UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                                 Amendment No. 1

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

                   For the fiscal year ended December 31, 2005

|_|   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                                   (I.R.S. Employer
      jurisdiction of                                  Identification No.)
       incorporation)

     One 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: |_|

      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
|_|

      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. |_|

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

      State issuer's revenue for its most recent fiscal year: $14,269,982

      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 9,967,000 shares of the Company's common stock, $.0001 par
value, outstanding as of March 31, 2006.

      Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

                    DOCUMENTS INCORPORATED BY REFERENCE: None

<PAGE>

EXPLANATORY NOTE

This annual report on Form 10-KSB/A is being filed to amend our annual report on
Form 10-KSB for the year ended December 31, 2005, which was filed with the
Securities and exchange Commision on April 17, 2006. The changes are being made:
(i) on the cover page to change the information as to the value of shares held
by non-affiliates; (ii) in Item 8A, and (iii) in the financial statements to
reflect changes in the financial statements for the year ended Decemeber 31,
2005 that were made in amendment no. 2 to our registration statement on Form
SB-2. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as
amended, the Form 10-QSB/A contains current dated certifications form the
Principal Executive Officer and the Principal Financial Officer.

We have not amended any other sections of the Form 10-KSB or updated the
information contained herein for events occurring subsequent to April 17, 2006,
the filing date of the original Form 10-KSB.

Item 1.  Business.

      We produce large metal fabrications and perform precision machining
operations for large military, commercial, nuclear, shipbuilding, industrial and
aerospace customers. Our principal services are large metal fabrications,
machining and engineering. Each of our contracts covers a specific product. We
do not mass-produce any products or distribute such products on the open market.
We render our services under "build to print" contracts with our contractors.
However, we also help our customers to analyze and develop their projects for
constructability by providing engineering and research and development services,
for which we bill our customers.

      We are one of a small number of large precision metal fabrication
companies located in the United States. However, only a few others produce
products in all industry sectors that we service. In recent years, the capital
goods market experienced a slow down due to the industry over-build of product
in the late 1990's. Additional contributions to the industry slow-down resulted
from the events of September 11, 2001. However, based on recent project
inquiries, recent projects awarded and current customer demands for our
services, we believe the our market has rebounded.

      Although we provide manufacturing services to large governmental programs,
we usually do not work directly for agencies of the United States government.
Rather, we performs our services for large governmental contractors and large
utility companies.

Organization; Merger

      On February 24, 2006, we acquired all of the equity securities of Ranor,
Inc. As a result of the acquisition of Ranor, our business became the business
of Ranor. The acquisition of Ranor will be accounted for as a reverse
acquisition. The accounting rules for reverse acquisitions require that
beginning with the date of the merger, February 24, 2006, our balance sheet
includes the assets and liabilities of Ranor and our equity accounts were
recapitalized to reflect the net equity of Ranor. In addition, our historical
operating results will be the operating results of Ranor. See "Item 12. Certain
Relationships and Related Transactions" for information relating to our
acquisition of Ranor.

      Prior to the acquisition of Ranor, we were not engaged in any active
business.

      Ranor has been in business since 1956, and was sold by its founders in
1999 to Critical Components Corporation, a subsidiary of Standard Automotive
Corporation. From June 1999 until August 2002, Ranor was operated by Critical
Components Corporation. In December 2001, Standard filed for protection under
the Bankruptcy Code and operated under Chapter 11 until on or about the quarter
ended June 30, 2002. Subsequently, all Standard's holdings were sold. In 2003,
Ranor, then known as Rbran Acquisition, Inc., acquired the Ranor assets from the
bankruptcy estate. Ranor is a Delaware corporation, founded in May 2002 under
the name Rbran Acquisition, Inc. and changed its name to Ranor, Inc. in August
2002. Ranor's executive offices are located at One Bella Drive, Westminster, MA
01473, telephone (978) 874-0591. Ranor' website is http://www.ranor.com.
Information on Ranor's website or any other website is not part of this annual
report.

      We are a Delaware corporation, organized in 2005 under the name Lounsberry
Holdings II, Inc. Our corporate name was changed to Techprecision Corporation on
March 6, 2006. Our executive offices are located at One Bella Drive,
Westminster, MA 01473, telephone (978) 874-0591.

                                     - 1 -
<PAGE>

      References in this annual report to "we," "us," "our" and similar words
refer to Techprecision Corporation and its subsidiary, unless the context
indicates otherwise, and, prior to the effectiveness of the reverse acquisition,
these terms refer to Ranor.

                                  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

We may require additional financing for our operations.

      Upon completion of the reverse acquisition, our cash position was $10,000.
The only funding available to us, other than our cash flow from operations, is
$1.0 million revolving credit line with a bank. We cannot assure you that this
facility will be sufficient to provide us with the funds necessary to enable us
to perform our obligations under our contracts. 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.

As a result of the reverse acquisition, our expenses will increase
significantly.

      As a result of the reverse acquisition, our ongoing expenses have
increased significantly, including compensation to Techprecision LLC, a
management company which is affiliated with us, under its management agreement
and ongoing public company expenses. Our failure to generate sufficient revenue,
to reduce expenses or to obtain financing to cover our increased level of
expenses could impair our ability to continue in business. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Management - Compensation."

Our losses are continuing and we may not be able to operate profitably.

      We have shown losses for the fiscal years ended March 31, 2005 and 2004,
and such losses have continued through the nine months ended December 31, 2005.
We cannot assure you that we will be able to operate profitably, and the
additional expenses which we are incurring as a result of our status as a
reporting company under the Securities Exchange Act of 1934, as amended, may
increase the difficulty in operating profitably.

Because all of our services are performed pursuant to special order contracts,
we have no continuing source of revenue.

      We do not have long-term contracts with almost all of our customers, and
major contracts with a small number of customers accounts for a significant
percentage of our revenue. For the nine months ended December 31, 2005, our two
largest customers accounted for approximately 40% of our revenue, and each of
these customers accounted for less than 10% of our revenue in the fiscal year
ended March 31, 2005. We must bid 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. Our failure to generate new business on an ongoing basis would
materially impair our ability to operate profitably.

                                     - 2 -
<PAGE>

Because a significant portion of our revenue is derived from services rendered
from the defense, aerospace and related industries, our operating results may
suffer from conditions affecting this market.

      Substantially all of our revenue is derived from customers in the defense,
aerospace, nuclear, industrial and related industries. Our business may suffer
from any budgeting, economic or other trends that have the effect of reducing
the requirements for our services, including changes in federal budgeting which
may reduce the budget of those agencies that either engage us directly or affect
the contracts of private sector clients for whom we perform services as
subcontractors under prime contracts with government agencies.

We face significant competition from both domestic and foreign sources.

      We face competition from a number of domestic and foreign companies, some
of which are considerably larger and better capitalized than we are. For some of
our products, such as commercial nuclear canisters and machine parts, we compete
with foreign manufacturers, which have may have costs than we, which could
impact our ability to make sales of these products.

Our operating results in future periods may vary from quarter to quarter, and,
as a result, we may fail to meet the expectations of our investors and analysts,
which may cause our stock price to fluctuate or decline.

      Our revenue and operating results have fluctuated from quarter to quarter
significantly in the past. We expect that fluctuations in both revenue and net
income will continue due to a variety of factors, many of which are outside of
our control and which reflect the nature of our business. A substantial portion
of our operating expenses is related to personnel costs, depreciation and rent
which cannot be adjusted quickly and, therefore, cannot be easily reduced in
response to lower revenue levels or changes in client requirements. Due to these
factors and the other risks discussed in this annual report, you should not rely
on period-to-period comparisons of our results of operations as an indication of
future performance.

Our failure to meet our customers' requirement could result in decreased
revenue, increased costs and negative publicity.

      Our products require the precision manufacturing of products to very
exacting specifications which are required in the industries to which we market
our services. Our failure to meet these specifications could result in both cost
overruns on a particular contract and a loss of our reputation, which would
significantly impair our ability to generate contracts.

As a government subcontractor we are subject to government regulations.

      We must comply with complex procurement laws and regulations. If a
government review or investigation uncovers improper or illegal activities, we
may be subject to civil and criminal penalties and administrative sanctions,
including termination of contracts, forfeiture of profits, suspension of
payments and debarment from doing business with federal government agencies.

                                     - 3 -
<PAGE>

Because our contracts are generally awarded through a competitive bidding
process, we cannot be assured of obtaining business.

      Our government subcontracts are usually awarded through a competitive
bidding process which entails risks not present in other circumstances. We may
spend substantial sums analyzing and preparing a bid and not be awarded a
contract. Furthermore, we may not be given the opportunity to comment on the
proposed terms of the bid, and it is possible that a bid may be tailored to meet
the specifications of a competitor. Our failure to receive contracts on which we
bid could significantly impair our ability to continue in business.

The terms on which we may raise additional capital may result in significant
dilution and may impair our stock price.

      Because of both the absence of a public market for our common stock, the
terms of our recent private placement and the number of outstanding warrants and
the exercise price and other terms on which we may issued common stock upon
exercise of the warrants, it may be difficult for us to raise additional capital
if required for our present businesses and 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 and pay
damages to the investor in the event that the registration statement is not
filed or declared effective by specified dates. The price and terms of any
financing which would be available to us could result in both the issuance of a
significant number of shares and significant downward pressure on our stock
price and could result in a reduction of the conversion price of the series A
preferred stock and exercise price of the warrants held by the Barron Partners.

We may not be able to continue to grow through acquisitions.

      An important part of our growth strategy is to expand our business and to
acquire other businesses, which may or may not be related to our current
businesses. Such acquisitions may be made with cash or our securities or a
combination of cash and securities. If our stock price is less than the exercise
price of the outstanding warrants, it is not likely that that warrants will be
exercised. To the extent that we require cash, we may have to borrow the funds
or sell equity securities. The issuance of equity, if available, would result in
dilution to our stockholders. We have no commitments from any financing source
and we may not be able to raise any cash necessary to complete an acquisition.
If we fail to make any acquisitions, our future growth may be limited. As of the
date of this annual report, we do not have any agreement or understanding,
either formal or informal, as to any acquisition.

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

      If 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:

                                     - 4 -
<PAGE>

      o     the difficulty of integrating acquired products, services or
            operations;

      o     the potential disruption of the ongoing businesses and distraction
            of our management and the management of acquired companies;

      o     the difficulty of incorporating acquired rights or products into our
            existing business;

      o     difficulties in disposing of the excess or idle facilities of an
            acquired company or business and expenses in maintaining such
            facilities;

      o     difficulties in maintaining uniform standards, controls, procedures
            and policies;

      o     the potential impairment of relationships with employees and
            customers as a result of any integration of new management
            personnel;

      o     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;

      o     the effect of any government regulations which relate to the
            business acquired;

      o     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.

      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, these risks and problems could disrupt our ongoing business,
distract our management and employees, increase our expenses and adversely
affect our results of operations.

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 has
and in the future 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
restricts our ability to issue additional series of preferred stock, we may
issue such shares in the future.

                                     - 5 -
<PAGE>

The issuance of shares through our stock compensation and incentive plans may
dilute the value of existing stockholders.

      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.

Shares may be issued pursuant to our stock plans which may affect the market
price of our common stock.

      We may issue stock upon the exercise of options or pursuant to stock
grants covering a total of 1,000,000 shares of common stock pursuant to our 2006
long-term incentive plan. We also intend to issue 133,000 shares of restricted
stock to certain key employees. 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 we are not subject to compliance with rules requiring the adoption of
certain corporate governance measures, our stockholders have limited protections
against interested director transactions, conflicts of interest and similar
matters.

      The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and
enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq
Stock Market as a result of Sarbanes-Oxley require the implementation of various
measures relating to corporate governance. These measures are designed to
enhance the integrity of corporate management and the securities markets and
apply to securities which are listed on those exchanges or the Nasdaq Stock
Market. Because we are not presently required to comply with many of the
corporate governance provisions and because we chose to avoid incurring the
substantial additional costs associated with such compliance any sooner than
necessary, we have not yet adopted all of these measures. We are not in
compliance with requirements relating to the distribution of annual and interim
reports, the holding of stockholders meetings and solicitation of proxies for
such meeting and requirements for stockholder approval for certain corporate
actions. Until we comply with such corporate governance measures, regardless of
whether such compliance is required, the absence of such standards of corporate
governance may leave our stockholders without protections against interested
director transactions, conflicts of interest and similar matters and investors
may be reluctant to provide us with funds necessary to expand our operations.

Failure to achieve and maintain effective internal controls in accordance with
Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on
our business and operating results and stockholders could lose confidence in our
financial reporting.

      Effective internal controls are necessary for us to provide reliable
financial reports and effectively prevent fraud. If we cannot provide reliable
financial reports or prevent fraud, our operating results could be harmed. We
may be required to document and test our internal control procedures in order to
satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, which
requires increased control over financial reporting requirements, including
annual management assessments of the effectiveness of such internal controls and
a report by our independent certified public accounting firm addressing these
assessments. Failure to achieve and maintain an effective internal control
environment, regardless of whether we are required to maintain such controls,
could also cause investors to lose confidence in our reported financial
information, which could have a material adverse effect on our stock price.

                                     - 6 -
<PAGE>

We do not anticipate paying dividends on our common stock.

      We are prohibited from paying dividends on our common stock while the
series A preferred stock is outstanding.

Because there is no public market for our common stock, you may have difficulty
selling common stock that you own.

      Although we are registered pursuant to the Securities Exchange Act of
1934, we have approximately 55 stockholders and there is no public market for
our common stock. None of the presently outstanding shares of common stock may
be sold except pursuant to an effective registration statement. We have agreed
to file a registration statement to enable our stockholders to sell their
shares, neither the filing of a registration statement nor the effectiveness of
the registration statement will assure a public market for out common stock.
Accordingly we cannot assure you that there will be any public market for our
common stock.

Because we may be subject to the "penny stock" rules, you may have difficulty in
selling our common stock.

      If a public market develops for our common stock and if our stock price is
less than $5.00 per shares, our stock would be subject to the SEC's penny stock
rules, which impose additional sales practice requirements and restrictions on
broker-dealers that sell our stock to persons other than established customers
and institutional accredited investors. These rules may affect the ability of
broker-dealers to sell our common stock and may affect your ability to sell any
common stock you may own.

      According to the SEC, the market for penny stocks has suffered in recent
years from patterns of fraud and abuse. Such patterns include:

      o     Control of the market for the security by one or a few
            broker-dealers that are often related to the promoter or issuer;

      o     Manipulation of prices through prearranged matching of purchases and
            sales and false and misleading press releases;

      o     "Boiler room" practices involving high pressure sales tactics and
            unrealistic price projections by inexperienced sales persons;

      o     Excessive and undisclosed bid-ask differentials and markups by
            selling broker-dealers; and

      o     The wholesale dumping of the same securities by promoters and
            broker-dealers after prices have been manipulated to a desired
            level, along with the inevitable collapse of those prices with
            consequent investor losses.

                                     - 7 -
<PAGE>

As an issuer of "penny stock" the protection provided by the federal securities
laws relating to forward looking statements does not apply to us.

      Although the federal securities law provide a safe harbor for
forward-looking statements made by a public company that files reports under the
federal securities laws, this safe harbor is not available to issuers of penny
stocks. As a result, we will not have the benefit of this safe harbor protection
in the event of any based upon an claim that the material provided by us,
including this annual report, contained a material misstatement of fact or was
misleading in any material respect because of our failure to include any
statements necessary to make the statements not misleading.

Fluctuations in our operating results and announcements and developments
concerning our business affect our stock price.

      Historically, there has been volatility in the market price for common
stock of companies such as us. Our quarterly operating results, the number of
stockholders desiring to sell their shares, changes in general economic
conditions and the financial markets, the execution of new contracts and the
termination or expiration of existing license agreements and other developments
affecting us, could cause the market price of our common stock to fluctuate
substantially. Further, since a majority of our operating expenses, particularly
personnel and related costs, depreciation and rent, are relatively fixed in
advance of any particular quarter, the underutilization of our technical
personnel may cause significant variations in our operating results in any
particular quarter and could result in losses for the quarter.

We cannot predict when or whether an active market for our common stock will
develop.

      In the absence of an active trading market, you may have difficulty buying
and selling or obtaining market quotations; the market visibility for our stock
may be limited, and the lack of visibility for our common stock may have a
depressive effect on the market price for our common stock.

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.

The registration and potential sale by our stockholders of a significant number
of shares could encourage short sales by third parties.

      The number of shares of common stock that is subject to registration
rights includes all of the 7,719,250 shares of common stock issuable on
conversion of the series A preferred stock held by Barron Partners as well as
the 11,220,000 shares of common stock issuable to Barron Partners upon exercise
of its warrants, together with the 100,000 shares of common stock owned by our
stockholders prior to the reverse acquisition. The significant downward pressure
on our stock price caused by the sale or potential sale of a significant number
of shares could cause our stock price to decline, thus allowing short sellers of
our stock an opportunity to take advantage of any decrease in the value of our
stock. The presence of short sellers in our common stock may further depress the
price of our common stock.

                                     - 8 -
<PAGE>

      If stockholders whose shares are being registered sell a significant
number of shares of common stock, the market price of our common stock may
decline. Furthermore, the sale or potential sale the offered shares and the
depressive effect of such sales or potential sales could make it difficult for
us to raise funds from other sources.

                           FORWARD-LOOKING STATEMENTS

      Statements in this annual report may be "forward-looking statements."
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 are likely to, differ materially
from what is expressed or forecasted in the forward-looking statements due to
numerous factors, including those described above and those risks discussed from
time to time in this prospectus, including the risks described under "Risk
Factors," and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in this annual report and in other documents which we
file with the Securities and Exchange Commission. In addition, such statements
could be affected by risks and uncertainties related to our ability to generate
business on an on-going business, 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 ability to raise any financing which we may require
for our operations, 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 circumstances after the date of
this annual report.

                                    BUSINESS

      We produce large metal fabrications and perform precision machining
operations for large military, commercial, nuclear, aerospace, shipbuilding and
industrial customers. Our principal services are large metal fabrications,
machining and engineering. Each of our contracts covers a specific product. We
fabricate nuclear grade steel casks, canisters and housings for the
transportation and storage of radioactive materials; we produce large
fabrications for Navy aircraft carriers, submarines and commercial vessels; and
we manufactures pulp and paper machinery, gas turbine power generation
equipment, oil refinery and utilities equipment. We are one of two companies
currently capable of machining one-piece aluminum domes for Boeing's Delta III
and Delta IV rocket programs. We do not mass-produce any products or distribute
such products on the open market.

      We perform most of our service pursuant to "build to print" contracts,
which means that we must manufacture products in accordance with very exacting
specification. These contracts are generally awarded in a bidding process.
Because of the nature of the products that we manufacture, there is a very low
tolerance for error. We will also help our clients to develop their projects by
providing engineering and research and development services. Periodically, we
will also perform research and development services for our customers as part of
a contract. However, the costs of such research and development work, is paid by
the customer. Through this periodic development work we may develop the
intellectual property to complete the project. In such cases when the work is
complete, we will own this intellectual property. However, we do not possess any
patents, trademarks, licenses, franchises, concessions or royalty agreements.

                                     - 9 -
<PAGE>

Products

      All of our products are built pursuant to contracts. Because we have
lifting capacity up to 100 tons, we have the ability to manufacture very large
products that must be fabricated in a single piece. The following are examples
of recent manufacturing contracts.

      We have been the sole source for a major defense contractor for the
manufacture of housings for the defense contractor's sonar system. This system
is currently being retro-fitted onto the Navy's entire fleet of Los Angeles
Class submarines. Future installations will go on Virginia Class and SSGN Class
submarines.

      We presently provide machining services to a division of another major
defense contractor. We produce primary shield tank heads, sonar system pods and
fairings, and a variety of miscellaneous components.

      One of our customers provides a complete nuclear waste storage system to
commercial nuclear power plants. We currently manufacture lifting equipment for
this company.

      Another customer is currently involved in a variety of commercial nuclear
reactor repair and overhaul projects. We manufactured several components needed
to support this work.

Source of Supply

      Our operations are partly dependent on the availability of raw materials.
The projects that we undertake are metal fabrications and machining of various
traditional and special alloys such as inconel, titanium and high tensile
strength steels, and the customer frequently provides us with the raw material.
Some of these materials selected for given projects require long lead times to
obtain. We have worked with a number of different metal suppliers over the years
to obtain these materials, and we currently work with such raw material
suppliers as Bethlehem Lukens Plate, Process Systems International and Joseph T
Ryerson and Sons. We have multi-year relationships with these suppliers.
Although some materials (due to their alloy compositions) require long lead
times to obtain, we have never experienced a shortage of any of these materials.

Marketing

      A significant portion of our contracts result from the competitive bidding
process, which are frequently limited to pre-qualified bidders. Most of our
sales inquiries are from existing customers. We have a marketing team of six,
including a sales manager and five technical personnel which markets our
services as well as our qualifications to both existing and potential customers
through personal contacts and trade shows. We also engage an independent sales
representative.

                                     - 10 -
<PAGE>

Principal Customers

      We do not have long-term contracts with any customer, and major contracts
with a small number of customers accounts for a significant percentage of our
revenue. Our customers include many of the major domestic defense and aerospace
companies. Because our services are rendered pursuant to separate contracts for
separate projects, our customer mix changes significantly from year to year. Two
customers accounted for more than 10% of our revenue in each of the nine months
ended December 31, 2005 and the fiscal years ended March 31, 2005 and 2004. Our
two largest customers for the nine months ended December 31, 2005 were the
University of Rochester, from which we recognized revenue of approximately $3.0
million (21.6% of revenue), and BAE Systems, from which we recognized revenue of
approximately $2.6 million (18.7%). For the year ended March 31, 2005, we
recognized revenue of approximately $2.7 million (18.8%) from Transnuclear, Inc.
and approximately $1.6 million (11.0%) from Battenfeld Gloucester Engineering,
Inc. For the year ended March 31, 2004, we recognized revenue of approximately
$2.3 million (21.1%) from Spincraft and approximately $1.8 million (16.9%) from
BAE Systems. No other customer accounted for 10% or more of our revenue in any
of those period.

Competition

      We face competition from a number of domestic and foreign manufacturers.
No one company dominates the industry, although many of our competitors are
larger, better known and have greater resources then we. Since many of our
contracts are awarded through a bidding process, our ability to win an award is
dependent upon a number of factors, including the price and our ability or
perceived ability to manufacture the products in accordance with specifications
and the customer's time requirements, for which our reputation as a quality
manufacturer is crucial. 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. Further, to the extent that the bidding
proposal is based on specification which are provided by a competitor, we are at
a disadvantage in seeking to obtain that contract.

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, we are subject to government procurement and
acquisition regulations. Under these regulations, the government has the right
of termination for the convenience of the government and certain renegotiation
rights as well as a right of inspection. If a government review or investigation
uncovers improper or illegal activities, we may be subject to civil and criminal
penalties and administrative sanctions, including termination of contracts,
forfeiture of profits, suspension of payments and debarment from doing business
with federal government agencies. Some of the work we perform for our customers
are 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.

                                     - 11 -
<PAGE>

Intellectual Property Rights

      We have no patent rights. In the course of our business we develop
proprietary 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.

Personnel

      We currently employ 140 employees, of which 19 are administrative, eight
are engineering and approximately 113 are manufacturing personnel. None of our
employees is represented by a labor union, and we believe that are employee
relations are good.

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 One
Bella Drive, Westminster, Massachusetts 01473, pursuant to a 15-year lease that
expires February 28, 2021, at an annual rental of $438,000, subject to annual
escalations. The lease provides for two five-year extension and a purchase
option at appraised value. We sold the real estate to WM Realty Management
contemporaneously with the reverse acquisition for $3.0 million. In connection
with WM Realty Management's financing of the real estate, we agreed to an
increase in the rental in the event of a default by WM Realty Management under
its mortgage.

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.

No matters were submitted to our stockholders during the fourth quarter of 2005.

                                     PART II

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

      There is no market for our common stock

      As of March 31, 2006, we had approximately 55 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 February 28, 2006, we had the following shares of common stock
reserved for issuance:

      o     7,719,250 shares issuable upon conversion of the series A preferred
            stock.

                                     - 12 -
<PAGE>

      o     11,220,000 shares issuable upon exercise of the warrants issued to
            Barron Partners.

      o     1,000,000 shares issuable upon exercise of stock options or other
            equity-based incentives pursuant to our 2006 long-term incentive
            plan, which is subject to stockholder approval.

      o     133,000 shares to be issued as restricted stock grants to key
            employees.

Equity Compensation Plan Information

      The following table summarizes the equity compensation plans under which
our securities may be issued as of February 28, 2006.

                                                             Number of
                       Number of                             securities
                       securities to                         remaining
                       be issued upon     Weighted-average   available for
                       exercise of        exercise price     future issuance
                       outstanding        of outstanding     under equity
                       options and        options and        compensation
   Plan Category       warrants           warrants           plans
--------------------   ----------------   ----------------   ----------------
Equity compensation          -0-                 --                 --
plans approved by
security holders

Equity compensation         75,000              $.285           1,058,000
plan not approved by
security holders

      The 2006 long-term incentive plan was approved by the board of directors,
subject to stockholder approval, and the outstanding options are subject to
stockholder approval of the plan. The plan has not yet been submitted to the
stockholders for their approval. We also have a plan for the issuance of 133,000
shares of commons stock to key employees as restricted stock grant.

      Information relating to the sale of unregistered securities during the
year ended December 31, 2005 is included in our Form 8-K, which was filed with
the SEC on March 3, 2006.

      On February 24, 2006, we entered into a stock redemption agreement with
Capital Markets Advisory Group, LLC, which was then our principal stockholder,
pursuant to which we purchased 928,000 shares of common stock from Capital
Markets for $200,000, using the proceeds from the sale of series A preferred
stock. The purchase was made contemporaneously with the acquisition of Ranor.

Item 6.  Management's Discussion and Analysis or Plan of Operations.

      The following discussion of the results of our operations and financial
condition should be read in conjunction with the financial statements of Ranor
and the related notes, which appear elsewhere in this prospectus. The following
discussion includes predictive statements. For a discussion of important factors
that could cause actual results to differ from results discussed in the
predictive statements, see "Forward Looking Statements."

Overview

      Lounsberry Holdings II, Inc. did not conduct any operations during 2005.
Its separate financial statements for the period February 10, 2005 through
December 31, 2005 appear elsewhere in this prospectus. Because of the reverse
acquisition, the following discussion relates to the separate financial
statements of Ranor.

                                     - 13 -
<PAGE>

      We operate in one distinct business - fabrication, precision machining and
engineering of metal products up to 100 tons. Most of the products are
fabricated from raw metal plate or forgings. All materials used in the
manufacturing of our products are acquired from raw material suppliers we have
worked with for many years. Our clients are generally military, shipbuilding,
national laboratories and industrial companies. Payment terms associated with
each project often include progress payments and occasionally include deposits.
Generally, payment terms are 30 to 45 days from the invoice date. A majority of
the work we perform for our customers are generally 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. Our revenues therefore are quite secure. Our gross
margins are typical for the industry.

      These products are manufactured for our clients under a build-to-print
scenario. Work is performed by our personnel under firm contracted purchase
orders, for each project undertaken at the facility. Our work is contracted
under terms that require down payments for the acquisition of materials.
Additionally, depending on the length of a given project, some contracts require
progress payments based on major milestones of work completed.

      From June 1999 until 2002, Ranor's business was conducted by a subsidiary
of Standard Automotive Corporation. In December 2001, Standard filed for
protection under the Bankruptcy Code and operated under Chapter 11. We acquired
the Ranor assets from the bankruptcy estate. However, as a result of the
bankruptcy, our customers were initially reluctant to use our services. In
recent years, as both the market for our services has improved and we have
demonstrated to our customers that we have both the financial and manufacturing
ability to meet their specifications and time requirements, we have been able to
improve both our revenue and our gross margin.

Critical Accounting Policies

      The preparation of the Company's financial statements conform to the
generally accepted accounting principles in the United States and 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 financial
statements from the assumptions, estimates and judgments used in the preparation
of our 2005 audited financial statements.

Revenue Recognition

      We derive revenues from (i) the fabrication of large metal components for
our customers; (ii) the precision machining of such large metal components;
(iii) engineering services relating to the constructability of these products,
and (iv) the installation of such components at the customers' locations when
the scope of a given project requires such installations.

      Our cost accounting system is set up to track our operations is the "units
of delivery method," otherwise known as "work in process" method. Accordingly,
income is recognized at the time at which a unit under contract is completed and
delivered to the customer. We have a firm purchase order or contract for each
project we undertake. Contracts for work to be performed are negotiated per
project and sometimes require a customer deposit to begin such work. We
generally use the customer's deposit to purchase the necessary raw material for
the project. Depending on the length of the project, we could require progress
payments based on milestones of completion as stipulated in the contract. Such
deposits and progress payments are treated as offsets to costs incurred on
uncompleted contracts.

                                     - 14 -
<PAGE>

Income Taxes

      Our fiscal year ends on March 31st. 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
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 and or
settled. 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, 2005, we had net operating loss
carry-forwards approximating $3,470,000. Pursuant to Section 382 of the Internal
Revenue Code, utilization of these losses may be limited in the event of a
change in control, as defined in the Treasury Regulations. The change in
ownership resulting from our acquisition of Ranor will limit our ability to use
the loss carryforwards.

New Accounting Pronouncements

      In November 2004, the FASB issued SFAS No. 151 "Inventory Costs, an
amendment of Accounting Research Bulletin ("ARB") No. 43, Chapter 4." The
amendments made by Statement 151 clarify that, abnormal amounts of idle facility
expense, freight, handling costs and wasted materials (spoilage) should be
recognized as current-period charges and require the allocation of fixed
production overheads to inventory based on the normal capacity of the production
facilities. The guidance is effective for inventory costs incurred during the
fiscal years beginning after June 15, 2005.

      In December 2004, The FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary
Transactions" ("SFAS 153"). The amendments made by SFAS 153 as based on the
principle that exchanges of nonmonetary assets should be measured based on the
fair value of the assets exchanged. Further, the amendments eliminate the narrow
exception for nonmonetary exchanges of similar productive assets and replace it
with a broader exception for exchanges of nonmonetary assets that do not have
commercial substance. Previously, Opinion 29 required that the accounting for an
exchange of a productive asset should be based on the recorded amount of the
asset relinquished. Opinion 29 provided for an exception to its basic
measurement principle (fair value) for exchanges of similar productive assets.
The Board believes that exception required that some nonmonetary exchanges,
although commercially substantive, be recorded on a carry over basis. By
focusing the exception on exchanges that lack commercial substance, the Board
believes this Statement produces financial reporting that more faithfully
represents the economics of the transaction. The Statement is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. Earlier application is permitted for nonmonetary asset exchanges occurring
in fiscal periods beginning after the date of issuance. The provision of this
statement shall be applied prospectively.

                                     - 15 -
<PAGE>

      In December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
Payment." Statement 123R will provide investors and other users of financial
statements with more complete financial information by requiring that the
compensation cost relating to share-based payment transactions be recognized in
financial statements. That cost will be measured based on the fair value of the
equity or liability instruments issued. Statement 123R covers a wide range of
share-based compensation arrangements including stock options, restricted stock
plans, performance-based awards, stock appreciation rights, and employee stock
purchase plans. Statement 123R replaces FASB Statement No. 123, Accounting for
Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees. Statement 123, as originally issued in 1995,
established as preferable a fair-value-based method of accounting for
share-based payment transactions with employees. However, that statement
permitted entities the option of continuing to apply the guidance in Opinion 25,
as long as the footnotes to financial statements disclosed what net income would
have been had the preferable fair-value-based method been used. Public entities
that are small business issuers will be required to apply Statement 123R as of
the first interim or annual reporting period that begins after December 15,
2005, which, for us, will be the quarter beginning April 1, 2006. Prior to the
reverse acquisition, we did not grant any options or equity-based incentives. To
the extent that we grant such options or other equity-based incentives, the
value thereof will be included an a general and administrative expense.

      We expect that the adoption of the foregoing new statements will not have
a significant impact on our financial statements.

Results of operations

      The following table sets forth our statements of operations for the nine
months ended December 31, 2005 and 2004 and the years ended March 31, 2005 and
2004, as a percentage of revenue:

                                     - 16 -
<PAGE>

                                 Nine Months Ended         Fiscal Year Ended
                                    December 31,                March 31,
                              ----------------------    ------------ ---------
                                 2005         2004         2005         2004
                              ---------    ---------    ---------    ---------
Sales                             100.0%       100.0%       100.0%       100.0%
Cost of
sales(1)                           83.8%        88.6%        85.7%        89.2%
Gross
profit                             16.2%        11.4%        14.3%        10.8%
Selling, general and
administrative costs               10.4%        11.6%        11.7%        11.9%
Earnings before interest,           5.8%       -0.2%          2.7%       -4.7%
taxes, depreciation,
amortization and cumulative
change in accounting
principle
Interest expense (net)              6.1%         7.9%         7.8%         9.9%
Depreciation                        2.3%         2.9%         2.9%         3.6%
Cumulative effect of change           0%           0%           0%         0.5%
in accounting principle
Income taxes                          *            *            *            *
Net income                        -2.5%       -11.0%        -8.0%       -18.8%
*     Less than 0.5%

(1)   Cost of sales does not include depreciation or amortization.

Nine Months Ended December 31, 2005 and 2004

      Sales in the nine months ended December 31, 2005 (the "December 2005
period") increased $3,175,471, or 30%, to $13,713,739, compared to $10,538,268
for the nine months ended December 31, 2004 (the "December 2004 period"). This
increase reflected both an improvement in the market for our services following
a downturn in this market in response to the events of September 11, 2001 and a
continued acceptance of us as a supplier following the bankruptcy of Standard
Automotive.

      Our cost of sales for the December 2005 period increased $1,852,404, to
$11,494,666, an increase of 19%, from $9,642,262 in the December 2004 period.
This increase was significantly less than the increase in sales, resulting in an
improvement in the gross margin from 8.5% to 16.2%. The increase resulted from
more efficient operations. In the December 2004 period, we were not able to
utilize our manufacturing personnel efficiently, since we were staffed to
manufacture more products than we had orders. As a result, our direct labor, as
a percentage of sales, decreased from 23.7% to 19.7%.

      Selling, administrative and other expenses for the December 2005 period
were $1,421,605, compared to $1,220,311 for the first nine months of 2004, an
increase of $201,294, or 16%. Significant components of selling, general and
other expenses for the December 2005 period includes $1,080,085 of salaries and
related payroll taxes, $53,935 of travel and entertainment expenses and $65,445
for legal, consulting and accounting fees. The increase in selling, general and
administrative also reflected payroll costs resulting, in part, from the
employment of one of the former Ranor stockholders as our president.

      The Company's interest expense during the December 2005 period was
$840,849 compared to $841,065 for the December 2004 period.

      As a result of the foregoing, our net loss for the December 2005 period
was $347,870, as compared to a loss of $1,163,678 for the December 2004 period.

                                     - 17 -
<PAGE>

Fiscal Years Ended March 31, 2005 and 2004

      Sales for the fiscal year ended March 31, 2005 ("fiscal 2005") increased
$3,337,065, or 31%, to $14,269,982, compared to $10,932,917 for the fiscal year
ended March 31, 2004 ("fiscal 2004"). This increase, like the increase in sales
for the December 2005 period, reflected both an improvement in the market for
our services following a downturn in this market in response to the events of
September 11, 2001 and a greater acceptance of us as a supplier following the
bankruptcy of Standard Automotive.

      Our cost of sales for fiscal 2005 period increased $2,483,370, or 24%,
from $10,148,270 to $12,631,640. This increase was less than the increase in
sales, resulting in an improvement in the gross margin from 7.2% to 11.5%. The
increase resulted from more efficient operations, although we continued to have
operating inefficiencies during fiscal 2004 as a result of our level of sales.
As a result, our direct labor, as a percentage of sales, decreased from 25.71%
to 21.83%

      Selling, administrative and other expenses for fiscal 2005 were
$1,664,847, compared to $1,691,748 for fiscal 2004, a decease of $26,901, or 2
%. Significant components of selling, general and other expenses for the fiscal
2005 period include $1,203,273 of salaries and related payroll taxes, $32,748 of
travel and entertainment expenses and $169,390 for legal, consulting and
accounting fees.

      The Company's interest expense was unchanged from fiscal 2004 to fiscal
2005.

      During fiscal 2004 we had an accounting change related to the manner in
which we recognize revenue in the amount of $56,142. There was no comparable
charge in fiscal 2005.

      As a result of the foregoing, our net loss for fiscal 2005 was $1,143,800,
as compared to a loss of $2,055,304 for fiscal 2004.

Liquidity and Capital Resources

      At December 31, 2005, we had working capital of approximately $3,316,050,
including $777,950 of cash. In connection with the Ranor Agreement, we were
required to pay the former stockholders of Ranor an amount equal to our cash
position in excess of $250,000. We also paid $240,000 of the remaining cash as
part of the purchase price due to the former stockholders, which reduced our
cash balance to $10,000. The total amount paid to the former Ranor stockholders
was $1,053,000, comprised of $813,000, being the cash in excess of $250,000, and
$240,000, being a payment from the remaining cash.

      In the December 2005 period, we had negative cash flow from operations of
$363,965, which is a significant improvement from a negative cash flow from
operations of $900,595 for the year ended March 31, 2005. We attribute this
improvement to our ability to increase both our revenue and gross margin in the
December 2005 period as described under "Results of Operations." However, as a
result of the reverse acquisition, we have additional expenses, including
$200,000 pursuant to a management agreement with Techprecision, as well as
additional expenses which we will incur as a public company. Offsetting these
cost increases is the elimination of compensation that was paid to the former
stockholders of Ranor.

                                     - 18 -
<PAGE>

      In the normal course of our business, we required funds to enable us to
complete our contracts. While we generally receive a deposit, we typically use
that deposit to purchase raw materials required for the contract, and fund our
operations from working capital. Contemporaneously with the reverse acquisition,
we entered into an agreement with Sovereign Bank pursuant to which we borrowed
$4,000,000 on a term loan basis, and we obtained a $1,000,000 revolving credit
facility. We used the net proceeds from the $4,000,000 term loan to pay a
portion of our obligations to the former Ranor stockholders under the Ranor
Agreement. While we believe that the $1,000,000 revolving credit facility, which
remained unused as of March 31, 2006, and our cash flow from our operations
should be sufficient to enable us to satisfy our cash requirements at least
through the end of 2006, it is possible that we may require additional funds. We
have no commitment from any party for additional funds; however, the terms of
our agreement with Barron Partners may impair our ability to raise capital in
the equity markets.

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.

      There were no reportable events or disagreements with our independent
accounting during or subsequent to the year ended December 31, 2005.

Item 8A. Controls and Procedures.

      As of the end of the period covered by this report, our chief executive
officer and chief financial officer evaluated the effectiveness of our
disclosure controls and procedures. Based on their evaluation, the chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures are effective in alerting them to material information
that is required to be included in the reports that we file or submit under the
Securities Exchange Act of 1934 and that the information required to be
disclosed in the reports that we file or submit under the Securities Exchange
Act of 1934 is accumulated and communicated to our management, including our
chief executive officer and chief financial officer, to allow timely decisions
regarding required disclosure.

      Our principal executive officer and principal financial officer have
concluded that there were no significant changes in our internal controls or in
other factors that could significantly affect these controls during the fourth
quarter ended December 31, 2005.


Item 8B.  Other Information.


      Not Applicable


                                    PART III


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

                                     - 19 -
<PAGE>

Directors and Executive Officers

       Name        Age       Position
James G. Reindl    47        Chairman and chief executive officer
Mary Desmond       42        Chief financial officer and secretary
Stanley A. Youtt   59        Director; president and chief executive
                             officer of Ranor
Michael Holly(1)   59        Director
Larry              54        Director
Steinbrueck(1)
Louis A.           47        Director
Winoski(1)
(1)   Member of the audit and compensation committees.

      James G. Reindl has been a director, chairman and chief executive officer
since February 2006. Mr. Reindl is 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. Techprecision, LLC has a management agreement with us, and Mr. Reindl
devotes substantially all of his business time and attention to our business.
From February 1999 until February 2002, Mr. Reindl was president and chief
executive officer of Critical Components Corporation, an aerospace subsidiary of
Standard Automotive Corporation. During that period, Ranor was a wholly-owned
subsidiary of Critical Components. 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 Holly has been a director since February 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 Steinbrueck has been a director since February 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 February 2006. Since August
2005, Mr. Winoski has been a consultant to Garner CAD Technic GmbH, an aerospace
engineering and design services company. From August 2004 to August 2005, Mr.
Winoski was managing director, chairman of the board and member of the holding
company board for RSM Fabrications Ltd., a fabricator of aerospace products.
From March 2002 until July 2004, Mr. Winoski was a consultant and director of
global marketing for PFW GmbH, a producer of components for commercial aircraft.
From December 1999 to February 2002, Mr. Winoski was president and chief
executive officer of Tubetronics Inc., a producer of spare parts for Boeing
commercial aircraft and other aerospace products. Mr. Winoski is also 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.

                                     - 20 -
<PAGE>

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.

Code of Ethics

      Our board of directors has adopted a code of business conduct and ethics
for its officers and employees, a copy of which is filed as an exhibit to this
annual report.

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. To our
knowledge, during the calendar year ended December 31, 2005, the Forms 3 filed
on September 29, 2005 by Capital Markets Advisory Group and on September 26,
2005 by Allen Mark were filed late.

Item 10. Executive Compensation.

                           SUMMARY COMPENSATION TABLE

      Prior to the reverse merger, we did not pay any compensation to any
executive officers. Set forth below is information for the fiscal year ended
March 31, 2005 for Ranor's chief executive officer and for our other executive
officers whose salary for the fiscal year was at least $100,000.

                                                  Other
Name and Position           Year    Salary    Compensation
-------------------------   ----   --------   ------------
Stanley A. Youtt, chief     2005   $198,016            -0-
executive officer
Jeffrey Lippincott,         2005    150,000            -0-
Secretary
Daniel Justicz, Treasurer   2005    150,000            -0-

      Mr. Lippincott and Mr. Justicz are former stockholders of Ranor and are no
longer employed by us.

Employment Agreement

      In February 2006, 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.

                                     - 21 -
<PAGE>

Management Agreement

      Pursuant to a management agreement with Techprecision LLC, we engaged
Techprecision LLC to manage our business through March 31, 2009. The agreement
provides that we pay Techprecision LLC an annual management fee of $200,000 and
a performance bonus based on criteria determined by the compensation committee.
Mr. James G. Reindl is president and Mr. Andrew A. Levy is chairman of
Techprecision LLC, and they and Martin M. Daube are the members of Techprecision
LLC. The agreement provides that Techprecision LLC will provide the services of
Mr. Reindl at chairman, Mr. Levy for marketing support and analysis of long-term
contracts and Mr. Daube for marketing support. None of the members of
Techprecision LLC receive any additional compensation from us.

2006 Long-Term Incentive Plan

      In February 2006, we adopted, subject to stockholder approval, 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 which is to be an independent
directors. In the absence of a committee, the plan is administered by the board
of directors. Independent directors are not eligible for discretionary options.
However, each newly elected independent director receives 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. 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, 2007. Pursuant to this plan, we
granted incentive stock options to our three independent directors - Michael
Holly, Larry Steinbrueck and Louis Winoski. The options are subject to
stockholder approval of the 2006 Plan.

      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 upon 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 a non-qualified option, the option holders
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 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.

                                     - 22 -
<PAGE>

      No options were outstanding at December 31, 2005.

      We also have reserved 133,000 shares of common stock for issuance to key
managerial employees as restricted stock grants.


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 April 10, 2006 by:

      o     each director;

      o     each officer named in the summary compensation table;

      o     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

      o     all directors and executive officers as a group.

                               Shares of Common
                             Stock Beneficially
Name                                       Owned        Percentage
----                         -------------------        ----------
James G. Reindl                        2,945,300              29.6%
One Bella Drive
Westminster, MA 01473

Andrew A. Levy                         2,925,300              29.3%
46 Baldwin Farms North
Greenwich, CT 06831

Howard Weingrow                        1,850,000              18.6%
805 Third Avenue
New York, NY 10022

Stanoff Corporation                    1,700,000              17.1%
805 Third Avenue
New York, NY 10022

Stanley A. Youtt                         796,000               8.0%
One Bella Drive
Westminster, MA 01473

Martin M. Daube                          671,400               6.7%
20 West 64th Street
New York, NY 10023

                                     - 23 -
<PAGE>

Larry Steinbrueck                        204,000               2.0%

Michael Holly                             85,000                  *

Louis A. Winoski                             -0-                -0-

All officers and directors             4,040,300              40.5%
as a group
(five individuals owning stock)

*     Less than 1%

      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 April 10, 2006.

      The shares owned by Andrew A. Levy represent 2,675,300 shares of common
stock owned by him and 250,000 shares of common stock owned by Redstone Capital
Corporation, of which Mr. Levy is president and he and his wife are the sole
stockholders.

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

      Stanley A. Youtt has an agreement with Mr. Levy, Mr. Reindl and Mr. Daube
pursuant to which they will transfer to Mr. Youtt an aggregate of 796,000 shares
of common stock in the event that we do not make an acquisition meeting certain
agreed-upon criteria within one year from February 24, 2006, the date we
acquired Ranor.

      Barron Partners owns shares of series A preferred stock and warrants
which, if fully converted or exercised, would result in ownership of more than
5% 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.
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.

      On February 24, 2006, we acquired the stock of Ranor pursuant to a stock
purchase agreement dated as of August 17, 2005 among Ranor Acquisition LLC,
Ranor and its stockholders. In connection with the acquisition of Ranor pursuant
to the Ranor Agreement:

      o     We entered into a preferred stock purchase agreement with Barron
            Partners, pursuant to which Barron Partners invested $2,200,000 for
            which we issued 7,719,250 shares of a newly-created series of
            preferred stock, designated as the series A preferred stock, and
            warrants to purchase an aggregate of 11,220,000 shares of common
            stock. The series A preferred stock is convertible into 7,719,250
            shares of common stock, subject to adjustment.

                                     - 24 -
<PAGE>

      o     We purchased 928,000 shares of common stock from Capital Markets
            Advisory Group, which was then our principal stockholder, for
            $200,000, using the proceeds from the sale of the series A preferred
            stock and warrants.

      o     Pursuant to an agreement with Ranor Acquisition and its members,
            Ranor Acquisition assigned its obligations under the Ranor Agreement
            to us and we assumed the obligations of Ranor Acquisition under the
            Ranor Agreement and we issued 7,997,000 shares of common stock to
            the following stockholders.

             Name                    No. Shares
             -----                   ----------
             James G. Reindl          3,095,300
             Andrew A. Levy           2,825,300
             Redstone Capital           250,000
             Corporation
             Stanley Youtt              796,000
             Martin Daube               741,400
             Larry Steinbrueck          204,000
            Michael Holly               85,000
            Total

      Mr. Levy is president of Redstone Capital Corporation and the stock of
Redstone is owned by Mr. Levy and his wife.

      o     We sold 1,700,000 shares of common stock to Stanoff Corporation for
            $500,000.

      o     Ranor entered into a loan and security agreement with Sovereign Bank
            pursuant to which Ranor borrowed $4.0 million, for which Ranor
            issued its term note, and Sovereign provided Ranor with a $1.0
            million revolving credit arrangement. As of the date of this annual
            report, the revolving credit arrangement was unused.

      o     Ranor entered into a management agreement with Techprecision LLC,
            pursuant to which Techprecision LLC would provide management
            services to Ranor.

      o     Ranor sold the real property on which its facilities are located to
            WM Realty Management for $3.0 million. WM Realty Management is a
            special purpose entity which was created in order to acquire the
            real estate. WM Realty Management is beneficially owned by Newvision
            Westminster LLC, of which Andrew A. Levy, a principal stockholder
            and a member of Techprecision, is the manager and a 69% beneficial
            owner. Mr. James G. Reindl, our chairman, chief executive officer
            and a director, is a 10% beneficial owner of Newvision. Larry
            Steinbrueck and Michael Holly, who are directors, are beneficial
            owners of 1.2% and 0.5%, respectively, of Newvision. Other principal
            stockholders who are members of Newvision are Stanoff Corporation
            (10%) and Martin Daube (7.8%). The property that we sold includes
            the real estate on which our facilities are located and three
            potential residential lots, which are presently vacant. We lease the
            real estate on which our facilities are located (and not the
            potential residential lots) pursuant to a triple net lease at an
            current annual rental of $438,000, subject to escalation. See "Item
            2. Description of Property" for information relating to this lease.
            Although we believe that the terms of the sale and the lease are
            fair to us, the purchase price is less than the appraised value of
            the property and the terms of neither the sale nor the lease were
            negotiated at arms length. The purchase price was based largely upon
            the maximum amount that WM Realty Management could borrow and
            reflected the fact that the use of the real estate as a
            manufacturing facility would not be considered the best use of the
            property.

                                     - 25 -
<PAGE>

      In connection with the mortgage on the real estate, Mr. Levy and Mr.
Reindl gave the mortgagee their personal limited guarantee and an environmental
guaranty. The limited guaranty is triggered by certain defaults by WM Realty
Management under its mortgage.

      In connection with the mortgage, we paid certain of WM Realty Management's
costs and expenses of approximately $80,000, which amount is payable by WM
Realty Management within three years.

      Prior to the completion of the reverse acquisition, Techprecision LLC
advanced us $120,000 for expenses relating to the reverse acquisition. These
expenses were paid in February 2006.

      Mr. Stanley A. Youtt was a common stockholder of Ranor. Pursuant to the
Ranor Agreement, he, along with the other former Ranor stockholders, sold his
Ranor stock to us. Since the consideration paid was used to pay debt and the
preference on the preferred stockholders, the total amount paid to Mr. Youtt was
$700.

Item 13. Exhibits.

      2.1  Stock purchase agreement(1)
      3.1  Certificate of incorporation(2)
      3.2  By-laws(2)
      3.3  Certificate of Designation for the Series A Convertible
           Preferred Stock(1)
      4.1  Loan and security agreement dated February 24, 2006, between
           Ranor and Sovereign Bank(1)
      4.2  Guaranty from the Registrant to Sovereign Bank(1)
      4.3  Form of warrant issued to Barron Partners LP(1)
     10.1  Preferred stock purchase agreement dated February 24, 2006, between
           the Registrant and Barron Partners, LP(1)
     10.2  Registration rights agreement dated February 24, 2006, between
           the Registrant and Barron Partners LP(1)
     10.3  Agreement dated February 24, 2006, among the Registrant, Ranor
           Acquisition LLC and the members of Ranor Acquisition LLC(1)
     10.4  Subscription Agreement dated February 24, 2006(1)
     10.5  Registration rights provisions pursuant to the agreements
           listed in Exhibits 10.3 and 10.4(1)
     10.6  Employment agreement between the Registrant and Stanley
           Youtt(1)
     10.7  Management agreement dated February 24, 2006, between Ranor
           and Techprecision LLC(1)
     10.8  Lease, dated February 24, 2006 between WM Realty Management,
           LLC and Ranor(1)
     10.9  2006 Long-term incentive plan(1)
     14.1  Code of  business conduct and ethics(3)
     21.1  List of Subsidiaries(3)

                                     - 26 -
<PAGE>

     31.1  Certification of chief executive officer pursuant to Section
           302 of the Sarbanes-Oxley Act of 2002
     31.2  Certification of chief financial officer pursuant to Section
           302 of the Sarbanes-Oxley Act of 2002
     32.1  Certification of chief executive officer and chief financial officer
           pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)   Filed as an exhibit to the Company's current report on Form 8-K which was
      filed with the Commission on March 3, 2006, and incorporated herein 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)   Previously filed.

Item 14. Principal Accountant Fees and Services.

      The following lists fees paid to Marcum & Kliegman, LLP ("MK"), our former
independent public accounting firm, during the year ended December 31, 2005:

                          From February 10, 2005 (inception)
                          through December 31, 2005
                          -------------------------

Audit Fees                         $12,500(1)
Audit Related Fees                 None
Tax Fees                           None
All Other Fees                     None


(1) Fees billed in connection with MK's audit of the financial statement from
February 10, 2005 to April 30, 2005 for the purpose of the registration
statement on Form 10-SB filed on June 23, 2005 and MK's review of our interim
financial statements for the quarters ended June 30, 2005 and September 30,
2005.

      We engaged Bloom & Co., LLP ("Bloom") as our independent certified public
accounting firm on March 7, 2006. Bloom was the independent certified public
accounting firm for Ranor and audited its financial statements at March 31, 2005
and for the two years in the period then ending. We did not pay any audit fees
to Bloom in during 2005. The following lists fees paid to Bloom during 2006,
through March 31, 2006:

Audit Fees                 $35,039
Audit Related Fees         None
Tax Fees                   None
All Other Fees             None

      Prior to our acquisition of Ranor, neither we nor Ranor had an audit
committee. We appointed an audit committee in February 2006, following the
acquisition of Ranor. It is the policy of the audit committee to review the
nature of the non-audit work and approve such services in advance. In making its
review the audit committee determine whether, in its opinion, the performance of
such services does not impair the independence of our independent public
accounting firm.

                                     - 27 -
<PAGE>

                                   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:  September 13, 2006                /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.

Signature                  Title                              Date

 /s/James G. Reindl*       Chairman of the board, chief       September 13, 2006
----------------------     executive officer and director
    James G. Reindl        (Principal Executive Officer)

 /s/Mary Desmond*          Chief financial officer            September 13, 2006
----------------------     (Principal Financial and
    Mary Desmond           Accounting Officer)

 /s/Stanley A. Youtt*      Director                           September 13, 2006
----------------------
    Stanley A. Youtt

                           Director                           September __, 2006
----------------------
    Michael Holly

 /s/Larry Steinbrueck*     Director                           September 13, 2006
----------------------
    Larry Steinbrueck

                           Director                           September __, 2006
----------------------
    Louis A. Winoski


*By /s/ James G. Reindl
    ------------------------                                  September 13, 2006
    James G. Reindl
    Attorney-in-Fact


                                     - 28 -
<PAGE>

                            TECHPRECISION CORPORATION
                               (formerly known as)
                          LOUNSBERRY HOLDINGS II, INC.

                                     -INDEX-


                                                                       Page(s)

Item 1.  Independent Auditors' Report                                        3

         Financial Statements

         Balance Sheet at December 31, 2005                                  4

         Statements of Operations for the Period from February
         10, 2005 (Inception) to December 31, 2005                           5

         Statement of Changes in Stockholders' Deficiency for
         the Period from February 10, 2005 (Inception) to
         December 31, 2005                                                   6

         Statement of Cash Flows for the Period from February
         10, 2005 (Inception) to December 31, 2005                           7

         Notes to Financial Statements                                    8-15



                                      F-1
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                   <C>
BLOOM & CO., LLP 50 CLINTON STREET. HEMPSTEAD. NEW YORK 11550:                         TEL: 516 - 486-5900
CERTIFIED PUBLIC ACCOUNTANTS                                                           FAX: 516 - 486-5476

STEVEN BLOOM, CPA                                                                  MEMBER OF AMERICAN
FREDERICK PAUKER, CPA                                                                 INSTITUTE OF
SIROUSSE TABRIZTCHI, Ph.D. CPA                                                      CERTIFIED PUBLIC
                                                                                       ACCOUNTANTS
</TABLE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
and Shareholders of
Techprecision Corporation

We have audited the balance sheet of Techprecision Corporation (previously known
as Lounsberry  Holdings II, Inc.), a development  stage company,  as of December
31, 2005 and the related  statements of income,  accumulated  deficit,  and cash
flows for the year ended  December  31,  2005 and the period from  inception  on
February 10, 2005 to December  31,  2005.  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 the 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 also includes examining,
on a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in the
financial  statements,  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  financial  position of  Techprecision  Corporation
(previously  known as Lounsberry  Holdings,  II) as of December 31, 2005 and the
results  of its  operations  and its  cash  flows  for the  year  then  ended in
conformity with accounting principles generally accepted in the United States of
America.


/s/Bloom and Company LLP
Hempstead, New York
April 17, 2006, except for Note 6 as to which the date is September 14, 2006.



                                      F-2
<PAGE>


                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                DECEMBER 31, 2005

<TABLE>
<CAPTION>

                                     ASSETS

<S>                                                                             <C>
Cash                                                                            $  2,000
                                                                                --------

TOTAL ASSETS                                                                    $  2,000
                                                                                ========


                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

LOAN PAYABLE - RELATED PARTY                                                    $ 39,661
                                                                                --------

TOTAL LIABILITIES                                                                 39,661

STOCKHOLDERS' DEFICIENCY
Preferred stock, $.0001 par value; 10,000,000 shares authorized, -0- issued           --
Common stock, $.0001 par value; 90,000,000 shares authorized; 1,020,000
 issued and outstanding                                                              102
Additional paid in capital                                                         2,000
Deficit accumulated during the development stage                                 (39,763)
                                                                                --------

TOTAL STOCKHOLDERS'DEFICIENCY                                                    (32,398)
                                                                                --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                  $  2,000
                                                                                ========
</TABLE>

See notes to financial statements.

                                      F-3
<PAGE>


                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
     FOR THE PERIOD FROM FEBRUARY 10, 2005 (INCEPTION) TO DECEMBER 31, 2005


FORMATION COSTS                                         $    39,763
                                                        -----------

NET LOSS                                                $   (39,763)
                                                        ===========

WEIGHTED AVERAGE SHARES OUTSTANDING                       1,020,000
                                                        ===========

BASIC AND DILUTED NET LOSS PER SHARE                    $     (0.04)
                                                        ===========


See notes to financial statements.

                                      F-4
<PAGE>


                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          (A DEVELOPMENT STAGE COMPANY)
                STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
     FOR THE PERIOD FROM FEBRUARY 10, 2005 (INCEPTION) TO DECEMBER 31, 2005

<TABLE>
<CAPTION>
                                                                            Deficit
                                                                          Accumulated
                                                                           During the      Total
                                                   Common stock           Development   Stockholders'
                                               Shares         Amount         Stage        Deficiency
                                              -------------------------------------------------------
<S>                                          <C>           <C>           <C>            <C>
Common shares issued at February 10, 2005
 at $0.0001 per share                         1,020,000     $     102     $      --      $     102

Net loss                                             --            --       (39,763)       (39,763)
                                              ---------     ---------     ---------      ---------

Balance at December 31, 2005                  1,020,000     $     102     $ (39,763)     $ (39,763)
                                              =========     =========     =========      =========
</TABLE>

See notes to financial statements.

                                      F-5
<PAGE>


                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS
     FOR THE PERIOD FROM FEBRUARY 10, 2005 (INCEPTION) TO DECEMBER 31, 2005



CASH FLOWS FROM OPERATING ACTIVITIES

Net loss                                                     $(39,763)
                                                             ---------

NET CASH USED IN OPERATING ACTIVITIES                         (39,763)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of common stock                          2,102
Proceeds from related party                                    39,661
                                                             ---------

NET CASH PROVIDED BY FINANCING ACTIVITIES                      41,763
                                                             ---------
NET INCREASE (DECREASE) IN CASH                                 2,000

CASH AT BEGINNING OF PERIOD                                        --
                                                             ---------

CASH AT END OF PERIOD                                        $  2,000
                                                             ========


See notes to financial statements.

                                      F-6
<PAGE>


                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - Organization, Business and Operations

Lounsberry  Holdings II, Inc. (the  "Company") was  incorporated  in Delaware on
February  10,  2005,  with the  objective  of  acquiring,  or merging  with,  an
operating business.

At December 31, 2005,  the Company had not yet  commenced  any  operations.  All
activity  through  December 31, 2005  relates to the  Company's  formation.  The
Company selected December 31 as its fiscal year end.

The  Company,  until its merger with Ranor,  Inc. in February  2006 was a "blank
check" company. The Securities and Exchange Commission defines such a company as
"a  development  stage company that has no specific  business plan or purpose or
has indicated its business plan is to engage in a merger or acquisition  with an
unidentified  company or  companies,  other  entity,  or person," and is issuing
"penny stock," as defined in Rule 3a-51-1 under the  Securities  Exchange Act of
1934. Many states have enacted statutes, rules and regulations limiting the sale
of  securities  of "blank check"  companies in their  respective  jurisdictions.
Management did not intend to undertake any efforts to cause a market to develop
in its securities, either debt or equity, until the Company concluded a business
combination.

The Company was organized as a vehicle to investigate and, if such investigation
warrants,  acquire a target company or business seeking the perceived advantages
of being a publicly held  corporation  and, to a lesser extent,  that desires to
employ the Company's  funds in its business.  The Company's  principal  business
objective  for the first 12 months was to  achieve  long-term  growth  potential
through a combination with a business rather than immediate, short-term earnings
("Business  Combination").  The Company did not restrict its potential candidate
target companies to any specific  business,  industry or geographical  location.
The  analysis  of new  business  opportunities  was  undertaken  by or under the
supervision of the officers and directors of the Company.

Until a Business Combination was completed,  an affiliate of one of the Founding
Stockholders agreed to fund the Company's operating costs through the earlier of
a Business  Combination  or December 31, 2006.  There was no assurance  that the
Company  would be able to  successfully  complete  a  Business  Combination.  On
February 24, 2006 a business combination was entered into. (See Note 6)

NOTE 2 - Summary of Significant Accounting Policies

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial statements and reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.

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 $2,000 as of
December 31, 2005.

                                      F-7
<PAGE>


                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - Summary of Significant Accounting Policies (continued)

Net Earnings Per Share

Basic and diluted net loss per share is computed by dividing the net loss by the
weighted average number of shares of common stock outstanding during the period.

NOTE 3 - Loan Payable - Related Party

We received two loans in the amounts of $27,161 and $12,500 respectively from an
affiliate  of one of the  Founding  Stockholders.  These loans are  non-interest
bearing and are payable on the earlier of May 31, 2006 or the  consummation of a
Business Combination.  On February 24, 2006, the date of the reverse merger, the
loans were forgiven/

NOTE 4 - Preferred Stock

We are  authorized  to issue  10,000,000  shares of  preferred  stock  with such
designations,  voting and other rights and preferences as may be determined from
time to time by the Board of Directors.  No shares of preferred  stock have been
issued as of December 31, 2005.

NOTE 5 - New Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151 "Inventory Costs, an amendment of
Accounting  Research Bulletin ("ARB") No. 43, Chapter 4." The amendments made by
Statement 151 clarify that, abnormal amounts of idle facility expense,  freight,
handling  costs  and  wasted  materials   (spoilage)  should  be  recognized  as
current-period  charges and require the allocation of fixed production overheads
to inventory  based on the normal  capacity of the  production  facilities.  The
guidance is  effective  for  inventory  costs  incurred  during the fiscal years
beginning after June 15, 2005.

In  December  2004,  The FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions"  ("SFAS  153").  The  amendments  made by SFAS 153 as based on the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair value of the assets exchanged. Further, the amendments eliminate the narrow
exception for nonmonetary  exchanges of similar productive assets and replace it
with a broader  exception for exchanges of  nonmonetary  assets that do not have
commercial substance. Previously, Opinion 29 required that the accounting for an
exchange of a productive  asset  should be based on the  recorded  amount of the
asset  relinquished.   Opinion  29  provided  for  an  exception  to  its  basic
measurement  principle (fair value) for exchanges of similar  productive assets.
The Board  believes that  exception  required that some  nonmonetary  exchanges,
although  commercially  substantive,  be  recorded  on a carry  over  basis.  By
focusing the exception on exchanges that lack  commercial  substance,  the Board
believes  this  Statement  produces  financial  reporting  that more  faithfully
represents  the  economics of the  transaction.  The  Statement is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. Earlier application is permitted for nonmonetary asset exchanges occurring
in fiscal periods  beginning  after the date of issuance.  The provision of this
statement shall be applied prospectively.

In December  2004,  the FASB issued SFAS  No.123  (revised  2004),  "Share-Based
Payment."  Statement  123R will provide  investors  and other users of financial
statements  with more  complete  financial  information  by  requiring  that the
compensation cost relating to share-based payment  transactions be recognized in
financial statements.  That cost will be measured based on the fair value of the
equity or liability  instruments  issued.  Statement 123R covers a wide range of
share-based compensation arrangements including stock options,  restricted stock
plans,  performance-based  awards, stock appreciation rights, and employee stock
purchase plans.  Statement 123R replaces FASB Statement No. 123,  Accounting for
Stock-Based  Compensation,  and  supersedes  APB Opinion No. 25,  Accounting for
Stock  Issued  to  Employees.  Statement  123,  as  originally  issued  in 1995,
established   as  preferable  a   fair-value-based   method  of  accounting  for
share-based  payment  transactions  with  employees.   However,  that  statement
permitted entities the option of continuing to apply the guidance in Opinion 25,
as long as the footnotes to financial statements disclosed what net income would
have been had the preferable  fair-value-based method been used. Public entities
that are small business  issuers will be required to apply  Statement 123R as of
the first  interim or annual  reporting  period that begins  after  December 15,
2005,  which, for us, will be the quarter  beginning April 1, 2006. Prior to the
reverse acquisition, we did not grant any options or equity-based incentives. To
the extent  that we grant such  options or other  equity-based  incentives,  the
value thereof will be included an a general and administrative expense.

We expect that the  adoption of the  foregoing  new  statements  will not have a
significant impact on our financial statements.

NOTE 6 - Subsequent Events

On February 24, 2006,  the Company  purchased all of the capital stock of Ranor,
Inc., a Delaware corporation  ("Ranor"),  pursuant to a stock purchase agreement
dated August 17, 2005 (the "Agreement").  The Agreement provided that Ranor will
pay all outstanding  notes,  which were held by the holders of Ranor's preferred
stock, and purchase the outstanding capital stock and warrants. The note holders
received  cash of $8 million plus  accrued  interest of $975,500 as full payment
for their notes. The preferred stockholders received $6,500 as payment for their
shares and the common shareholders received $3,500 for their shares. The Company
paid  $925,000  into  escrow as  security  for any  liability  that the  selling
stockholders  may have as a result  of any  breach  of the  representations  and
warranties contained in the agreement.

A former stockholder of Lounsberry received $200,000 for 928,000 of his shares.

In order to finance its recapitalization,  Ranor, Inc. sold its real property in
a sale leaseback transaction for $3 million to WM Realty Management,  LLC, which
is a special purpose entity and an affiliate of the Company,  and entered into a
secured credit agreement with a bank, on which it borrowed  $4,000,000,  we sold
convertible  preferred shares and warrants for $2.2 million and common stock for
$500,000. Total cash raised from financed was $9.2 million. The balance of funds
required was paid by Ranor in accordance with the provisions of the Agreement.

Contemporaneously  with the purchase of the Ranor stock,  the Company  purchased
928,000  shares of its common  stock from a principal  stockholder.  Such shares
have been cancelled.

The proforma  unaudited  consolidated  Balance Sheet and Statement of Operations
and proforma  earnings per share shown on the  statement of  operations  for the
most recent interim  period give effect  acquisition of Ranor as of February 28,
2006,  which was four days  after the  closing  of the  acquisition  and for the
eleven months ended February 28, 2006 and 2005.

                                      F-8
<PAGE>


                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6 - Subsequent Events (continued)

The actual and proforma financial statement information and notes should be read
in conjunction with and are qualified by the historical financial statements and
notes  thereto  of the  Company  and Ranor  Inc.  Historical  profoma  financial
statements are included in the 8K filing by Tech on March 3, 2006.



                            TECHPRECISION CORPORATION
                       PROFORMA CONSOLIDATED BALANCE SHEET
                             AS OF FEBURARY 28, 2006
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                         WM             Proforma
                                     Ranor         Techprecision        Realty         Adjustments         Consolidated
                                  ------------      ------------     ------------     ------------         ------------
<S>                               <C>               <C>              <C>              <C>                  <C>
Assets
Current Assets
   Cash and equivalents           $    429,505      $      2,000                                           $    431,505
   Accounts Receivable               2,515,552                                                                2,515,552
   Prepaid Expenses                    133,958                            235,961                               369,919
   Inventory                         1,942,815                                                                1,942,815
                                  ------------      ------------     ------------     ------------         ------------

       Total Current Assets          5,021,830             2,000          235,961                             5,259,791

Property, Plant and Equipment
Land                                                                              (1)      110,112              110,112
Building                                                                          (1)    1,282,119            1,282,119
Machinery and Equipment              2,593,224                                                                2,593,224
Land - Building                                                         3,000,000 (1)   (3,000,000)
Less:  Accumulated                                                                (1)
Depreciation                        (1,272,915)                                           (142,863)          (1,415,778)
                                  ------------      ------------     ------------     ------------         ------------

Property, Plant
     and Equipment, Net              1,320,309                          3,000,000       (1,750,632)           2,569,677

Other Assets Escrow                                      930,000           25,000                               955,000
Advance WM Realty                                        226,808                          (226,808)
Deferred Charges                        46,684                            265,847                               312,531
Investment- Ranor                                         10,000                  (2)      (10,000)
Due from Ranor                                           813,553                  (3)     (813,553)
                                  ------------      ------------     ------------     ------------         ------------

Total Assets                      $  6,388,823      $  1,982,361     $  3,526,808     $ (2,800,993)        $  9,096,999
                                  ============      ============     ============     ============         ============
</TABLE>


                                       F-9
<PAGE>

                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6 - Subsequent Events (continued)

                            TECHPRECISION CORPORATION
                       PROFORMA CONSOLIDATED BALANCE SHEET
                             AS OF FEBURARY 28, 2006
                                   (unaudited)
                                   (continued)

<TABLE>
<CAPTION>
                                                                     WM               Proforma
                                   Ranor        Techprecision      Realty            Adjustments     Consolidated
                                -----------      -----------     -----------         -----------      -----------
<S>                             <C>              <C>             <C>                 <C>              <C>

Liabilities and
  Stockholders' Equity

Current Liabilities
     Accounts Payable               807,368                                                               807,368
     Accrued Expenses               602,424                                                               602,424
     Due To/From Parent             813,553                                      3      (813,553)
     Current Maturities of
        Long Term Debt              576,934                                                               576,934
     Mortgage Payable                                              3,300,000                            3,300,000
                                -----------      -----------     -----------         -----------      -----------

         Total Current            2,800,279                        3,300,000            (813,553)       5,286,726
             Liabilities

Notes Payable-Bank                3,428,572                                                             3,428,572
Chattel Mortgage Payable             14,366                                                                14,366
Advance Techprecision                                                226,808            (226,808)
                                -----------      -----------     -----------         -----------      -----------
       Total
       Long-Term
       Liabilities                3,442,938                          226,808            (226,808)       3,442,938

      Minority Interest                                                          2             1                1
Stockholders' Equity
      Preferred Stock                     0        2,150,000                                            2,150,000
      Common Stock-Ranor                350                                      2          (350)               0
      Common Stock-
      Techprecision                                      996                                                  996
      Paid in capital             2,000,000         (128,872)                3,2,1       (49,414)       1,821,714
      Deficit                    (1,854,744)         (39,763)                  1,3    (1,710,869)      (3,605,376)
                                -----------      -----------     -----------         -----------      -----------

      Total Stockholders'
       Equity                       145,606        1,982,361                          (1,760,632)         367,335
                                -----------      -----------     -----------         -----------      -----------

      Total Liabilities and     $ 6,388,823      $ 1,982,361     $ 3,526,808         $(2,800,993)     $ 9,096,999
                                ===========      ===========     ===========         ===========      ===========
</TABLE>


                                      F-10
<PAGE>



                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6 - Subsequent Events (continued)

(1) A proforma  adjustment has been made to consolidate WM Realty Management,  a
special  purpose  entity set up by  affiliates  of the Company to hold title and
obtain a $3.3 million  mortgage on the  buildings  and  property of Ranor,.  The
entry  re-establishes  the assets on the books of the Company and eliminates the
profit Ranor recognized on the sale of the property.

(2) Tech  purchased  the shares of the  former  shareholders  of Ranor,  Inc for
$10,000.  The transaction was considered a reverse acquisition and was accounted
for  accordingly.  The common stock on the books of Ranor was $350,  outstanding
shares of Ranor were 350,000. Ranor cancelled all but 1,000 shares.

(3) In the  accounting  for a reverse  merger the  non-operating  or  purchasing
company's  deficit is charged against its additional  paid in capital,  with the
result that acquired company's (Ranor's) deficit is carried forward.


                                      F-11
<PAGE>

                            Techprecision Corporation
                      Comparative Proforma Income Statement
          For the Eleven Month Periods Ended February 28, 2006 and 2005
                        And Pro Forma Earnings Per Share
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                     Proforma Adjustments
                                2006              2005              2006              2005              2006              2005
                            ------------      ------------      ------------      ------------      ------------      ------------
<S>                         <C>               <C>               <C>               <C>               <C>               <C>
Net Sales                   $ 17,800,607      $ 12,865,901                                          $ 17,800,607      $ 12,865,901
Cost of  Sales                14,756,529        11,015,994                                            14,756,529        11,015,994
                            ------------      ------------      ------------      ------------      ------------      ------------

Gross Profit                   3,044,078         1,849,907                                             3,044,078         1,849,907

Selling, General and           1,739,673         1,512,657                                             1,739,673         1,512,657
Admin Exp
Depreciation Expense             375,876           374,448                                               375,876           374,448
                            ------------      ------------      ------------      ------------      ------------      ------------
                               2,115,549         1,887,105                                             2,115,549         1,887,105

Operating Income                 928,529           (37,198)                                              928,529           (37,198)

Other Income & Expenses

Interest Expense              (1,027,718)       (1,027,945) 1        356,351           363,996          (671,367)         (663,949)
Interest Earned                    9,998            15,315                                                 9,998            15,315
Other Income/(expense)         1,736,359            (7,876) 2     (1,750,632)                            (14,273)           (7,876)
                            ------------      ------------      ------------      ------------      ------------      ------------

Net Other Income &
Expense                          718,639        (1,020,506)       (1,394,281)          363,996          (675,642)         (656,510)
                            ------------      ------------      ------------      ------------      ------------      ------------

Income before income        $  1,647,168      $ (1,057,704)     $ (1,394,281)     $    363,996      $    252,887      $   (693,708)
taxes
</TABLE>

                                      F-12
<PAGE>

                            TECHPRECISION CORPORATION
                (formerly known as LOUNSBERRY HOLDINGS II, INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6 - Subsequent Events (continued)

                            Techprecision Corporation
                      Comparative Proforma Income Statement
                        And Pro Forma Earnings Per Share
                                   (unaudited)
                                   (continued)

<TABLE>
<CAPTION>
<S>                      <C>              <C>              <C>              <C>              <C>             <C>
Income before income
taxes                    $ 1,647,168      $(1,057,704)     $(1,394,281)     $   363,996      $   252,887     $  (693,708)

Federal and State
Income Tax                  (750,000)                 (6)      663,000                           (87,000)

(Benefit) Provision
for Income Tax               740,000                          (653,000)                           87,000
                         -----------      -----------      -----------      -----------      -----------     -----------

Net Income               $ 1,637,168      $(1,057,704)     $(1,384,281)     $   363,996      $   242,887     ($  693,708)
                         ===========      ===========      ===========      ===========      ===========     ===========

Net (loss) per                                        (5)
share
    Basic and            $      0.17            (0.11)                                       $      0.00           (0.11)
    Diluted
Shares used in per
share calculation
    Basic and              9,959,000        9,959,000 (3),(5)                                  9,959,000       9,959,000
    Diluted
</TABLE>

(1) A  proforma  adjustment  has  been  made to the  interest  expense  removing
interest  on $8  million  at 14% (the Ranor  notes)  and  replacing  it with the
interest on $3.3 million at 11.25% and $4 million at 9%. The adjustment was made
as though the  transaction  had taken place on April 1, 2004.  The  beginning of
Ranors' fiscal year.

(2) A proforma  adjustment has been made to consolidate WM Realty Management,  a
special  purpose  entity set up by  affiliates  of the Company to hold title and
obtain a $3.3 million  mortgage on the  buildings  and  property of Ranor,.  The
entry  re-establishes  the assets on the books of the Company and eliminates the
profit Ranor recognized on the sale of the property.

(3) Basic shares  outstanding are the shares  outstanding for  Techprecision  on
February 28, 2006,  four days after the  transaction  took place and need not be
adjusted.

(4) None of the options  outstanding have exercise prices that are less than the
market value of the shares and  therefore  the exercise of the options  would be
anti-dilutive.

(5) No  consideration  was given to warrants to purchase 11.22 million shares of
common  stock  because the warrant  exercise  price was greater than the average
price of other shares purchased for cash.

(6) Adjust  income  taxes for the  elimination  of the profit on the sale of the
realty to the affiliate WM Realty Management LLC.

(7)  Restatement  - The  Company had  recorded  the number of shares used in per
share calculation for 2005 as 9,959,000; the number was corrected to 8,089,000.


                                      F-13

<PAGE>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
and Stockholders of
Ranor, Inc.

We have audited the accompanying balance sheets of Ranor, Inc. as of March 31,
2005 and 2004, and the related statements of operations, stockholders' equity,
and cash flows for the years then ended. 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). These 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. We conducted our audit in accordance with the 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. The Company
has determined that it is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. 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 financial position of Ranor, Inc. as of March 31,
2005 and 2004, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.


Bloom & Co., LLP
Hempstead, NY
February 14, 2006, except for Note 1 as to which the date is September 14, 2006.




                                      F-14
<PAGE>

                                   RANOR, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                     ASSETS

                                                                         DECEMBER 31,             MARCH 31,
                                                                             2005           2005              2004
                                                                             ----           ----              ----
                                                                         (UNAUDITED)      (AUDITED)         (AUDITED)
<S>                                                                       <C>            <C>              <C>
CURRENT ASSETS
       Cash and cash equivalents                                          $  777,950     $ 1,226,030      $ 2,198,205
       Accounts receivable, less allowance for doubtful
          accounts of $25,000 on December 31,  2005
          and March 31, 2005 and 2004                                      3,216,172       1,810,664        2,044,367
       Other receivables                                                      23,903          29,561           51,847
       Costs incurred on uncompleted contracts,
          net of progress billings                                         2,192,434       1,991,643        1,110,666
       Inventories- raw materials                                            121,694          86,703           66,657
       Prepaid expenses                                                      142,449         116,910          106,067
                                                                           ---------       ---------        ---------

                          Total current assets                             6,474,602       5,261,511        5,577,809
                                                                           ---------       ---------        ---------


Property, Plant And Equipment, net                                         2,639,979       2,870,347        3,212,165
                                                                           ---------       ---------        ---------

Total Assets                                                            $  9,114,581    $  8,131,858     $  8,789,974
                                                                          ==========      ==========       ==========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable                                                   $ 1,675,575      $  928,170       $  756,657
      Accrued expenses                                                     1,477,471         890,163          570,300
      Current maturity of long-term debt                                       5,506           5,506            5,243
                                                                           ---------        --------        ---------

                    Total current liabilities                              3,158,552       1,823,839        1,332,200
                                                                           ---------       ---------        ---------

LONG-TERM DEBT, LESS CURRENT MATURITY                                     10,015,302      10,019,422       10,025,377
                                                                          ----------      ----------       ----------

STOCKHOLDERS' DEFICIT
      Common stock - authorized 1,998,000 shares of
          $0.001 par value;  350,000 shares issued and outstanding               350             350              350
       Accumulated deficit                                             (  4,059,623)   (  3,711,753)    (  2,567,953)
                                                                       -------------   -------------    -------------

       Total Stockholders' Deficit                                     (  4,059,273)   (  3,711,403)    (  2,567,603)
                                                                       -------------   -------------    -------------

                                                                      $    9,114,581  $    8,131,858    $   8,789,974
                                                                       =============   =============     ============
</TABLE>


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


                                      F-15
<PAGE>

                                   RANOR, INC.
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                           NINE MONTHS ENDED                       YEARS ENDED
                                                              DECEMBER 31,                           MARCH 31,

                                                            2005             2004               2005            2004
                                                            ----             ----               ----            ----
                                                        (UNAUDITED)       (UNAUDITED)         (AUDITED)       (AUDITED)

<S>                                                      <C>              <C>                <C>            <C>
Net Sales                                               $ 13,713,739      $ 10,538,268       $ 14,269,982   $ 10,932,917

Cost Of Sales                                             11,494,666         9,642,262         12,631,640     10,148,270
                                                         -----------       -----------        -----------    -----------

Gross Profit                                               2,219,074           896,006          1,638,342        784,647

Operating Expenses                                         1,731,702         1,220,311          1,664,848      1,691,748
                                                         -----------       -----------        -----------    -----------

Income/(loss) From Operations                                487,372       (  324,305)        (   26,506)    (  907,101)
                                                         -----------       -----------        -----------    -----------

Other (Income) Expenses
      Interest expense                                       840,849           841,065          1,121,487      1,121,203
      Other income                                       (    8,707)       (    5,375)        (    8,285)    (   37,198)
                                                         -----------       -----------        -----------    -----------
                                                             832,142       (  835,691)          1,113,202      1,084,005
                                                         -----------       -----------        -----------    -----------

Income/(loss) Before Income Taxes And                    (  344,770)       (1,159,996)        (1,139,708)    (1,991,106)
                                                         -----------       -----------        -----------    -----------
Cumulative Effect    of a change in
accounting principle

Provision For Income Taxes                                     3,100             3,682              4,092          8,056
                                                         -----------       -----------        -----------    -----------

Income/(loss) Before Cumulative Effect Of
Change In
   Accounting Principle                                  (  347,870)       (1,163,678)        (1,143,800)    (1,999,162)
                                                         -----------       -----------        -----------    -----------

Cumulative Effect Of Change In Accounting
  Principle, Net Of Income Taxes Of $0                            --                --                 --    (   56,142)
                                                         -----------       -----------        -----------    -----------

Net Income/(loss)                                      $(   347,870)      $(1,163,678)       $(1,143,800)   $(2,055,304)
                                                        ============       ===========        ===========    ===========

Number of shares outstanding                               1,998,000         1,998,000          1,998,000      1,998,000
                                                         -----------       -----------        -----------    -----------

Net loss per share before cumulative effect                    $ .17             $ .58              $ .57          $1.00
                                                         -----------       -----------        -----------    -----------
of change in accounting principle

Net loss per share after cumulative effect                       N/A               N/A                N/A          $1.03
                                                         -----------       -----------        -----------    -----------
of change in accounting principle

</TABLE>


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


                                      F-16
<PAGE>

                                   RANOR, INC.
                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                       YEARS ENDED MARCH 31, 2005 AND 2004
                 AND FOR THE NINE MONTHS ENDED DECEMBER 31, 2005

<TABLE>
<CAPTION>

                                                Preferred Stock (a)            Common Stock              Accumulated
                                Warrants        -------------------            ------------              -----------
                               Outstanding      Shares      Amount         Shares         Amount     Deficit         Total
                               -----------      ------      ------         ------         ------     -------         -----
AUDITED:
- --------
<S>                              <C>             <C>      <C>              <C>              <C>      <C>           <C>
Balance, April 1, 2003           650,000         2,000    $2,000,000       350,000          $350     $(512,649)    $1,487,701

  Net loss for the year                             --            --            --            --    (2,055,304)    (2,055,304)
                                             ---------    ----------     ---------     ---------    -----------    -----------

Balance, March 31, 2004          650,000         2,000     2,000,000       350,000           350    (2,567,953)      (567,603)
                               ---------     ---------    ----------     ---------     ---------    -----------    -----------

   Net loss for the year                            --            --            --            --    (1,143,800)    (1,143,800)
                                             ---------    ----------     ---------     ---------    -----------    -----------

Balance, March 31, 2005          650,000         2,000    $2,000,000       350,000          $350   $(3,711,753)   $(1,711,403)
                               ---------     ---------    ----------     ---------     ---------    -----------    -----------

UNAUDITED:
   Net loss for the period                          --            --            --            --      (347,870)      (347,870)
                                             ---------    ----------     ---------     ---------    -----------    -----------

Balance, December 31, 2005       650,000         2,000    $2,000,000       350,000          $350   $(4,059,623)   $(2,059,273)
                               =========     =========    ==========     =========     =========    ===========    ===========
</TABLE>

(a) Due to the preferred stock agreement which has the features of a long term
liability, it is being shown as long term debt.

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


                                      F-17
<PAGE>


                                   RANOR, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                       NINE MONTHS ENDED                YEARS ENDED
                                                                         DECEMBER 31,                    MARCH 31,

                                                                      2005           2004           2005            2004
                                                                   (UNAUDITED)    (UNAUDITED)     (AUDITED)      (AUDITED)
                                                                   -----------    -----------     ---------      ---------

DECREASE IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                               <C>             <C>            <C>            <C>
     Net loss for the period                                      $  (  347,870)  $(1,163,678)   $ (1,143,800)  $ (2,055,304)
                                                                    ------------ -------------    ------------   ------------
     Noncash items included in net loss:
          Depreciation and amortization                                  310,097       306,927         407,706        393,524
          Provision for bad debts                                             --            --              --         25,000
     Changes in assets and liabilities:
          Accounts receivable                                       ( 1,399,850)  ( 1,087,466)         255,989    (  536,329)
          Inventory                                                 (   609,610)  (   846,128)    (    20,046)    (   24,945)
          Costs and estimated earnings in excess of billings on
               Uncompleted contracts                                     373,828     1,059,088    (   880,977)        199,878
          Costs on uncompleted contracts, net of contract
          billings                                                            --            --              --    (  357,122)
          Prepaid expenses                                          (    25,539)      (18,205)    (    10,843)            659
          Accounts payable and accrued expenses                        1,334,979       344,299         491,376        505,722
                                                                    ------------ -------------    ------------   ------------
                                                                    (    16,095)  (   241,485)         243,205        206,387
                                                                    ------------ -------------    ------------   ------------
                 Net cash used in operating activities              (   363,965)  ( 1,405,163)    (   900,595)    (1,848,917)
                                                                    ------------ -------------    ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchases of property, plant and equipment                     (    79,731) (     65,888)    (    65,888)   (   143,338)
                                                                    ------------ -------------    ------------   ------------
                 Net cash used in investing activities              (    79,731) (     65,888)    (    65,888)   (   143,338)
                                                                    ------------ -------------    ------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from long-term borrowings                                       --            --              --         30,620
     Principal payments on long-term borrowings                     (     4,384) (      3,904)    (     5,692)             --
                                                                    ------------ -------------    ------------   ------------
                 Net cash provided by (used in) financing
                 activities                                         (     4,384) (      3,904)    (     5,692)         30,620
                                                                    ------------ -------------    ------------   ------------


                 Net decrease in cash and cash equivalents        $ (   448,080)  $(1,474,955)   $(   972,175)   $(1,961,635)
                                                                    ------------ -------------    ------------   ------------

CASH AND CASH EQUIVALENTS, beginning of period                         1,226,030     2,198,206       2,198,205      4,159,840
                                                                    ------------ -------------    ------------   ------------

CASH AND CASH EQUIVALENTS, end of period                            $    777,950  $    723,251    $  1,226,030    $ 2,198,205
                                                                    ============ =============    ============   ============



Supplemental Disclosures of Cash Flows Information
---------------------------------------------------
           Cash paid during the year for:
                  Interest expense                                  $         --   $   841,065     $   934,821    $ 1,121,203
                                                                    ============ =============    ============   ============
                  Income taxes                                      $      3,100   $      ,100     $     1,181    $     8,056
                                                                    ============ =============    ============   ============
</TABLE>


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


                                      F-18
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

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, 2005 and March 31, 2004.

Since the redeemable preferred stock does not pay any dividends and the
redemption value is due in 2012, the discounted fair value of the redeemable
preferred stock, at company's cost of capital, is less than the face amount of
$2,000,000.

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 Ranor expects to collect.
Ranor 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 Ranor's customers were to deteriorate,
adversely affecting their ability to make payments, additional allowances would
be required. Based on management's assessment, Ranor provides for estimated
uncollectible amounts through a charge to earnings and a credit to a valuation
allowance. Balances that remain outstanding after Ranor 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.

INVENTORIES

Inventories consist of raw materials and are stated at the lower of cost or
market. Cost is determined principally by the first-in, first-out method.

NOTES PAYABLE

We account for all note liabilities that are due and payable in one year as
short-term notes.


                                      F-19
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

LONG-LIVED ASSETS

Property, plant and equipment- these assets are recorded at cost less
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
expenses, as incurred. The estimated useful lives are: machinery and equipment,
7-15 years; buildings, 30 years; and leasehold improvements, 10-20 years.

REVENUE RECOGNITION

Revenues from contracts were recorded on the percentage-of-completion method.
Effective April 1, 2003, Ranor adopted the units-of-delivery method under the
percentage-of-completion method of revenue recognition. Accordingly, income is
recognized at the time at which a unit under contract is completed and delivered
to the customer. The costs related to the unit are recorded as costs of goods
sold in an amount that approximates a proportionate amount for each unit of the
total expected costs in completing the entire contract. As described in Note 3,
prior to 2004, Ranor followed the labor-to-labor method under the
percentage-of-completion method of accounting for such contracts.

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

Costs incurred on uncompleted contracts consist of labor, overhead, and
materials costs incurred on uncompleted contracts. Costs are 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 $14,060 in 2005 and $30,686 in 2004.

INCOME TAXES

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

RESTATEMENT

The Company had recorded the number of shares used in per share calculation for
2005 as 9,959,000; the number was corrected to 8,089,000 in the statement of
operations and shareholders equity.


                                      F-20
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

NEW ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
Payment" ("SFAS 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123") and supercedes APB Opinion No. 25, "Accounting for
Stock Issued to Employees. "SFAS 123R requires that all share-based payments to
employees, including grants of employee stock options, be recognized in the
financial statements based on their fair values, beginning with the first
interim or annual period after June 15, 2005, with early adoption encouraged.
The pro forma disclosures previously permitted under SFAS 123, no longer will be
an alternative to financial statement recognition. We are required to adopt SFAS
123R in the third quarter of 2005. Under SFAS 123R, we must determine the
appropriate fair value model to be used in valuing share-based payments, the
amortization method for compensation cost and the transition method to be used
at the date of adoption. Upon adoption, we may choose from two transition
methods: the modified-prospective transition approach or the
modified-retroactive transition approach. Under the modified-prospective
transition approach we would be required to recognize compensation cost for
awards that were granted prior to, but not vested as of the date of adoption.
Prior periods remain unchanged and pro forma disclosures previously required by
SFAS No. 123 continue to be required. Under the modified-retrospective
transition method, we would be required to restate prior periods by recognizing
compensation cost in the amounts previously reported in the pro forma disclosure
under SFAS No. 123. Under this method, we would be permitted to apply this
presentation to all periods presented or to the start of the fiscal year in
which SFAS No. 123R is adopted. We would also be required to follow the same
guidelines as in the modified-prospective transition method for awards granted
subsequent to adoption and those that were granted and not yet vested.

NEW ACCOUNTING PRONOUNCEMENTS

We are currently evaluating the requirements of SFAS 123R and its impact on our
consolidated results of operations and earnings per share. We have not yet
determined the method of adoption or the effect of adopting SFAS 123R, and it
has not been determined whether the adoption will result in amounts similar to
the current pro forma disclosures under SFAS 123.

In December 2004, the FASB issued Staff Position ("FSP") No.109-2, "Accounting
and Disclosure Guidance for the Foreign Earnings Repatriation Provision within
the American Jobs Creation Act of 2004" ("FSP 109-2"). This position provides
guidance under FASB Statement No.109 ("SFAS 109"), "Accounting for Income
Taxes", with respect to recording the potential impact of the repatriation
provisions of the American Jobs Creation Act of 2004 (the "Jobs Act") on
enterprises' income tax expense and deferred tax liability. The Jobs Act was
enacted on October 22, 2004. FSP 109-2 states that an enterprise is allowed time
beyond the financial reporting period of enactment to evaluate the effect of the
Jobs Act on its plan for reinvestment or repatriation of foreign earnings for
purposes of applying SFAS 109.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- - An Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions"
("SFAS 153"). SFAS 153 eliminates the exception from fair value measurement for
nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB
Opinion No. 29, "Accounting for Nonmonetary Transactions," and replaces it with
an exception for exchanges that do not have commercial substance. SFAS 153
specifies that a nonmonetary exchange has commercial substance if the future
cash flows of the entity are expected to change significantly as a result of the
exchange. SFAS 153 is effective for fiscal periods beginning after June 15,
2005. We have considered SFAS 153 and have determined that this pronouncement is
not applicable to our current operations.


                                      F-21
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

NEW ACCOUNTING PRONOUNCEMENTS, CONTINUED

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - An Amendment
of ARB Opinion No. 43, Chapter 4" ("SFAS 151"). SFAS 151 amends the guidance in
ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted
material (spoilage). Among other provisions, the new rule requires that items
such as idle facility expense, excessive spoilage, double freight, and
rehandling costs be recognized as current period charges regardless of whether
they meet the criterion of "so abnormal" as stated in ARB No. 43. Additionally,
SFAS 151 requires that the allocation of fixed production overheads to the costs
of conversion be based on the normal capacity of the production facilities. SFAS
151 is effective for fiscal years beginning after June 15, 2005. We have
considered SFAS 151 and have determined that this pronouncement will not
materially impact our consolidated results of operations.

In November 2004, the FASB issued SFAS No. 152, "Accounting for Real Estate
Time-Sharing Transactions - An amendment of SFAS No. 66 and 67". This statement
amends SFAS No. 66, "Accounting for Sales of Real Estate, to reference the
financial accounting and reporting guidance for real estate time-sharing
transactions which is provided in AICPA Statement of Position ("SOP") 04-2,
"Accounting for Real Estate Time-Sharing Transactions." This statement also
amends SFAS No. 67, "Accounting for Costs and Initial Rental Operations of Real
Estate Projects," to state the guidance for (a) incidental costs and (b) costs
incurred to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those costs is subject to guidance in SOP 04-2.
SFAS 152 is effective for fiscal years beginning after June 15, 2005. We have
considered SFAS 152 and have determined that this pronouncement is not
applicable to our current operations.

In December 2003, the FASB issued a revision to Statement No. 132, Employers'
Disclosures about Pensions and Other Postretirement Benefits. This revision
requires additional disclosures by Ranor regarding its plan assets, investment
strategies, plan obligations and cash flows. We have considered revised
statement 132 and have determined that at this time this pronouncement is not
applicable to our current operations.

NOTE 2. DESCRIPTION OF BUSINESS

Ranor, Inc., ("Ranor") is a leading provider of high precision metal fabrication
and machining services for large metal components weighing up to 100 tons. Ranor
fabricates nuclear grade steel casks, canisters and housings for the
transportation and storage of radioactive materials; produces large fabrications
for Navy aircraft carriers, submarines and commercial vessels; and manufactures
pulp and paper machinery, gas turbine power generation equipment, oil refinery
and utilities equipment. Ranor is one of two companies currently capable of
machining one-piece aluminum domes for Boeing's Delta III and Delta IV rocket
programs.


                                      F-22
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 3. PROPERTY, PLANT AND EQUIPMENT

As of March 31, 2005 and 2004 property, plant and equipment consisted of the
following:

                                                      2005               2004
                                                      ----               ----
       Land                                         $ 110,113          $ 110,113
       Building and improvements                    1,223,054          1,223,054
       Furniture and fixtures                          43,737             38,471
       Machinery and equipment                      2,549,045          2,488,422
                                                  -----------         ----------
                                                    3,925,949          3,860,060
                                                  -----------         ----------

       Less: accumulated depreciation               1,055,602            647,895
                                                  -----------         ----------
                                                  $ 2,870,347         $3,212,165
                                                  -----------         ----------

Depreciation expense for the years ended March 31, 2005 and 2004 were $407,707
and $393,524, respectively.

NOTE 4. CHANGE IN ACCOUNTING PRINCIPLE/CONTRACTS IN PROCESS

During 2004, Ranor changed its method of recognizing revenues for contracts that
have an estimated contract value of $500,000 and contract life of at least nine
months. Whereas prior to 2004, Ranor followed the labor-to-labor method for
determining the percentage-of-completion method of accounting for such contracts
in which income is recognized in the ratio that labor costs incurred bears to
estimated total labor costs, it is now recognizing the percentage-of-completion
based upon the units-of-delivery method (see Note 1). The cumulative effect of
the change of $56,142 is shown as a one-time charge to operations in the 2004
statement of operations.

  Contracts in process consisted of the following at March 31:

                                                       2005             2004
                                                  ------------     -------------
    Costs incurred on uncompleted contracts        $5,561,541      $   5,610,949
    Estimated losses accrued to date                 (892,376)       (1,064,104)
                                                  ------------     -------------
                                                    4,669,165         4,546,845
    Less: billings to date                          2,677,522         3,436,179
                                                  ------------     -------------

                                                   $1,991,643      $  1,110,666
                                                  ============     =============


These amounts are included in the accompanying balance sheets under the caption
"Costs and estimated earnings in excess of billings on uncompleted contracts" at
March 31, 2005 and 2004.


                                      F-23
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

NOTE 5. LONG-TERM DEBT

     Long-term debt consists of the following at March 31:
                                                                                            2005              2004
                                                                                        -----------       -----------
<S>                                                                                      <C>               <C>
        Preferred Stock - authorized 2,000 shares of $.001 par value:
           2,000 shares issued and outstanding and redeemable on August 7,
           2012.
        (See Note 10)                                                                     $2,000,000       $2,000,000

        Green Mountain Partners III, L.P. -
          Unsecured note payable in semi-annual interest installments at
          14.0%, due in February and August. Principal payments of
          $800,000 due annually commencing on August 7, 2006 through
          August 2011, and $1,600,000 on August 7, 2012. Prepayments of
          principal are allowable or required under certain conditions, as
          defined. The note is subject to covenants, which provide, among
          other things, restrictions on the incurrence of additional debt
          or commitments.                                                                  6,400,000        6,400,000

        Phoenix Life Insurance Company -
          Unsecured note payable in semi-annual interest installments at
          14.0%, due in February and August. Principal payments of
          $200,000 due annually commencing on August 7, 2006 through
          August 2011, and $400,000 on August 7, 2012. Prepayments of
          principal are allowable or required under certain conditions, as
          defined. The note is subject to covenants, which provide, among
          other things, restrictions on the incurrence of additional debt
          or commitments.                                                                  1,600,000        1,600,000

        Ford Motor Credit Company-
          Payable in monthly installments of $552 including interest of
          4.90% commencing July 20, 2003 through June 20, 2009.
          Secured by a vehicle.                                                               24,928           30,620
                                                                                      --------------   --------------
                                                                                          10,024,928       10,030,620
        Principal payments due within one year                                                 5,506            5,243
                                                                                     ---------------  ---------------

                                                                                         $10,019,422      $10,025,377
                                                                                     ===============  ===============
</TABLE>


     As of March 31, 2005, long-term debt matures as follows:

              Years ending
                March 31,                                      Amount
                ---------                                    ---------
                  2006                                     $       5,506
                  2007                                         1,005,782
                  2008                                         1,006,071
                  2009                                         1,006,375
                  2010                                         1,001,194
               Thereafter                                      6,000,000
                                                               ---------
                                                             $10,024,928
                                                             ===========

                                      F-24
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 6. INCOME TAXES

<TABLE>
<CAPTION>

The provision for income taxes consists of the following at March 31:                 2005           2004
                                                                                      ----           ----
<S>                                                                                     <C>           <C>
Current                                                                                 $ 4,092       $ 8,056
Deferred                                                                                     --            --
                                                                                    -----------    ----------
                                                                                      $   4,092      $  8,056
                                                                                    ===========    ==========

Deferred tax assets and liabilities consist of the following at March 31:
    Deferred tax asset:
        Allowance for doubtful accounts                                                $  9,800       $ 9,800
        Inventory valuation                                                              26,900        10,700
        Revenue recognition on uncompleted contracts                                    113,900       457,800
        Net operating loss carryforward                                               1,353,200       564,700
        Accrued expenses                                                                127,600       106,000
                                                                                    -----------    ----------
                                                                                      1,631,400     1,149,000
        Less: Valuation Allowance                                                   (1,440,000)   (  995,700)
                                                                                    ===========    ==========
                                                                                   $    191,400   $   153,300
                                                                                    ===========    ==========

     Deferred tax liabilities:
          Depreciation of property and equipment                                   $    191,400   $   153,300
                                                                                    ===========    ==========
</TABLE>


The valuation allowance increased by $444,300 in 2005 and $798,100 in 2004.

At March 31, 2005, Ranor has approximately $3,470,000 of net operating losses
available to reduce future taxable income through 2025 for federal purposes and
2010 for state purposes. Under Internal Revenue Code Section 382, whenever a
stock ownership change of more than 50% occurs, within generally a three-year
period (testing period), the corporation's ability to use pre-change loss carry
forward is substantially limited.

Ranor's effective income tax rate is 39%, which is higher than what would be
expected if the federal statutory rate was applied to losses primarily because
of the valuation allowance applied to the net operating loss carryforward.


NOTE 7. RELATED PARTY TRANSACTIONS

Ranor has agreements to pay management fees totaling $200,000 per year to four
stockholders under agreements that expire August 2005 and are renewable annually
thereafter. Effective June 2003, two of these stockholders have accepted a
salary from Ranor in lieu of the management fee, but have retained their rights
under their agreements. Total management fees charged to operations under this
agreement were $49,000 in 2005 and $75,000 in 2004. As of March 31, 2005 and
2004, Ranor has included in accounts payable unpaid management fees of $132,291
and $83,333, respectively. The total future commitments under these agreements
were $8,333 as of March 31, 2005.

Ranor has long-term debt payable to Green Mountain Partners III, L.P. and
Phoenix Life Insurance Company (see Note 4), which holds the outstanding
preferred stock and common stock warrants (see Note 9). Interest expense charged
to operations under the related party debt was $1,120,000 in 2005 and 2004.


                                      F-25
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 8. OPERATING LEASE

Ranor leases office equipment under operating lease agreements expiring through
November 2008. Total rent expense charged to operations approximated $16,700 in
2005 and $19,900 in 2004.

Future minimum lease payments under noncancellable portions of the leases as of
March 31, 2005, are as follows:

              Years ending
               March 31,                                        Amount
               ---------                                        ------
                 2006                                          $  16,678
                 2007                                             16,678
                 2008                                             15,288
                                                               ---------
         Total minimum lease payments                          $  48,644
                                                               =========


NOTE 9. 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. There were no employer-matched contributions charged to
operations in 2005 and 2004.

NOTE 10. CAPITAL STOCK

PREFERRED STOCK

The 2,000 shares of preferred stock outstanding are classified as Series A and
carry a mandatory redemption provision under which Ranor is required to redeem
all the outstanding shares on August 7, 2012 at $1,000 per share. Ranor has the
option to redeem any or all the shares prior to that date. The preferred stock
carries no voting or dividend rights. The preferred stock carries a preference
of $1,000 per share in the event of liquidation.

The stockholder agreements contain a provision whereby, effective August 2009,
any preferred stockholder can, upon written notice, require Ranor to repurchase
their shares at a price as defined in the agreement.


STOCK WARRANTS

At March 31, 2005 and 2004, the preferred stockholders and debt holders (see
Note 6) had warrants to acquire 650,000 shares of common stock at a price of
$.001 per share. The warrants are immediately exercisable and expire on August
7, 2012. The warrants carry repurchase provisions as defined. Six hundred fifty
thousand shares of common stock have been reserved for the issuance of these
warrants.


The stockholder agreements contain a provision whereby, effective August 2009,
any holders of stock warrants can, upon written notice, require Ranor to
repurchase the warrants or any shares issued under the warrant agreement at a
price as defined in the agreement. At March 31, 2005 and 2004, the warrants had
no determinable value.

COMMON STOCK

The sale or transfer of the common stock of Ranor is subject to the terms of the
stockholder agreement among Ranor and its stockholders and warrant holders.


                                      F-26
<PAGE>

                                   RANOR, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 11. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

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

In 2005, Ranor sold a substantial portion of its products to two customers.
Sales for the period ended March 31, 2005, to these customers were approximately
$2,680,000 (19%), and $1,572,000 (11%). At March 31, 2005, amounts due from
these customers, included in trade accounts receivable, were $519,667 and
$38,777, respectively.

In 2004, Ranor sold a substantial portion of its products to two customers.
Sales for the period ended March 31, 2004 to these customers were approximately
$2,311,000 (19%), and $1,818,000 (15%). At March 31, 2004, amounts due from
these customers, included in trade accounts receivable, were $286,696 and
$248,604, respectively.

NOTE 12. ADOPTION OF ACCOUNTING PRINCIPLE

The FASB has issued Statement No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. Statement No.
150 requires that certain freestanding financial instruments be reported as
liabilities in the balance sheet. Depending on the type of financial instrument,
it will be accounted for at either fair value or the present value of future
cash flows determined at each balance sheet date with the change in that value
reported as interest expense in the income statement. Prior to the application
of Statement No. 150, either those financial instruments were not required to be
recognized, or if recognized were reported in the balance sheet as equity and
changes in the value of those instruments were normally not recognized in net
earnings.

As explained in Note 9, Ranor has mandatory redeemable preferred stock that is
reported as a liability under Statement No. 150. The carrying value of that
stock was transferred from stockholders' deficiency to liabilities, which had
the effect of increasing stockholders' deficiency and increasing liabilities.

NOTE 13. SUBSEQUENT EVENT

On August 17, 2005 an agreement was signed whereby the present shareholders,
note holders and preferred stock holders agreed to sell their shares, redeem
their notes and retire their preferred stock. The purchaser of these shares is
Ranor Acquisition LLC, a Delaware Limited Liability Company. The purchase price
of the Common Securities is $9,250,000 minus the aggregate amount of the Company
Debt outstanding on the closing date, minus: (1) the adjusted redemption value
of the preferred shares; (2) the sellers' expenses; (3) the net cash amount on
the closing date as determined in accordance with the agreement (or plus, if the
net cash amount is a negative number); (4) and any accounts payable adjustment
amount (such aggregate value being referred to herein as the "closing date
purchase price"). The closing date purchase price shall be subject to further
adjustment after the closing pursuant to a review by the sellers' accountants.

The incoming shareholders will pay off the $8 million notes payable, redeem the
$2 million preferred stock, pay the outstanding balance of the accounts payable,
and recompense the purchase price of common shares of Ranor from the following
funds:

1. Sale-leaseback of Ranor's land and building for $3 million.
2. Bank term Loan of $4 million and $1 million bank line of credit.
3. Capital contribution of $2.5 million.
4. Ranor's cash account.





                                      F-27