of the warrants is reduced to reflect an exercise
      price equal to the lower price. This adjustment does not affect the number
      of
      shares of common stock issuable upon exercise of the warrants.




During
      the year ended March 31, 2008, we issued 1,510,000 shares of common stock upon
      exercise or warrants having an exercise price of $.43605. The Company had
      estimated the costs of warrants at $.03 per warrant using Black Scholes model,
      at the time of issuance. The assumptions were market price of $.28, risk free
      rate of 5% and volatility of 28%.




On
      September 1, 2007, the Company entered into a contract with an investor
      relations firm pursuant to which the Company issued three-year warrants to
      purchase 112,500 shares of common stock at an exercise price of $1.40 per
      share.   Using the Black-Scholes options pricing formula assuming a
      risk free rate of 5%, volatility of 28.5%, a term of three years, and the price
      of the common stock on September 1, 2007 of $0.285 per share, the value of
      the
      warrant was calculated at $0.0001 per share issuable upon exercise of the
      warrant, or a total of $11. Since the warrant permits the Company to deliver
      unregistered shares, the Company has the control in settling the contract by
      issuing equity. The cost of warrants was added the additional paid in
      capital.




Common
      Stock




The
      Company had 12,572,995 shares of common stock outstanding at March 31, 2008
      and
      10,049,000 shares of common stock outstanding at March 31, 2007.




During
      the year ended March 31, 2007, the Company issued 82,000 shares of common stock
      to employees. During the year ended March 31, 2008, the Company issued 1,510,000
      shares of common stock upon exercise of warrants, 960,000 shares of common
      stock
      upon conversion of series A preferred stock, and 53,995 shares for services.




NOTE
      14.
      STOCK BASED COMPENSATION




In
      February 2006, our board of directors adopted, and in July 2006 the board
      amended, and in October 2006, the stockholders approved, the 2006 long-term
      incentive plan (the “Plan”) covering 1,000,000 shares of common stock. The
      purpose of the Plan is to attract, retain and reward officers and other key
      employees, directors, consultants and independent contractors of the Company.
      The Plan provides for the grant of incentive and non-qualified options, stock
      grants, stock appreciation rights and other equity-based incentives to
      employees, including officers, and consultants. The Plan is to be administered
      by a committee of not less than two directors each of whom is to be an
      independent director. In the absence of a committee, the plan is administered
      by
      the board of directors. Independent directors are not eligible for discretionary
      options. As initially adopted, each newly elected independent director received
      at the time of his election, a five-year option to purchase 25,000 shares of
      common stock at the market price on the date of his or her
      election.




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Pursuant
      to the amendment to the plan, the number of shares subject to the initial option
      grant was increased to 50,000 shares, with the option being exercisable, with
      respect to the then current independent directors as to 30,000 shares in July
      2006 and as to 10,000 shares in each of February 2007 and 2008. In addition,
      the
      plan provides for the annual grant of an option to purchase 5,000 shares of
      common stock on July 1st of each year, commencing July 1, 2009. For each
      independent director who is elected after July 31, 2006, the director will
      receive an option to purchase 50,000 shares at an exercise price equal to the
      fair market value on the date of his or her election. The option will vest
      as to
      30,000 shares nine months from the date of grant and as 10,000 shares on each
      of
      the first and second anniversaries of the date of grant. These directors will
      receive an annual grant of an option to purchase 5,000 shares of common stock
      on
      the July 1st coincident with or following the third anniversary of the date
      of
      his or her first election. Pursuant to the plan, the Company granted
      non-qualified stock options to purchase an aggregate of 150,000 shares of common
      stock at an exercise price of $.285 per share, which was determined to be the
      fair market value on the date of grant, to the three independent directors.




On
      April
      1, 2007, the Company granted options to purchase 211,660 shares of common stock
      at an exercise price of $.285 to the employees. The exercise price was
      determined to be the fair market value of the common stock on the date of grant.
      The number of securities remaining available under equity compensation plans
      is
      641,341.




NOTE
      15.
      CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS




The
      Company maintains bank account balances, which, at times, may exceed insured
      limits. The Company has not experienced any losses with these accounts and
      believes that it is not exposed to any significant credit risk on cash.




The
      Company has been dependent in each year on a small number of customers who
      generate a significant portion of our business, and these customers change
      from
      year to year. To the extent that the Company is unable to generate orders from
      new customers, it may have difficulty operating profitably.




The
      following table sets forth information as to revenue derived from those
      customers who accounted for more than 10% of our revenue in the years ended
      March 31, 2008 and 2007:




Year
                Ended March 31,2008
            
            
            2007Customer
            
            
            Dollars
            
            
            Percent
            
            
            Dollars
            
            
            PercentA
            
            $
            16,143,078
            
            
            51
            %
            $
            3,407,363
            
            
            18
            %B
            
            
            5,434,054
            
            
            17
            %
            
            129,985
            
            
            1
            %C
            
            
            1,769,106
            
            
            6
            %
            
            2,587,151
            
            
            14
            %D
            
            
            1,275,202
            
            
            4
            %
            
            2,415,124
            
            
            13
            %




NOTE
      16.
      EMPLOYMENT AGREEMENTS




On
      June
      19, 2007, the Company entered into an employment agreement, effective April
      1,
      2007 with its chief executive officer. Pursuant to the agreement, the Company
      is
      employing the chief executive officer for an initial term commencing April
      1,
      2007 and expiring on March 31, 2009 and continuing on a year-to-year basis
      thereafter unless terminated by either party on 90 days written notice prior
      to
      the expiration of the initial term or any one-year extension. The agreement
      provides for the chief executive officer to receive an annual base salary of
      $160,000. Increase in base salary and bonus compensation, stock options or
      other
      equity-based incentives are at the discretion of the compensation committee
      of
      the board of directors. The chief executive officer is also entitled to
      reimbursement of his commuting expenses. The agreement may be terminated by
      the
      Company with or without cause or by resignation. If the Company terminates
      the
      agreement without cause, the Company is to pay severance pay equal to his salary
      for the balance of the term plus the amount of his bonus received in the prior
      year. The agreement also includes non-competition and non-solicitation
      provisions, subject to standard exceptions.




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On
      June
      19, 2007, the Company entered into an employment contract with its chief
      financial officer, dated retroactively to April 1, 2007. Pursuant to the terms
      of this agreement, the Company is employing the chief financial officer for
      an
      initial term commencing April 1, 2007 and expiring March 31, 2009 and continuing
      on a year-to-year basis thereafter unless terminated by either party on 90
      days
      written notice prior to the expiration of the initial term or any one-year
      extension. The agreement provides for the chief financial officer to receive
      an
      annual salary of $110,000. Increases in base salary and bonus compensation,
      stock options or other equity based incentives are at the discretion of the
      compensation committee of the board of directors. The agreement may be
      terminated by the Company with or without cause or by resignation. If the
      Company terminates the agreement without cause, the Company is to pay severance
      pay equal to her salary for the balance of the term plus the amount of her
      bonus
      received in the prior year. The agreement also includes non-competition and
      non-solicitation provisions, subject to standard exceptions.




In
      February 2006, Ranor entered into an employment agreement with its chief
      executive officer pursuant to which he would serve as Ranor’s chief executive
      officer for a term of three years ending on February 28, 2009. Pursuant to
      the
      agreement, the Company pays salary at the annual rate of $200,000. Ranor’s chief
      executive officer is also eligible for performance bonuses based on financial
      performance criteria set by the board. In the event that the terminates Mr.
      Youtt’s employment without cause, the Company is required to make a lump-sum
      payment to him equal to his base compensation for the balance of the term and
      to
      provide the insurance coverage that we would provide if he remained
      employed.




NOTE
      17.
      SEGMENT INFORMATION




We
      operate in one industry segment - metal fabrication and precision machining.
      All
      of our operations, assets and customers are located in the United
      States.


F-23