UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
the quarterly period ended December 31, 2009





OR





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





For
the transition period from
             to





Commission
File Number 0-51378





TECHPRECISION
CORPORATION


(Exact
name of registrant as specified in its charter)





DELAWARE
            
            51-0539828(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)Bella
      Drive, Westminster, Massachusetts 01473
            
            01473(Address
      of principal executive offices)
            
            (Zip
      Code)





(978) 874-0591


(Registrant’s
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes x      No o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).     Yes o      No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer
            o
            Accelerated
      filer                                      oNon-Accelerated
      Filer
            o
            Smaller
      reporting
      company                   x





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





The
number of shares of the Registrant’s common stock, par value $.0001 per share,
issued and outstanding at February 15, 2010 was 14,230,846.











TECHPRECISION CORPORATION


CONSOLIDATED
BALANCE SHEETS





December
      31, 2009
            
            
            March
      31, 2009UnauditedASSETSCurrent
      assetsCash
      and cash equivalents
            
            $
            9,374,081
            
            
            $
            10,462,737Accounts
      receivable, less allowance for doubtful accounts of
    $259,999
            
            
            1,981,052
            
            
            
            1,418,830Costs
      incurred on uncompleted contracts, in excess of progress
      billings
            
            
            3,782,895
            
            
            
            3,660,802Inventories
      - raw materials
            
            
            296,343
            
            
            
            351,356Deferred
      tax asset
            
            
            157,392
            
            
            
            --Prepaid
      expenses
            
            
            824,747
            
            
            
            1,583,234Other
      receivables
            
            
            30,000
            
            
            
            59,979Total
      current assets
            
            
            16,446,510
            
            
            
            17,536,938Property,
      plant and equipment, net
            
            
            3,377,286
            
            
            
            2,763,434Equipment
      under construction
            
            
            --
            
            
            
            887,279Deferred
      loan cost, net
            
            
            91,896
            
            
            
            104,666Total
      assets
            
            $
            19,915,692
            
            
            $
            21,292,317LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable
            
            $
            465,099
            
            
            $
            950,681Accrued
      expenses
            
            
            499,129
            
            
            
            710,332Accrued
      taxes
            
            
            --
            
            
            
            155,553Deferred
      revenues
            
            
            1,705,345
            
            
            
            3,945,364Current
      maturity of long-term debt
            
            
            810,511
            
            
            
            624,818Total
      current liabilities
            
            
            3,480,084
            
            
            
            6,386,748Long-term
      debt
            
            
            5,058,669
            
            
            
            4,824,453STOCKHOLDERS’
      EQUITYPreferred
      stock- par value $.0001 per share, 10,000,000 shares
      authorized,of
      which 9,890,980 are designated as Series A Convertible Preferred
      Stock,with
      9,661,482 shares issued and outstanding at December 31,
    2009and
      6,295,508 at March 31, 2009 (liquidation preference
      of  $2,753,523 and $1,794,220 at December 31, 2009 and
      March 31, 2009, respectively.)
            
            
            2,210,216
            
            
            
            2,287,508Common
      stock -par value $.0001 per share, authorized,90,000,000
      shares, issued and outstanding, 14,230,846shares
      at December 31, 2009 and 13,907,513 at March 31, 2009
            
            
            1,424
            
            
            
            1,392Paid
      in capital
            
            
            2,845,276
            
            
            
            2,872,779Retained
      earnings
            
            
            6,320,023
            
            
            
            4,919,437Total
      stockholders’ equity
            
            
            11,376,939
            
            
            
            10,081,116Total
      liabilities and stockholders' equity
            
            $
            19,915,692
            
            
            $
            21,292,317





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





1











TECHPRECISION
      CORPORATIONCONSOLIDATED STATEMENTS OF
      OPERATIONS
              (unaudited)





Three
      months ended
            
            
            Nine
      months endedDecember
      31,
            
            
            December
      31,2009
            
            
            2008
            
            
            2009
            
            
            2008Net
      sales
            
            $
            5,255,591
            
            
            $
            8,554,978
            
            
            $
            23,691,616
            
            
            $
            33,814,122Cost
      of sales
            
            
            4,241,102
            
            
            
            5,932,505
            
            
            
            19,466,554
            
            
            
            22,798,518Gross
      profit
            
            
            1,014,489
            
            
            
            2,622,473
            
            
            
            4,225,062
            
            
            
            11,015,604Operating
      expenses:Salaries
      and related expenses
            
            
            358,841
            
            
            
            330,701
            
            
            
            1,083,510
            
            
            
            1,087,831Professional
      fees
            
            
            104,132
            
            
            
            63,847
            
            
            
            290,755
            
            
            
            184,316Selling,
      general and administrative
            
            
            527,133
            
            
            
            144,825
            
            
            
            1,052,127
            
            
            
            433,959Total
      operating expenses
            
            
            990,106
            
            
            
            539,373
            
            
            
            2,426,392
            
            
            
            1,706,106Income
      from operations
            
            
            24,383
            
            
            
            2,083,100
            
            
            
            1,798,670
            
            
            
            9,309,498Other
      income (expenses):Other
      income
            
            
            12,000
            
            
            
            --
            
            
            
            12,000
            
            
            
            --Interest
      expense
            
            
            (108,049
            )
            
            
            (111,052
            )
            
            
            (319,601
            )
            
            
            (344,923
            )Interest
      income
            
            
            4,205
            
            
            
            --
            
            
            
            12,575
            
            
            
            --Finance
      costs
            
            
            (4,257
            )
            
            
            (4,257
            )
            
            
            (12,770
            )
            
            
            (12,770
            )Total
      other income (expense)
            
            
            (96,101
            )
            
            
            (115,309
            )
            
            
            (307,796
            )
            
            
            (357,693
            )Income
      (loss) before income taxes
            
            
            (71,718
            )
            
            
            1,967,791
            
            
            
            1,490,874
            
            
            
            8,951,805Income
      tax expense (benefit)
            
            
            (276,415
            )
            
            
            954,562
            
            
            
            90,288
            
            
            
            3,890,780Net
      income
            
            $
            204,697
            
            
            $
            1,013,229
            
            
            $
            1,400,586
            
            
            $
            5,061,025Net
      income per share of common stock (basic)
            
            $
            0.01
            
            
            $
            0.07
            
            
            $
            0.10
            
            
            $
            0.37Net
      income per share (fully diluted)
            
            $
            0.01
            
            
            $
            0.04
            
            
            $
            0.07
            
            
            $
            0.19Weighted
      average number of shares outstanding (basic)
            
            
            14,214,542
            
            
            
            13,907,094
            
            
            
            14,013,210
            
            
            
            13,569,513Weighted
      average number of shares outstanding (fully diluted)
            
            
            21,448,233
            
            
            
            24,418,115
            
            
            
            20,214,302
            
            
            
            26,335,421





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





2








TECHPRECISION
      CORPORATIONCONSOLIDATED STATEMENT OF CASH
      FLOWS
              (Unaudited)





Nine
      Months EndedDecember
      31,2009
            
            
            2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income
            
            $
            1,400,586
            
            
            $
            5,061,025Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
            
            
            313,370
            
            
            
            415,127Share
      based compensation
            
            
            29,216
            
            
            
            --Deferred
      income taxes
            
            
            (157,392
            )
            
            
            (24,587
            )Gain
      on sale of equipment
            
            
            (12,000
            )
            
            
            --Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            (562,222
            )
            
            
            (3,516,941
            )Inventory
            
            
            55,013
            
            
            
            (151,773
            )Costs
      incurred on uncompleted contracts
            
            
            (122,093
            )
            
            
            (1,543,141
            )Other
      receivables
            
            
            29,979
            
            
            
            (507,410
            )Prepaid
      expenses
            
            
            758,487
            
            
            
            --Accounts
      payable
            
            
            (641,135
            )
            
            
            252,755Accrued
      expenses
            
            
            (211,203
            )
            
            
            603,373Customer
      advances
            
            
            (2,240,019
            )
            
            
            3,717,463Net
      cash (used in) provided by operating activities
            
            
            (1,359,413
            )
            
            
            4,305,891CASH
      FLOW FROM INVESTING ACTIVITIESPurchases
      of property, plant and equipment
            
            
            (27,173
            )
            
            
            (183,901
            )Proceeds
      from sale of equipment
            
            
            12,000
            
            
            
            --Deposits
      on equipment
            
            
            --
            
            
            
            (614,096
            )Net
      cash used in investing activities
            
            
            (15,173
            )
            
            
            (797,997
            )CASH
      FLOWS FROM FINANCING ACTIVITIESCapital
      distribution of WMR equity
            
            
            (140,627
            )
            
            
            (140,422
            )Proceeds
      from exercised stock options and warrants
            
            
            6,648
            
            
            
            170,060Borrowings
      under line of credit facility
            
            
            919,297
            
            
            
            --Payment
      of notes and lease obligations
            
            
            (499,388
            )
            
            
            (460,166
            )Net
      cash provided by (used in) financing activities
            
            
            285,930
            
            
            
            (430,528
            )Net
      (decrease) increase in cash and cash equivalents
            
            
            (1,088,656
            )
            
            
            3,077,366Cash
      and cash equivalents, beginning of period
            
            
            10,462,737
            
            
            
            2,852,676Cash
      and cash equivalents, end of period
            
            $
            9,374,081
            
            
            $
            5,930,042





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








3








TECHPRECISION
      CORPORATIONCONSOLIDATED
      STATEMENT OF CASH FLOWS
              (Unaudited)




Nine
      Months Ended December 31,2009
            
            
            2008SUPPLEMENTAL
      DISCLOSURES OF CASH FLOWS INFORMATIONCash
      paid during the year for:Interest
      expense
            
            $
            307,854
            
            
            $
            344,310Income
      taxes
            
            $
            1,048,783
            
            
            $
            3,093,195





SUPPLEMENTAL
INFORMATION – NONCASH TRANSACTIONS:





Nine
months Ended December 31, 2009





In a
shareholder transaction on October 5, 2009, 229,498 shares of Series A
Convertible Preferred Stock were converted into 300,000 shares of common
stock.





The
company placed $887,279 of equipment which was under construction at the
beginning of the nine month period ended December 31, 2009 into
service.





On August
14, 2009, the Company entered into a warrant exchange agreement pursuant to
which the Company agreed to issue 3,595,472 shares of Series A Convertible
Preferred Stock to certain investors in exchange for warrants to purchase
9,320,000 shares of common stock. The warrants carried exercise prices ranging
from $0.44 to $0.65 per share. Effective September 11, 2009, the warrants were
surrendered to the Company, the Company filed an amendment to its certificate of
designation relating to its Series A Convertible Preferred Stock to increase the
number of designated shares of Series A Convertible Preferred Stock, and the
3,595,472 shares of Series A Convertible Preferred Stock were issued pursuant to
the terms of the warrant exchange agreement.  All warrants surrendered
in connection with the warrant exchange were cancelled.




Nine
months Ended December 31, 2008





During
the nine months ended December 31, 2008, the Company issued 944,518 shares of
common stock upon conversion of 722,556 shares of Series A Convertible Preferred
Stock, based on a conversion ratio of 1.3072 shares of common stock for each
share of  Series A Convertible Preferred Stock. The conversion price
of each share of common stock was computed at $0.2180.





During
the six months ended December 31, 2008, the Company issued 390,000 shares of
common stock upon exercise of 390,000 warrants having an exercise price of
$.43605.





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





4





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)





NOTE
1 - DESCRIPTION OF BUSINESS





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





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





NOTE 2 - SIGNIFICANT ACCOUNTING
POLICIES





Basis
of Presentation and Consolidation





On
February 24, 2006, TechPrecision acquired all stock of Ranor in a transaction
which is accounted for as a recapitalization (reverse acquisition), with Ranor
being treated as the acquiring company for accounting purposes. The accompanying
consolidated financial statements include the accounts of the Company and Ranor
as well as a variable interest entity, WM Realty. Intercompany transactions and
balances have been eliminated in consolidation.





In
accordance with Statement of Financial Accounting Standards FASB ASC 855
“Subsequent Events”, the Company performed an evaluation of subsequent events
for the accompanying financial statements and notes included in Part 1, Item 1
of this report through February  11, 2010, the date this Report was
issued. The Notes to Consolidated Financial Statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC) for Quarterly Reports on Form 10-Q. Certain information and note
disclosures normally included in financial statements prepared in accordance
with GAAP have been condensed or omitted pursuant to such rules and regulations.
These notes should be read in conjunction with the Notes to Consolidated
Financial Statements of the Company in Item 8 of the 2009 Annual Report on
Form 10-K.





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
Value of Financial Instruments





We
account for fair value of financial instruments under the Financial Accounting
Standard Board’s (FASB) authoritative guidance,  which defines
fair value, and establishes a framework to measure fair value and the related
disclosures about fair value measurements. The fair value of a financial
instrument is the amount that could be received upon the sale of an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Financial assets are marked to bid prices
and financial liabilities are marked to offer prices. Fair value measurements do
not include transaction costs. The FASB establishes a fair value hierarchy used
to prioritize the quality and reliability of the information used to determine
fair values. Categorization within the fair value hierarchy is based on the
lowest level of input that is significant to the fair value measurement. The
fair value hierarchy is defined into the following three
categories:





Level
1:  Inputs based upon quoted market prices for identical assets or
liabilities in active markets at the measurement date.





Level
2:  Observable inputs other than quoted prices included in Level 1, such as
quoted prices for similar assets and liabilities in active markets; quoted
prices for identical or similar assets and liabilities in markets that are not
active; or other inputs that are observable or can be corroborated by observable
market data.





Level
3:  Inputs that are management’s best estimate of what market participants
would use in pricing the asset or liability at the measurement date.  The
inputs are unobservable in the market and significant to the instruments’
valuation.





In
addition, we will measure fair value in an inactive or dislocated market based
on facts and circumstances and significant management judgment.  We will
use inputs based on management estimates or assumptions, or make adjustments to
observable inputs to determine fair value when markets are not active and
relevant observable inputs are not available.





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




5




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 value.
The deposits are maintained in a large regional bank and the amount of federally
insured cash deposits was $250,000 as of December 31, 2009 compared to $100,000
as of December 31, 2008.





Accounts
receivable





Trade
accounts receivable are stated at the amount the Company expects to collect. The
Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments.
Management considers the following factors when determining the collectability
of specific customer accounts: customer credit-worthiness, past transaction
history with the customer, current economic industry trends, and changes in
customer payment terms. If the financial condition of the Company’s customers
were to deteriorate, adversely affecting their ability to make payments,
additional allowances would be required. Based on management’s assessment, the
Company provides for estimated uncollectible amounts through a charge to
earnings and a credit to a valuation allowance. Balances that remain outstanding
after the Company has used reasonable collection efforts are written off through
a charge to the valuation allowance and a credit to accounts receivable. There
was bad debt expense of $234,999 and $0 recorded for the quarters ended December
31, 2009 and 2008, respectively.





Inventories





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





Notes
Payable





We
account for all notes that are due and payable in one year as short-term
liabilities; carrying amounts approximate fair value.





Long-lived
Assets





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





The
accounting for the impairment or disposal of long-lived assets requires an
assessment of the recoverability of our investment in long-lived assets to be
held and used in operations whenever events or circumstances indicate that their
carrying amounts may not be recoverable. Such assessment requires that the
future cash flows associated with the long-lived assets be estimated over their
remaining useful lives. An impairment loss may be required when the future cash
flows are less than the carrying value of such assets.





Repair
and maintenance activities





The
Company incurs maintenance costs on all of its major equipment. Costs that
extend the life of the asset, materially add to its value, or adapt the asset to
a new or different use are separately capitalized in property, plant and
equipment and are depreciated over their estimated useful lives. All other
repair and maintenance costs are expensed as incurred.





Leases





Operating
leases are charged to operations as paid. Capital leases are capitalized and
depreciated over the term of the lease.  A lease is considered a
capital lease if one of four criteria are satisfied: 1) the lease contains an
option to purchase the property for less than fair market value, 2) transfer of
ownership at the end of the lease, 3) the lease term is 75% or more of estimated
economic life of leased property, and 4) present value of minimum lease payments
is at least 90% of fair value of the leased property to the lessor at the
inception of the lease.





Convertible Preferred Stock and
Warrants





The
Company measures the fair value of the Series A Convertible Preferred Stock by
the amount of cash that was received for their issuance. The Company determined
that the convertible preferred shares and the accompanying warrants issued are
equity instruments.




6




Our
preferred stock also met all conditions for the classification as equity
instruments. The Company had a sufficient number of authorized shares, there is
no required cash payment or net cash settlement requirement and the holders of
the Series A Convertible Preferred Stock had no right higher than the common
stockholders other than the liquidation preference in the event of liquidation
of the Company. Although the Company had an unconditional obligation to issue
additional shares of common stock upon conversion of the Series A Convertible
Preferred Stock if EBITDA per share was below the targeted amount, the
certificate of designation relating to the Series A Convertible Preferred Stock
does not require the Company to issue shares that are registered pursuant to the
Securities Act of 1933, and as a result, the additional shares issuable upon
conversion of the Series A Convertible Preferred Stock need not be registered
shares.





The
Company’s warrants were excluded from derivative accounting because they were
indexed to the Company’s own unregistered common stock and are classified in
stockholders’ equity. The majority of warrants were exchanged for preferred
stock on August 14, 2009.  At December 31, 2009, the Company had
112,500 warrants issued and outstanding.





Shipping
Costs





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





Selling,
General, and Administrative





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





Stock
Based Compensation





Stock
based compensation represents the cost related to stock-based awards granted to
employees. The Company measures stock based compensation cost at grant date,
based on the estimated fair value of the award and recognizes the cost as
expense on a straight-line basis (net of estimated forfeitures) over the
employee’s requisite service period. The Company estimates the fair value of
stock options using a Black-Scholes valuation model.





Earnings
per Share of Common Stock





Basic net
income per common share is computed by dividing net income or loss by the
weighted average number of shares outstanding during the period. Diluted net
income per common share is calculated using net income divided by diluted
weighted-average shares. Diluted weighted-average shares include
weighted-average shares outstanding plus the dilutive effect of potential common
stock issuable in respect of convertible preferred stock, warrants and
share-based compensation were calculated using the treasury stock
method.





Revenue
Recognition and Costs Incurred





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





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





7




Income
Taxes





The
Company uses the asset and liability method of financial accounting and
reporting for income taxes required by FASB ASC 740,Income Taxes.
Under FASB ASC 740, deferred income taxes reflect the tax impact of temporary
differences between the amount of assets and liabilities recognized for
financial reporting purposes and the amounts recognized for tax purposes.
Temporary differences giving rise to deferred income taxes consist primarily of
the reporting of losses on uncompleted contracts, the excess of depreciation for
tax purposes over the amount for financial reporting purposes, and accrued
expenses accounted for differently for financial reporting and tax purposes, and
net operating loss carry-forwards. According to FASB ASC 740-270-25,Intraperiod Tax Allocation,
tax expense related to interim period ordinary income is computed at an
estimated annual effective tax rate related to all other items are individually
computed and recognized when the items occur.  The tax effects of
losses that arise in the early portion of a fiscal year are recognized only when
the benefits are expected to be either realized during the year or recognized as
a deferred tax asset at the end of the year. Interest and penalties are
included in general and administrative expenses.





Variable
Interest Entity (VIE)





The
Company has consolidated WM Realty, a variable interest entity that entered into
a sale and leaseback contract with the Company, in 2006, to conform to the
authoritative FASB guidance (see Note 9 for more information related to the
VIE). The creditors of WM Realty do not have recourse to the general credit of
TechPrecision or Ranor.





Recent
Accounting Pronouncements





In
October 2009, the FASB issued update No. 2009-13 –Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging
Issues Task Force , which provides guidance for identifying separate
deliverables in a revenue-generating transaction where multiple deliverables
exist, and provides guidance for allocating and recognizing revenue based on
those separate deliverables. The guidance is expected to result in more multiple
deliverable arrangements being separable than under current guidance. This
guidance is effective for the Company beginning on April 1, 2011 and is required
to be applied prospectively to new or significantly modified arrangements. The
Company will assess the impact this guidance may have on the consolidated
financial statements.





In August
2009, the FASB issued update No. 2009-05 -Fair Value Measurements and
Disclosures (Topic 820) - Measuring Liabilities at Fair Value.
  The amendments in this update apply to all entities that measure
liabilities at fair value within the scope of Topic 820. The update provides
clarification that in circumstances where a quoted price in an active market for
the identical liability is not available, a reporting entity is required to
measure fair value using one or more of the following valuation techniques that
uses the quoted price of the identical liability when traded as an asset, quoted
prices for similar liabilities or similar liabilities when traded as assets, or
a income or market approach consistent with the principles of Topic 820. The
guidance is effective at October 1, 2009, and the adoption of this amendment did
not have a material impact on the Company’s consolidated financial
statements.





In June
2009, the FASB issued update No. 2009-01 “Topic 105—Generally Accepted Accounting
Principles—amendments based on—Statement of Financial Accounting Standards No.
168—The  FASB Accounting Standards Codificationand the Hierarchy of
Generally Accepted Accounting Principles.”  This Accounting
Standards Update amends the FASB Accounting Standards Codification for the
issuance of FASB Statement No. 168, “TheFASB Accounting Standards
Codification and the Hierarchy of GAAP”. This Accounting Standards Update
includes Statement 168 in its entirety, and establishes the Codification as the
single source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. SEC rules and interpretive releases are also sources
of authoritative GAAP for SEC registrants. This guidance modifies the GAAP
hierarchy to include only two levels of GAAP: authoritative and
non-authoritative. The guidance was effective for the Company as of
September 30, 2009, and did not impact the Company’s results of operations,
cash flows or financial positions. The Company has adjusted historical GAAP
references in its second quarter 2009 Form 10-Q to reflect accounting guidance
references included in the codification.





In June
2009, the FASB amended authoritative guidance for the manner in which entities
evaluate whether consolidation is required for VIEs. A company must first
perform a qualitative analysis in determining whether it must consolidate a VIE,
and if the qualitative analysis is not determinative, must perform a
quantitative analysis. Further, the guidance requires that companies continually
evaluate VIEs for consolidation, rather than assessing based upon the occurrence
of triggering events, and also requires enhanced disclosures about how a
company’s involvement with a VIE affects its financial statements and exposure
to risks. The guidance is effective  beginning April 1, 2010, and
the Company is currently assessing the impact on the consolidated financial
statements.





In May
2009, the FASB issued authoritative guidance to establish general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. In
particular, this guidance  sets forth the period after the balance
sheet date during which management of a reporting entity should evaluate events
or transactions that may occur for potential recognition or disclosure in the
financial statements; the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial
statements; and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. This guidance is
effective for periods ending after June 15, 2009 and its adoption did not
have a material impact on the Company’s consolidated financial
statements.





8





In April
2009, the FASB issued guidance to require disclosure about fair value of
financial instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements. Since this guidance provides only
disclosure requirements, the adoption of this standard did not impact the
results of operations, cash flows or financial positions.





In April
2009, the FASB amended authoritative guidance to determine fair value when the
volume and level of activity for the asset or liability have significantly
decreased and on identifying transactions that are not orderly. This guidance
requires disclosure in interim and annual periods of inputs and valuation
techniques used to measure fair value and a discussion of changes in valuation
techniques.





The
guidance was adopted for the period ended September 30, 2009. The adoption did
not have a material impact on the Company’s consolidated financial statements or
the fair value of its financial assets.





In April
2009, the FASB amended authoritative guidance related to the requirements for
the recognition and measurement of other-than-temporary impairments for debt
securities by modifying the pre-existing “intent and ability” indicator. Under
this guidance, an other-than-temporary impairment is triggered when there is
intent to sell the security, it is more likely than not that the security will
be required to be sold before recovery, or the security is not expected to
recover the entire amortized cost basis of the security. Additionally, this
guidance changes the presentation of other-than-temporary impairment in the
income statement for those impairments involving credit losses. The credit loss
component will be recognized in earnings and the remainder of the impairment
will be recorded in other comprehensive income. The guidance was adopted for the
period ended September 30, 2009 and its adoption did not have a material impact
on the Company’s consolidated financial statements.





NOTE
3 - PROPERTY, PLANT AND EQUIPMENT





As of
December 31, 2009 and March 31, 2009, property, plant and equipment consisted of
the following:





December
      31,
              2009
            
            
            March
      31,
              2009Land
            
            $
            110,113
            
            
            $
            110,113Building
      and improvements
            
            
            1,486,349
            
            
            
            1,486,349Machinery
      equipment, furniture and fixtures
            
            
            4,912,982
            
            
            
            4,006,235Equipment
      under capital leases
            
            
            56,242
            
            
            
            56,242Total
      property, plant and equipment
            
            
            6,565,686
            
            
            
            5,658,939Less:
      accumulated depreciation
            
            
            (3,188,400
            )
            
            
            (2,895,505
            )Total
      property, plant and equipment, net
            
            $
            3,377,286
            
            
            $
            2,763,434





Depreciation
expense for the nine months ended December 31, 2009 and 2008 was $300,599 and
$402,789, respectively. Land and buildings (which are owned by WM Realty, a
consolidated entity, are collateral for the $3,200,000 Amalgamated Bank Mortgage
Loan described in greater detail under Note 6 Long-Term Debt. Other fixed assets
of the Company together with its other personal properties, are collateral for
the Sovereign Bank $4,000,000 secured loan and revolving line of
credit.





The
Company has placed $887,279 of equipment into service during the nine months
ended December 31, 2009 that it had ordered in 2008 and received in January
2009.





NOTE
4 - COSTS INCURRED ON UNCOMPLETED CONTRACTS





The
Company recognizes revenues based upon the units-of-delivery method (see Note
2). The advance billing and deposits include down payments for acquisition
of materials and progress payments on contracts. The agreements with the buyers
of the Company’s products allow the Company to offset the progress payments
against the costs incurred.





As of
December 31, 2009 and March 31, 2009, the Company had deferred revenues totaling
$1,705,345 and $3,945,364, respectively. Deferred revenues represent the
customer prepayments on their contracts.




9





The
following table sets forth information as to costs incurred on uncompleted
contracts as of December 31, 2009 and March 31, 2009:





December
      31,
              2009
            
            
            March
      31,
              2009Cost
      incurred on uncompleted contracts, beginning balance
            
            $
            12,742,217
            
            
            $
            10,633,862Total
      cost incurred on contracts during the period
            
            
            11,219,712
            
            
            
            28,078,982Less
      cost of sales, during the period
            
            
            (19,466,554
            )
            
            
            (25,970,626
            )Cost
      incurred on uncompleted contracts, ending balance
            
            $
            4,495,375
            
            
            $
            12,742,218Billings
      on uncompleted contracts, beginning balance
            
            $
            9,081,416
            
            
            $
            6,335,179Plus:
      Total billings incurred on contracts, during the period
            
            
            15,322,680
            
            
            
            40,833,972Less:
      Contracts recognized as revenue, during the period
            
            
            (23,
      691,616
            )
            
            
            (38,087,735
            )Billings
      on uncompleted contracts, ending balance
            
            $
            712,480
            
            
            $
            9,081,416Cost
      incurred on uncompleted contracts, ending balance
            
            $
            4,495,375
            
            
            $
            12,742,218Billings
      on uncompleted contracts, ending balance
            
            
            (712,480)
            
            
            
            (9,081,416
            )Costs
      incurred on uncompleted contracts, in excess of progress
      billings
            
            $
            3,782,895
            
            
            $
            3,660,802





NOTE
5 - PREPAID EXPENSES





As of
December 31, 2009 and March 31, 2009, the prepaid expenses included the
following:





December
      31, 2009
            
            
            March
      31, 2009Prepayments
      on material purchases
            
            $
            --
            
            
            $
            1,418,510Prepaid
      taxes
            
            
            672,852
            
            
            
            --Insurance
            
            
            115,501
            
            
            
            140,237Other
            
            
            36,394
            
            
            
            24,487Total
            
            $
            824,747
            
            
            $
            1,583,234





NOTE
6 – LONG-TERM DEBT and CAPITAL LEASE OBLIGATION





The
following debt and capital lease obligations were outstanding on December 31,
2009 and March 31, 2009:





December
      31,
              2009
            
            
            March
      31,
              2009Sovereign
      Bank Secured Term Note
            
            $
            1,857,143
            
            
            $
            2,285,715Amalgamated
      Bank Mortgage Loan
            
            
            3,089,573
            
            
            
            3,118,747Capital
      expenditure note, other
            
            
            888,654
            
            
            
            1,098Capital
      Lease
            
            
            33,810
            
            
            
            43,711Total
      long-term debt
            
            
            5,869,180
            
            
            
            5,449,271Principal
      payments due within one year
            
            
            (810,511
            )
            
            
            (624,818
            )Principal
      payments due after one year
            
            $
            5,058,669
            
            
            $
            4,824,453





On
February 24, 2006, Ranor entered into a loan and security agreement with
Sovereign Bank.  Pursuant to the agreement, the bank provided Ranor
with a secured term loan of $4,000,000 (“Term Note”) and also extended to Ranor
a revolving line of credit of up $1,000,000 the (“Revolving
Note”).  On January 29, 2007, the loan and security agreement was
amended, adding a capital expenditure line of credit facility of $3,000,000 to
the above two debt facilities the (“CapEx Note”). Significant terms associated
with the Sovereign debt facilities are summarized below.





Term
Note:





The Term
Note issued on February 24, 2006 has a term of 7 years with an initial fixed
interest rate of 9%.  The interest rate on the Term Note converts from
a fixed rate of 9% to a variable rate on February 28, 2011.  From
February 28, 2011 until maturity the Term Note will bear interest at the Prime
Rate plus 1.5%, payable on a quarterly basis.   Principal is
payable in quarterly installments of $142,857, plus interest, with a final
payment due on March 1, 2013.





10




The Term
Note is subject to various covenants that include the following: the loan
collateral comprises all personal property of the Company, including cash,
accounts receivable inventories, equipment, financial and intangible
assets.  The company must also maintain a ratio of earnings available
to cover fixed charges of at least 120% of the fixed charges for the rolling
four quarters, tested at the end of each fiscal quarter.  Additionally
the Company must also maintain an interest coverage ratio of at least 2.1 at the
end of each fiscal quarter.   As of December 31, 2009, the
Company is in compliance with all debt covenants, except the requirement to
maintain a ratio of earnings to fixed charges of 1.2 to 1 which the Company did
not meet as of December 31, 2009.  The Company has obtained a waiver
of the breach of such covenant from Sovereign Bank/Santander, which waiver
covers the breach that otherwise would have occurred in connection with the
covenant testing for the quarter ended December 31, 2009.  The waiver
does not apply to any future covenant testing dates.  The Company
expects to be in compliance with this covenant as of the next testing period
(which will occur in connection with the end of the Company’s fiscal year ending
March 31, 2010).  In the event of default (which default may occur in
connection with a non-waived breach), the lending bank may choose to accelerate
payment of any amounts outstanding under the Term Note and, under certain
circumstances, the bank may be entitled to cancel the facility.  If
the Company were unable to obtain a waiver for a breach of covenant and the bank
accelerated the payment of any outstanding amounts, such acceleration may cause
the Company’s cash position to deteriorate or, if cash on hand were insufficient
to satisfy any payment due, may require the Company to obtain alternate
financing to satisfy any accelerated payment obligation.





Revolving
Note:





The
Revolving Note bears interest at a variable rate determined as the Prime Rate,
plus 1.5% annually on any outstanding balance.   The borrowing
amount under the Revolving Note has been limited to the sum of 70% of the
Company’s eligible accounts receivable plus 40% of eligible inventory up to a
maximum borrowing limit of $1,000,000.   The agreement has been
amended several times with the effect of increasing the maximum available
borrowing limit to $2,000,000 as of December 31, 2009.  There were no
borrowings outstanding under this facility as of December 31, 2009 and
2008.  The Company pays an unused credit line fee of 0.25% on the
average unused credit line amount in the previous month.  This
facility was renewed with the bank in August 2009.





Capital
Expenditure Note:





The
initial borrowing limit under the Capital Expenditure Note was $500,000 and has
been amended several times resulting in a borrowing limit of $3,000,000
available under the facility as of November 30, 2009.  The facility
was subject to renewal on an annual basis.  On November 30, 2009, the
Company elected not to renew this facility when it terminated as the Company
plans to finance any future equipment financing needs on a specific basis rather
than under a blanket revolving line of credit. Under the facility, the Company
was permitted to borrow 80% of the original purchase cost of qualifying capital
equipment.  The interest rate is LIBOR plus 3%.  The Company
was obligated to make interest only payments monthly on any borrowings through
November 30, 2009 and on December 1, 2009 the outstanding borrowings and
interest were due and payable monthly on a five year amortization
schedule.  There was $888,653 outstanding under this facility at
December 31, 2009.   The Company used the proceeds to finance the
purchase of qualifying equipment placed into service during the current
period.





Mortgage
Loan:





The
mortgage loan is an obligation of WM Realty.  The mortgage has a term
of 10 years, maturing October 1, 2016, and carries an annual interest rate of
6.7% with monthly interest and principal payments of $20,955.  The
amortization is based on a 30 year term.  WM Realty has the right to
repay the mortgage note upon payment of a prepayment premium of 5% of the amount
prepaid if the
prepayment is made during the first two years, and declining to 1% of the amount
prepaid if the prepayment is made during the ninth or tenth year.





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





Capital
Lease:





During
2007, the Company also leased certain office equipment under a non-cancelable
capital lease. This lease will expire in 2012, and future minimum payments under
this lease for annual periods ending on December 31, 2010 are $13,913, for 2011
- $14,772, and $5,124 through April 2012. Interest payments included in the
above total $2,506 and the present value of all future minimum lease payments
total $33,810. Lease payments for capital lease obligations for the nine months
ended December 31, 2009 totaled $11,673.




11




As of
December 31, 2009, the maturities of long-term debt and capital leases were as
follows:





Year
      ending December 31,2010
            
            $
            810,5112011
            
            
            814,0002012
            
            
            807,4592013
            
            
            377,0912014
            
            
            207,152Due
      after 2014
            
            
            2,852,967Total
            
            $
            5,869,180





NOTE
7 – OPERATING LEASES





Ranor,
Inc. has leased its manufacturing, warehouse and office facilities in
Westminster, Massachusetts from WM Realty, a variable interest entity, for a
term of 15 years, commencing February 24, 2006. For each nine month period ended
December 30, 2009 and 2008, respectively the Company’s rent expense equaled
$337,500. Since the Company consolidated the operations of WM Realty, the rental
expense is eliminated in consolidation, the building is carried at cost and
depreciation is expensed. The annual rent is subject to an annual increase based
on the increase in the consumer price index.





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





The
Company previously leased approximately 12,720 square feet of manufacturingspace in Fitchburg,
Massachusetts from an unaffiliated lessor. The rent expense for the Fitchburg
facility was $0 and $42,865 for the nine months ended December 31, 2009 and
2008, respectively.  The lease provided for rent at the annual rate of
$50,112 with 3% annual increases, starting 2004. The lease expired in February
2009 and was not renewed.





On
February 24, 2009, the Company entered into a lease for 2,089 square feet of
office space in Centreville, Delaware.  The lease has a three-year
term and provides for initial rent of $2,500 per month, escalating to $3,220 per
month in year two and $3,395 per month in year three of the
lease.  The Company has the option to renew this lease for a period of
three years at the end of the lease term. During the nine months ended December
31, 2009 the Company’s rent expense with respect to the Delaware property was
$22,500.





Future
minimum lease payments required under operating leases in the aggregate at
December 31, 2009 totaled $86,880. The totals for each annual period ending on
December 31 are: 2010 - $36,480, 2011 - $40,215, and 2012 -
$10,185.





NOTE
8 - INCOME TAXES





For the
three and nine months ended December 31, 2009 and 2008, the Company recorded a
Federal and State income tax (benefit) expense of $(276,415) and $954,562, and
$90,288 and $3,890,780, respectively. The estimated annual effective tax rates
for the nine months ended December 31, 2009 and December 31, 2008 were 26.2% and
43.4%, respectively. The difference between the provision for income taxes and
the income tax determined by applying the statutory federal income tax rate of
34% was due primarily to differences in the lives and methods used to depreciate
and/or amortize our property and equipment, timing differences of expenses
related compensated absences, net operating loss carryforwards, and operating
losses that occurred during the period.  In addition, the 2009
provision was reduced by a recognized deferred tax asset and federal tax refund
totaling $287,487.





As of
December 31, 2009, the Company’s federal net operating loss carry-forward was
approximately $1.7 million. If not utilized, the federal net operating loss
carry-forward of Ranor and TechPrecision will expire in 2025 and 2027,
respectively. Furthermore, because of over fifty percent change in ownership as
a consequence of the reverse acquisition in February 2006, as a result of the
application of Section 382 of the Internal Revenue Code, the amount of net
operating loss carry forward used in any one year in the future is substantially
limited.





NOTE
9 - RELATED PARTY TRANSACTIONS





Sale
and Lease Agreement and Intercompany Receivable





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




12







On
October 4, 2006, WM Realty placed a new mortgage of $3.2 million on the property
and the then existing mortgage of $3.1 million was paid off. The new mortgage
has a term of ten years, bears interest at 6.75% per annum, and provides for
monthly payments of principal and interest of $20,595 (See Note 6). In
connection with the new mortgage, Andrew Levy, the managing member of WM Realty,
executed a limited guaranty pursuant to which Mr. Levy guaranteed the lender the
payment of any loss resulting from WM Realty’s fraud or misrepresentation in
connection with the loan documents, misapplication of rent and insurance
proceeds, failure to pay taxes and other defaults resulting from his or WM
Realty’s misconduct.





The only
assets of WM Realty available to settle its obligations are $53,556 of cash and
real property acquired from Ranor, Inc. at a cost of $3,000,000 less $343,892 of
accumulated depreciation.  The real property has a net carrying cost
of $1,127,755 on TechPrecision’s consolidated balance sheet. The only liability
of WM Realty is the carrying amount of mortgage payable to Amalgamated Bank for
$3,089,573.  Amalgamated Bank, the sole creditor of WM realty, has no
recourse to the general credit of TechPrecision.





Distribution to WM Realty
Members





WM Realty
had a deficit equity balance of $315,887 on December 31, 2009. During the three
and nine months ended December 31, 2009, WM Realty had a net income of $34,555
and $98,614, and capital distributions of $48,374 and $140,622.





NOTE
10 - CAPITAL STOCK





Preferred
Stock





The
Company has 10,000,000 authorized shares of preferred stock and the board of
directors has broad power to create one or more series of preferred stock and to
designate the rights, preferences, privileges and limitation of the holders of
such series. The board of directors has created one series of preferred stock -
the Series A Convertible Preferred Stock.





Each
share of Series A Convertible Preferred Stock was initially convertible into one
share of common stock. As a result of the failure of the Company to meet the
levels of earnings before interest, taxes, depreciation and amortization for the
years ended March 31, 2006 and 2007, the conversion rate changed, and, at
December 31, 2009, each share of Series A Convertible Preferred Stock was
convertible into 1.3072 shares of common stock, with an effective conversion
price of $0.218.  Based on the current conversion ratio, there were
12,629,489 common shares underlying the Series A Convertible Preferred Stock as
of December 31, 2009





In
February 2006, Series A Convertible Preferred Stock (7,719,250 shares) and
warrants to purchase a total of 11,220,000 shares of common stock were issued
pursuant to a securities purchase agreement dated February 24,
2006.  Contemporaneously with the securities purchase agreement, the
Company entered into a registration rights agreement with the investor, pursuant
to which it agreed to register the shares of common stock underlying the
securities in accordance with a schedule. The registration statement was not
declared effective in accordance with the original schedule, and the Company
issued 33,212 shares of Series A Convertible Preferred Stock to the investor as
liquidated damages.





In
addition to the conversion rights described above, the certificate of
designation for the Series A Convertible Preferred Stock provides that the
holder of the Series A Convertible Preferred Stock or its affiliates will not be
entitled to convert the Series A Convertible Preferred Stock into shares of
common stock or exercise warrants to the extent that such conversion or exercise
would result in beneficial ownership by the investor and its affiliates of more
than 4.9% of the shares of common stock outstanding after such exercise or
conversion. This provision cannot be amended.





The
holders of the Series A Convertible Preferred Stock have no voting rights. No
dividends are payable with respect to the Series A Convertible Preferred Stock
and no dividends are payable on common stock while Series A Convertible
Preferred Stock is outstanding. The common stock will not be redeemed while
preferred stock is outstanding. Upon any liquidation the Company is required to
pay $0.285 for each share of Series A Convertible Preferred Stock. The payment
will be made before any payment to holders of any junior securities and after
payment to holders of securities that are senior to the Series A Convertible
Preferred Stock.





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





On August
14, 2009, our Board adopted a resolution authorizing and directing that the
designated shares of Series A convertible Preferred Stock be increased from
9,000,000 to 9,890,980.




13




On August
14, 2009, the Company entered into a warrant exchange agreement pursuant to
which the Company agreed to issue 3,395,472 shares of Series A convertible
preferred stock to certain investors in exchange for warrants to purchase
9,320,000 shares of common stock. The warrants had initial exercise prices
ranging from $0.57 to $0.86 per share. As a result of the Company’s failure to
meet the EBITDA per share targets for the years ended March 31, 2006 and 2007,
the range of exercise prices per share of the warrants were reduced to $.44 to
$.65. Effective September 11, 2009, the warrants were surrendered to the
Company, the Company filed an amendment to its certificate of designation
relating to its Series A convertible Preferred Stock to increase the number of
designated shares of Series A convertible preferred stock, and the 3,595,472
shares of Series A Convertible Preferred Stock were issued pursuant to the terms
of the warrant exchange agreement.  All warrants surrendered in
connection with the warrant exchange were cancelled.





In a
shareholder transaction on October 5, 2009, 229,498 shares of Series A
Convertible Preferred Stock were converted into 300,000 shares of common stock.
The Company had 9,661,482 and 6,295,908 shares of Series A Convertible Preferred
Stock outstanding at December 31, 2009 and March 31, 2009,
respectively.





Common
Stock and Warrants





The
Company had 90,000,000 authorized common shares at December 31, 2009 and March
31, 2009 and had 14,230,846 and 13,907,513 shares of common stock outstanding at
December 31, 2009 and March 31, 2009, respectively. The Company issued 20,000
and 3,333 shares of common stock in connection with the exercise of stock
options on August 20 and September 30, 2009, respectively. On October 5, 2009,
the Company issued 300,000 shares of common stock in connection with a Series A
conversion.





On August
14, 2009, the Company completed a transaction with two shareholders resulting in
the issuance of 3,395,472 Series A preferred shares in exchange for the
surrender of 9,320,000 warrants.   Subsequent to the exchange,
all of the 9,320,000 warrants were cancelled by the Company. At December 31,
2009, the Company had 112,500 warrants issued and outstanding.





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





NOTE
11 - SHARE BASED COMPENSATION





In 2006,
the directors adopted, and the stockholders approved, the 2006 long-term
incentive plan (the “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 Plan is to be administered by a
committee of not less than two directors each of whom is to be an independent
director. In the absence of a committee, the plan is administered by the board
of directors. Independent directors are not eligible for discretionary options.
Pursuant to the Plan, each newly elected independent director received at the
time of his election, a five-year option to purchase 50,000 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, 2009, with
respect to directors in office in July 2006 and commencing on July 1 coincident
with or following the third anniversary of the date of his or her first
election.  These options are exercisable in
installments.  Pursuant to the Plan, in July 2006, the Company granted
non-qualified stock options to purchase an aggregate of 150,000 shares of common
stock at an exercise price of $.285 per share, which was determined to be the
fair market value on the date of grant, to the three independent
directors.





On April
1, 2007, the Company granted options to purchase 221,659 shares of common stock
at an exercise price of $.285 to the employees. The company shares did not trade
in the market and had no intrinsic value at the date of grant.  It was
not possible to reasonably estimate fair market value at the grant date.
Therefore, fair value was measured at intrinsic value under FASB ASC
718-20.





On
October 1, 2008, the Company granted options to purchase 22,500 shares of common
stock at an exercise price of $1.31 per share to its independent
directors.  The grant provided for 13,500 shares to vest immediately
on the grant date and the remaining 9,000 shares vest in two installments of
4,500 each on the first and second anniversary of the grant date.  The
options are not covered under the plan.





On March
23, 2009, the Company entered into an employment agreement with the Company’s
CFO, pursuant to which, he was granted an option to purchase 150,000 shares of
common stock options at an exercise price of $0.49 per share, the fair market
value on the date of grant.  The options will vest in equal amounts of
50,000 over three years on the anniversary of the date of this
agreement.  Pursuant to the terms of the employment agreement, the
option exercise price was determined based upon the market price of the
Company’s common stock as of the date of grant. Any future option grants will be
in the sole discretion of the Board.




14




On July
1, 2009, the Company granted stock options to three directors to purchase 15,000
shares of common stock at an exercise price of $0.50 per share, pursuant to the
plan provision following the third anniversary date of each director’s first
election to the board. The shares were measured on the grant date and had a fair
market value of $6,900.





On
October 15, 2009, the Company granted options to purchase 50,000 shares of
common stock at an exercise price of $0.80 per share to a new independent
director.  The grant provided for 30,000 shares to vest immediately on
the grant date, and 10,000 shares each on October 14, 2010 and October 14,
2011.  The Company recorded $18,441 of compensation expense on the
grant date.





The fair
value was estimated using the Black-Scholes option-pricing model based on the
closing stock prices at the grant date and the weighted average assumptions
specific to the underlying options. Expected volatility assumptions are based on
the historical volatility of our common stock. The risk-free interest rate was
selected based upon yields of five year U.S. Treasury issues. The expected life
of the option was estimated at one half of the contractual term of the option
and the vesting period. The assumptions utilized for option grants during the
periods presented ranged from 179% to 193% for volatility, a risk free interest
rate of 2.4%, and expected life of five years.  At December 31, 2009,
426,826 shares of common stock were available for grant under the
Plan.





The
following table summarizes information about options which are fully vested,
currently exercisable and expected to vest at December 31, 2009:





Number
      Of
            
            
            Weighted
              Average
            
            
            Aggregate
              Intrinsic
            Weighted
      Average Remaining
              Contractual
      LifeOptions
            
            
            Exercise
      Price
            
            
            Value
            (in
      years)Outstanding
      at 3/31/2009
            
            
            544,159
            
            
            $
            0.384Granted
            
            
            65,000
            
            
            $
            0.731Forfeited
            
            
            (9,999)
            
            
            $
            0.285Exercised
            
            
            (23,333)
            
            
            $
            0.285
            
            
            $
            6,650Outstanding
      at 12/31/2009
            
            
            575,827
            
            
            $
            0.429
            
            
            $
            257,554
            
            4.29Outstanding
      but not vested 12/31/2009
            
            
            179,000
            
            
            $
            0.517
            
            
            $
            55,000
            
            3.54Exercisable
      and vested at 12/31/2009
            
            
            396,827
            
            
            $
            0.367
            
            
            $
            203,554
            
            4.26





As of
December 31, 2009 there was $26,000 of total unrecognized compensation cost
related to non vested stock options. These costs are expected to be recognized
over three years. No shares fully vested during the nine months ended
December 31, 2009.





NOTE
12 - CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS





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





At
December 31, 2009, there were receivable balances outstanding from three
customers comprising 57% of the total receivables balance; the largest balance
from a single customer represented 33% of our receivables balance, while the
smallest balance from a single customer making up this group was
11%.  The Company recorded bad debt expense of $234,999 in connection
with a single customer who has failed to make any payments for goods purchased
during the 2009 calendar year.  The Company is pursuing legal action
to recover the balance due from this customer.  However, it cannot be
determined at this time if those legal collection efforts will be
successful.





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





The
following table sets forth information as to revenue derived from those
customers who accounted for more than 10% of our revenue in the nine months
ended December 31, 2009 and 2008:





Nine
      Months Ended December 31,2009
            
            
            2008Customer
            
            
            Dollars
            
            
            Percent
            
            
            Dollars
            
            
            PercentA
            
            
            $
            11,717,071
            
            
            
            49%
            
            
            $
            20,821,102
            
            
            
            62%B
            
            
            
            3,853,692
            
            
            
            16%
            
            
            
            3,879,514
            
            
            
            11%





15




During
April 2009, the Company’s largest customer, GT Solar, provided notice of its
intent to cancel a majority of their open purchase orders reducing their total
purchase commitment as of March 31, 2009 by approximately $16.8
million.  During the quarter ended September 30, 2009, the Company
completed the sale of $8.9 million of inventory material to GT Solar as part of
the cancellation.  As of December 31, 2009, the Company had remaining
open purchase orders of $1.6 million from GT Solar, included in its backlog of
$15.7 million.





NOTE
13 EARNINGS PER SHARE (“EPS”)





Basic EPS
is computed by dividing reported earnings available to stockholders by the
weighted average shares outstanding. Diluted EPS includes the effect of dilutive
potential common shares. The following table provides a reconciliation of the
numerators and denominators reflected in the basic and diluted earnings per
share computations, as required.




Three
      months ended
            
            
            Nine
      months endedDecember
      31,
            
            
            December
      31,2009
            
            
            2008
            
            
            2009
            
            
            2008Basic
      EPSNet
      income
            
            $
            204,697
            
            
            $
            1,013,229
            
            
            $
            1,400,586
            
            
            $
            5,061,025Weighted
      average number of shares outstanding
            
            
            14,214,542
            
            
            
            13,907,094
            
            
            
            14,013,210
            
            
            
            13,569,513Basic
      income per share
            
            $
            0.01
            
            
            $
            0.07
            
            
            $
            0.10
            
            
            $
            0.37Diluted
      EPSNet
      income
            
            $
            204,697
            
            
            $
            1,013,229
            
            
            $
            1,400,586
            
            
            $
            13,569,513Dilutive
      effect of stock options, warrants and preferred stock
            
            
            7,233,691
            
            
            
            10,511,021
            
            
            
            6,201,092
            
            
            
            12,765,907Diluted
      weighted average shares
            
            
            21,448,233
            
            
            
            24,418,115
            
            
            
            20,214,302
            
            
            
            26,335,421Diluted
      income per share
            
            $
            0.01
            
            
            $
            0.04
            
            
            $
            0.07
            
            
            $
            0.19





NOTE
14 SUBSEQUENT EVENTS





On
January 8, the Company issued a purchase order to purchase new machinery and
equipment for $2.3 million. The Company has committed to make three equal
payments: the first payment was made in January 2010, the second payment will be
made in April or May of 2010, and the final payment will be made upon final
delivery approximately one year from the purchase order date. The Company
intends to borrow up to 80% of the purchase price in order to finance these
payments.





On
January 19, 2010, the Company received a purchase order totaling $3.8 million
from its largest customer, GT Solar.  This was the first new purchase
order placed by GT Solar since it cancelled the majority of its open purchase
orders in April 2009.  As of January 31, 2010 the Company’s order
backlog was $18.1 million.





On
January 29, 2010, the Company’s Board of Directors approved two stock option
grants of 100,000 options each for the Company’s interim Chief Executive
Officer.  The stock option grants had an exercise price of $0.84 per
share, the market price of the Company’s shares on the date of
grant.   The first grant of 100,000 shares fully vests on March
31, 2010 and the second grant of 100,000 will vest upon the appointment of a
full time Chief Executive Officer.   The Board of Directors also
extended the interim Chief Executive Officer’s contract from March 31, 2010
through June 30, 2010.





16




Item
2.   Management’s Discussion and Analysis of Financial Condition and
Results of Operations





Statement
Regarding Forward Looking Disclosure





The
following discussion of the results of our operations and financial condition
should be read in conjunction with our financial statements and the related
notes, which appear elsewhere. This quarterly report of on Form 10-Q, including
this section entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” may contain predictive or “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include, but are not limited to, statements
that express our intentions, beliefs, expectations, strategies, predictions or
any other statements relating to our future activities or other future events or
conditions. These statements are based on current expectations, estimates and
projections about our business based in part on assumptions made by management.
These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Therefore, actual
outcomes and results may, and probably will, differ materially from what is
expressed or forecasted in the forward-looking statements due to numerous
factors. Those factors include those risks discussed under “Management’s
Discussion and Analysis” in our Form 10-K for the year ended March 31, 2009 and
this Item 2 in this Form 10-Q for the quarter ended December 31, 2009 and those
described in any other filings which we make with the SEC. In addition, such
statements could be affected by risks and uncertainties related to the U.S. and
global economies, to our ability to generate business on an on-going business,
to obtain any required financing, to receive contract awards from the
competitive bidding process, maintain standards to enable us to manufacture
products to exacting specifications, enter new markets for our services, market
and customer acceptance, our reliance on a small number of customers for a
significant percentage of our business, competition, government regulations and
requirements, pricing and development difficulties, our ability to make
acquisitions and successfully integrate those acquisitions with our business, as
well as general industry and market conditions and growth rates, and general
economic conditions. We undertake no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances that may arise
after the date of this report, except as required by applicable
law.





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




Overview





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





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





During
the last several years, the demand for our services has been relatively
strong. However, during the Company’s third quarter ended December 31, 2008,
recessionary pressures began to impact the requirements of our
customers.  GT Solar, which has been our largest customer for each of
the past three fiscal years, slowed production significantly during the second
half of the fiscal year ended March 31, 2009 and in April 2009, canceled
the majority of its outstanding purchase orders.   During the past
fourteen months, other customers have delayed deliveries of existing orders and
have delayed the placement of new orders.   Recently we have
begun to see an improvement in the volume of requests for quotes and order
placements from our customers.  We ended the third quarter with an
order backlog of $15.7 million as of December 31, 2009 and our order backlog
increased further during January 2010 to $18.1 million as of January 31,
2010.   On January 19, 2010 our largest customer, GT Solar placed
an order for increased production totaling $3.8 million.  This is the
first new purchase order we have received from GT Solar since they cancelled the
majority of their open purchase orders with the Company back in April
2009.





A
significant portion of our revenue is generated by a small number of customers.
During the nine months ended December 31, 2009, our largest customer, GT Solar,
accounted for approximately 50% of our revenue and our second largest customer,
BAE Systems, accounted for approximately 16% of our revenue, while all other
customers made up less than 10% of our revenue on an individual basis. For the
nine months ended December 31, 2008, our largest customer, GT Solar, accounted
for 62% of our revenue.





17




Our
contracts are generated both through negotiation with customers and from bids
made pursuant to requests for proposals. Our ability to receive contract awards
is dependent upon the contracting party’s perception of such factors as our
ability to perform on time, our history of performance, our financial condition
and our ability to price our services competitively.  Although some of
our contracts contemplate the manufacture of one or a limited number of units,
we are seeking more long-term projects with a more predictable cost structure.
During the nine months ended December 31, 2009, our sales and net income were
$23.7 million and $1.4 million, as compared to sales of $33.8 million and net
income of $5.1 million, for the nine months ended December 31,
2008.  Our gross margin for the nine months ended December 31, 2009
was 18% as compared to 33% in the nine months ended December 31, 2008,
reflecting higher overhead absorption on lower sales volume and reduced
capacity.  Both net sales and gross margin declined in the nine months
ended December 31, 2009, and the global economic downturn continues to have an
adverse impact on our customers.  In August 2009, we completed the
transfer of inventory to GT Solar as part of their April 2009
cancellation.  Accordingly, our revenue for the nine month period
ended December 31, 2009, includes $8.9 million of revenue related to materials
transferred to GT Solar as part of their order
cancellation.   The inventory transfer included a heavy mix of
raw materials and therefore carried a lower margin than we typically generate
through the sale of finished products.





Because
our revenues are derived from the sale of goods manufactured pursuant to a
contract, and we do not sell from inventory, it is necessary for us to
constantly seek new contracts. There may be a time lag between our completion of
one contract and commencement of work on another contract. During such a period,
we would continue to incur overhead expense while generating lower revenue.
Furthermore, changes in either the scope of a contract or the delivery schedule
may impact the revenue we receive under the contract and the allocation of
manpower.





As of
December 31, 2009, we had a backlog of orders totaling approximately $15.7
million, of which approximately $1.6 million represented orders from GT
Solar.  Our corresponding backlog as of December 31, 2008 was $40.0 million
of which GT Solar represented 73%.  As of January 31, 2010, the
Company’s backlog was $18.1 million, including open purchase orders totaling
$4.7 million from GT Solar.





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





Growth
Strategy





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





Diversifying
Our Core Industries





We
believe that rising energy demands along with increasing environmental concerns
are likely to continue to drive demand in the alternative energy industry,
particularly the solar, wind and nuclear power industries. Because of our
capabilities and the nature of the equipment required by companies in the
alternative energy industries, we intend to focus our services in this
sector.  We also expect to market our services for medical device
applications where customer requirements demand strict tolerances and an ability
to manufacture complex heavy equipment.





As a
result of both the increased prices of oil and gas and the resulting greenhouse
gas emissions, nuclear power may become an increasingly important source of
energy. In January 2010, the Obama administration increased the level of
government-backed debt guarantees from $18 billion to $56 billion as an
incentive to support the construction of new nuclear plants in the U.S. Revenues
derived from the nuclear power industry were $1.6 million for the nine months
ended December 31, 2009 and currently constitute approximately 9% of our
backlog. Because of our manufacturing capabilities, our certification from the
American Society of Mechanical Engineers and our historic relationships with
suppliers in the nuclear power industry, we believe that we are well positioned
to benefit from any increased activity in the nuclear sector. However, we cannot
assure you that we will be able to develop any significant business from the
nuclear industry.





In
addition to the nuclear energy industry, we are also exploring potential
business applications focused on the medical industry.  These efforts
include the development and fabrication of medical isotopes storage solutions
and the development and fabrication of critical components for proton beam
therapy machines designed to be utilized in the treatment of
cancer.  Net sales from our proton beam therapy customer accounted for
4% of our total net sales for the nine months ended December 31, 2009 while
sales to our medical isotope customer were not significant during the nine
months ended December 31, 2009.




18




Expansion
of Manufacturing Capabilities





In
addition to the possible expansion of our existing manufacturing capabilities,
we may, from time to time, pursue opportunistic acquisitions to increase and
strengthen our manufacturing, marketing, product development capabilities and
customer diversification.  We do not have any current plans for any
acquisition, and we cannot give any assurance that we will complete any
acquisition. On January 8, 2010, the Company issued a purchase order for the
purchase of a gantry mill totaling $2.3 million. This purchase commitment
represents an investment necessary to refresh and upgrade the Company’s fleet of
manufacturing equipment and capabilities.  With this purchase
commitment, the Company is obligated to make three equal payments: the first
payment was made in January 2010, the second payment will be made in April or
May of 2010, and the final payment will be made upon final delivery
approximately one year from the purchase order date. The Company intends to
borrow up to 80% of the purchase price in order to finance these
payments.





Impact
of Recent Legislation





The
Congress has passed and the President has signed the $800 billion American
Recovery and Reinvestment Act of 2009 into law. Significant components of the
bill allow manufacturing concerns to apply various tax credits and apply for
government loan guarantees for the development or retooling of existing
facilities using electricity derived from renewable and previously underutilized
sources.  The Company has historically derived significant revenues
from contracts with manufacturing concerns in these alternative energy
fields.  The American Recovery and Reinvestment Act extended the 50%
Bonus depreciation enacted as a part of the Economic Stimulus Act of
2008.  Under the Act, 50% of the basis of the qualified property may
be deducted in the year the property is placed in service (i.e. 2008 and
2009).  The remaining 50% is recovered under otherwise applicable
depreciation rules. This significant tax incentive could drive increased demand
on the part of some customers.





Critical
Accounting Policies





The
preparation of the Company’s financial statements in conformity with generally
accepted accounting principles in the United States requires our management to
make assumptions, estimates and judgments that affect 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 financial statements for the three and
nine months ended December 31, 2009 from the assumptions, estimates and
judgments used in the preparation of our audited financial statements for the
year ended March 31, 2009.





Revenue
Recognition and Costs Incurred





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





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





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





Variable
Interest Entity





We have
consolidated WM Realty, a variable interest entity from which we lease our real
estate.




19




Income
Taxes





We
provide for federal and state income taxes currently payable, as well as those
deferred because of temporary differences between reporting income and expenses
for financial statement purposes versus tax purposes. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Deferred tax
assets and liabilities are measured using the enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recoverable. The effect of the change in the tax rates is
recognized as income or expense in the period of the change. A valuation
allowance is established, when necessary, to reduce deferred income taxes to the
amount that is more likely than not to be realized.





As of
December 31, 2009, the Company’s federal net operating loss carry-forward was
approximately $2 million. If not utilized, the federal net operating loss
carry-forward of Ranor and TechPrecision will expire in 2025 and 2027,
respectively. Furthermore, because of the over fifty-percent change in ownership
as a consequence of the reverse acquisition in February 2006, the amount of net
operating loss carry forward used in any one year in the future is substantially
limited.





New
Accounting Pronouncements





See Note
2, Significant Accounting Policies, in the Notes to the Consolidated Financial
Statements.





Results
of Operations





Our
results of operations are affected by a number of external factors including the
availability of raw materials, commodity prices (particularly steel), macro
economic factors, including the availability of capital that may be needed by
our customers, and political, regulatory and legal conditions in the United
States and foreign markets.





Our
results of operations are also affected by a number of other factors including,
among other things, success in booking new contracts and when we are able to
recognize the related revenue, delays in customer acceptances of our products,
delays in deliveries of ordered products and our rate of progress in the
fulfillment of our obligations under our contracts. A delay in deliveries or
cancellations of orders would cause us to have inventories in excess of our
short-term needs, and may delay our ability to recognize, or prevent us from
recognizing, revenue on contracts in our order backlog.





Recent
disruptions in the global capital markets have resulted in reduced availability
of funding worldwide and a higher level of uncertainty experienced by some
end-user solar cell module manufacturers. As a result, our customers have made
reductions in their direct labor workforce and reported decreases in their order
backlogs as well as adjustments to the procurement of materials in their
photovoltaic related production.  In April, 2009, GT Solar, our
largest customer cancelled the majority of their open purchase orders with us
and in August 2009 we completed the material transfer of $8.9 million to GT
Solar to finalize the order cancellation.  While we have open orders
and backlog with GT Solar they are not at comparable levels prior to the
cancellation. On January 19, 2010, we received an order from GT Solar for $3.8
million of new production. This is the first new production order we have
received from GT Solar since their April 2009 cancellation of a majority of
their then open purchase orders.





Three
Months Ended December 31, 2009 and 2008





The
following table sets forth information from our statements of operations for the
three months ended December 31, 2009 and 2008, in dollars and as a percentage of
revenue (dollars in thousands):





Changes
      Three MonthsEnded
      December 312009
            
            
            2008
            
            
            2009
      to 2008Amount
            
            
            Percent
            
            
            Amount
            
            
            Percent
            
            
            Amount
            
            
            PercentNet
      sales
            
            $
            5,255
            
            
            
            100
            %
            
            $
            8,555
            
            
            
            100
            %
            
            $
            (3,300
            )
            
            
            (39
            )%Cost
      of sales
            
            
            4,241
            
            
            
            81
            %
            
            
            5,933
            
            
            
            69
            %
            
            
            (1,692
            )
            
            
            (29
            )%Gross
      profit
            
            
            1,014
            
            
            
            19
            %
            
            
            2,622
            
            
            
            31
            %
            
            
            (1,608
            )
            
            
            (61
            )%Payroll
      and related costs
            
            
            359
            
            
            
            7
            %
            
            
            331
            
            
            
            4
            %
            
            
            28
            
            
            
            8
            %Professional
      expense
            
            
            104
            
            
            
            2
            %
            
            
            63
            
            
            
            1
            %
            
            
            41
            
            
            
            65
            %Selling,
      general and administrative
            
            
            527
            
            
            
            10
            %
            
            
            145
            
            
            
            2
            %
            
            
            382
            
            
            
            263
            %Total
      operating expenses
            
            
            990
            
            
            
            19
            %
            
            
            539
            
            
            
            6
            %
            
            
            451
            
            
            
            84
            %Income
      from operations
            
            
            24
            
            
            
            0
            %
            
            
            2,083
            
            
            
            24
            %
            
            
            (2,059
            )
            
            
            (99
            )%Interest
      expense
            
            
            (108
            )
            
            
            (2)
            %
            
            
            (111
            )
            
            
            (1
            )%
            
            
            3
            
            
            
            3
            %Other
      income (expense)
            
            
            12
            
            
            
            0
            %
            
            
            (4
            )
            
            
            0
            %
            
            
            16
            
            
            
            400
            %Income
      before income taxes
            
            
            (72
            )
            
            
            (1)
            %
            
            
            1,968
            
            
            
            23
            %
            
            
            (2,040
            )
            
            
            (104
            )%Income
      tax expense (benefit)
            
            
            (276
            )
            
            
            (5)
            %
            
            
            955
            
            
            
            (11
            )%
            
            
            (1,231
            )
            
            
            (129
            )%Net
      income
            
            $
            204
            
            
            
            4
            %
            
            $
            1,013
            
            
            
            12
            %
            
            $
            (809
            )
            
            
            (80
            )%





20





Net
Sales





Net sales
decreased by $3.3 million, or 39%, from $8.5 million for the three months
ended December 31, 2008 to $5.2 million for the three months ended December 31,
2009.  Net sales were negatively impacted by the global recession and
downturn in the solar industry which affected orders from our largest customer,
GT Solar.





Cost
of Sales and Gross Margin





Our cost
of sales for the three months ended December 31, 2009 decreased by $1.7
million to $4.2 million, or 29%, from $5.9 million for the three
months ended December 31, 2008. The decrease in the cost of sales was
principally due to the impact of lower order levels from customers due to the
global recession and downturn in the solar industry. The decline in gross profit
margin was $1.6 million, or 61%, from $2.6 million or 31% of net sales,
during the three months ended December 31, 2008 to $1.0 million or 19% of sales
for the period ending December 31, 2009.  Contributing to the decline
in gross margin were costs associated with underutilized capacity.  In
addition, the mix of completed projects during the three month period ended
December 31, 2009 included a higher percentage of projects in which the
customers supplied raw materials and therefore did not include material
procurement services from the Company.





Operating
Expenses





Our
payroll and related costs were $358,841 for the three months ended December 31,
2009 as compared to $330,701 for the three months ended December 30, 2008. The
$28,140 (8%) increase in payroll is due primarily to an increase in
compensation compared to the same three month period in the prior
year.





Professional
fees increased from $63,847 for the three months ended December 31, 2008 to
$104,132 for the three months ended December 31, 2009. This increase was
primarily attributable to an increase in legal and accounting costs related to
contract reviews and various SEC filing requirements.





Selling,
administrative and other expenses for the three months ended December 31, 2009
were $527,133 compared to $144,825 for three months ended December 31,
2008, an increase of $382,308.  Primary components of the increase
were additional expenditures related to bad debt expense of $235,000 during the
quarter, increased consulting fees totaling $75,000, and increased employee
compensation costs of $72,000.





Interest
Expense





Interest
expense decreased for the three months ended December 31, 2009 to $108,049
compared with $111,052 for the three months ended December 31, 2008 due to lower
average levels of long-term debt during the period.





Income
Taxes





For the
three months ended December 31, 2009, the Company recorded a tax benefit of
$276,415 while during the comparable period in 2008, the Company recorded a
provision for Federal and state income tax expense of $954,562. The estimated
annual effective income tax rate for the current fiscal year is 26%. The
effective tax expense rate for the three months ended December 31, 2008 was 43%.
The difference between the provision for income taxes and the income tax
determined by applying the statutory federal income tax rate of 34% was due
primarily to differences in the lives and methods used to depreciate and/or
amortize our property and equipment, timing differences of expenses related to
compensated absences, and the expected utilization of net operating loss
carryforwards. The Company also recognized a deferred tax asset and a federal
tax refund during the three month period ended December 31, 2009, which reduced
the tax provision by $287,487.





Net
Income





As a
result of the foregoing, our net income was $204,697 or $0.01  and
$0.01 per share basic and diluted, respectively, for the three months ended
December 31, 2009, as compared to net income of $1.0 million or $0.07 and
$.0.04 per share basic and diluted, respectively, for the three months ended
December 31, 2008.


21





Results
of Operations for the Nine Months Ended December 31, 2009 and 2008





The
following table sets forth information from our statements of operations for the
nine months ended December 31, 2009 and 2008, in dollars and as a percentage of
revenue (dollars in thousands):




Changes
      Nine Months Ended2009
            
            
            2008
            
            
            December
      31, 2009 to 2008Amount
            
            
            Percent
            
            
            Amount
            
            
            Percent
            
            
            Amount
            
            
            PercentNet
      sales
            
            $
            23,692
            
            
            
            100
            %
            
            $
            33,814
            
            
            
            100
            %
            
            $
            (10,122
            )
            
            
            (30
            )%Cost
      of sales
            
            
            19,467
            
            
            
            82
            %
            
            
            22,798
            
            
            
            67
            %
            
            
            (3,331
            )
            
            
            (15
            )%Gross
      profit
            
            
            4,225
            
            
            
            18
            %
            
            
            11,016
            
            
            
            33
            %
            
            
            (6,791
            )
            
            
            (62
            )%Payroll
      and related costs
            
            
            1,083
            
            
            
            5
            %
            
            
            1,088
            
            
            
            3
            %
            
            
            (5
            )
            
            
            (0
            )%Professional
      expense
            
            
            291
            
            
            
            1
            %
            
            
            184
            
            
            
            1
            %
            
            
            107
            
            
            
            58
            %Selling,
      general and admin
            
            
            1,052
            
            
            
            4
            %
            
            
            434
            
            
            
            1
            %
            
            
            618
            
            
            
            142
            %Total
      operating expenses
            
            
            2,426
            
            
            
            10
            %
            
            
            1,706
            
            
            
            5
            %
            
            
            720
            
            
            
            42
            %Income from
      operations
            
            
            1,799
            
            
            
            8
            %
            
            
            9,310
            
            
            
            28
            %
            
            
            (7,511
            )
            
            
            (81
            )%Interest
      (expense)
            
            
            (320
            )
            
            
            (2
            )%
            
            
            (345
            )
            
            
            (1
            )%
            
            
            25
            
            
            
            7
            %Other
      income (expense)
            
            
            12
            
            
            
            0
            %
            
            
            (13
            )
            
            
            (0
            )%
            
            
            25
            
            
            
            192
            %Income
      before income taxes
            
            
            1,491
            
            
            
            6
            %
            
            
            8,952
            
            
            
            27
            %
            
            
            (7,461
            )
            
            
            (83
            )%Provision
      for income taxes
            
            
            90
            
            
            
            0
            %
            
            
            3,891
            
            
            
            12
            %
            
            
            (3,801
            )
            
            
            (98
            )%Net
      income
            
            $
            1,401
            
            
            
            6
            %
            
            $
            5,061
            
            
            
            15
            %
            
            $
            (3,660
            )
            
            
            (72
            )%





Net
Sales





Net sales
decreased by $10.1 million, or 30%, from $33.8 million for the nine months
ended December 30, 2008 to $23.7 million for the nine months ended December
31, 2009. A significant portion of the decrease resulted from lower sales volume
with our largest customer, GT Solar.  Also, the global economic downturn
adversely impacted our business during much of the first nine months of fiscal
year 2010.





Cost
of Sales and Gross Margin





Our cost
of sales for the nine months ended December 31, 2009 decreased by $3.3
million to $19.5 million, a decrease of 15%, from $22.8 million for
nine months ended December 31, 2008. The decrease in the cost of sales was
principally due to the reduction in sales volume. The decline in gross
profit margin was $6.8 million (62%) from $11.0 million, or 33% of sales,
during the nine months ended December 30, 2008 to $4.2 million or 18% of sales
for the period ending December 31, 2009.  Contributing to the decline
in gross margin were costs associated with underutilized capacity and the
inventory transfer to GT Solar which included a high volume of raw material
priced at a marginal mark-up to cost.





Operating
Expenses





All of
our payroll and related cost components were almost unchanged at $1.1 million
for the nine months ended December 31, 2009 and 2008.





Professional
fees increased from $184,316 for the nine months ended December 31, 2008 to
$290,755 for the nine months ended December 30, 2009, primarily attributable to
an increase in legal costs related to contract review, SEC filing requirements
and the cost of the Company’s annual shareholder meeting.





Selling,
general and administrative expenses were $1,052,127 and $433,959 for the nine
months ended December 31, 2009 and 2008, respectively, an increase of $618,168
or 142%, primarily related to increased bad debt expense of $235,000, increased
consulting expenditures of $233,000, increased severance pay of $112,000 and
costs associated with the Company’s first annual shareholder
meeting.





Interest
Expense





Interest
expense for the nine months ended December 31, 2009 was $319,601 compared with
$344,923 for the nine months ended December 31, 2008. A decrease of $25,322 (7%)
is the result of lower average levels of long-term debt outstanding at December
31, 2009 as compared to December 30, 2008.




22




Income
Taxes





For the
nine months ended December 31, 2009 and 2008, the Company recorded provisions
for Federal and State income tax expense of $90,288 and $3,890,780,
respectively. The estimated annual effective tax rate for the current fiscal
year is 26%. The effective tax expense rate for the nine months ended December
31, 2008 was 43.5%. The difference between the provision for income taxes and
the income tax determined by applying the statutory federal income tax rate of
34% was due primarily to differences in the lives and methods used to depreciate
and/or amortize our property and equipment, timing differences of expenses
related compensated absences, and the expected utilization of net operating loss
carryforwards. The Company also recognized a deferred tax asset and a federal
tax refund during the period which reduced the tax provision by $287,487 thereby
lowering the effective tax rate for the nine month period ending December 31,
2009 to 6.1%.





Net
Income





As a
result of the foregoing, our net income was $1,400,586 or $0.10 basic and $0.07
diluted per share for the nine months ended December 31, 2009, as compared to
net income of $5.1million or $0.37 basic and $0.19 diluted per share for
the nine months ended December 31, 2008.





Liquidity
and Capital Resources





At
December 31, 2009, we had working capital of $13.0 million as compared with
working capital of $11.1 million at March 31, 2009, an increase of $1.9 million
or 17%. The following table sets forth information as to the principal changes
in the components of our working capital:





(dollars
      in thousands)
            
            December
      31,
              2009
            
            
            March
      31,
              2009
            
            
            Change
              Amount
            
            
            Percentage
              ChangeCash
      and cash equivalents
            
            $
            9,374
            
            
            $
            10,463
            
            
            $
            (1,089
            )
            
            
            (10
            )%Accounts
      receivable, net
            
            
            1,981
            
            
            
            1,419
            
            
            
            562
            
            
            
            40
            %Costs
      incurred on uncompleted contracts
            
            
            3,783
            
            
            
            3,661
            
            
            
            122
            
            
            
            3
            %Raw
      material inventories
            
            
            296
            
            
            
            351
            
            
            
            (55
            )
            
            
            (16
            )%Prepaid
      expenses
            
            
            825
            
            
            
            1,583
            
            
            
            (758
            )
            
            
            (48
            )%Deferred
      tax asset
            
            
            157
            
            
            
            --
            
            
            
            157
            
            
            
            --
            %Other
      receivables
            
            
            30
            
            
            
            60
            
            
            
            (30
            )
            
            
            (50
            )%Accounts
      payable
            
            
            465
            
            
            
            951
            
            
            
            (486
            )
            
            
            (51
            )%Accrued
      expenses
            
            
            499
            
            
            
            710
            
            
            
            (211
            )
            
            
            (30
            )%Accrued
      taxes
            
            
            --
            
            
            
            156
            
            
            
            (156
            )
            
            
            (100
            )%Progress
      billings in excess of cost of uncompleted contracts
            
            
            1,705
            
            
            
            3,945
            
            
            
            (2,240
            )
            
            
            (57
            )%Current
      maturity of long-term debt
            
            
            811
            
            
            
            625
            
            
            
            186
            
            
            
            30
            %





Cash used
in operations was $1.4 million for the nine months ended December 31, 2009 as
compared with cash provided by operations of $4.3 million for the nine months
ended December 31, 2008. The decrease in cash flows from operations is the
result of a significant reduction in customer orders and net income
year-over-year, and cash payments made for estimated federal and state taxes.
Order backlog at December 31, 2009 is $15.7million compared with $40 million at
December 31, 2008. As of January 31, 2010, the Company’s order backlog had
increased to $18.1 million principally due to a $3.8 million order from GT Solar
on January 19, 2010.  Accounts receivable and costs incurred on
uncompleted contracts have increased since March 31, 2009 reflecting a small
incremental increase in sales and customer orders recorded since the first
quarter. Prepaid expenses have decreased since March 31, 2009 as certain prepaid
materials and services were transferred to inventory and consumed in production,
offset in part by cash payments made for taxes. Accounts payable and accrued
expenses reflect a decrease in purchase activity due to lower customer orders
over the nine month period and a recent reduction in accrued compensation
because of reduced factory headcount. Progress billings have decreased since
March 31, 2009 primarily reflecting the revenue recognized in connection with
the materials transferred to GT Solar as part of their April 2009 order
cancellation.





Net cash
provided by financing activities was $285,930 for the nine months ended December
31, 2009 as compared with net cash used of $430,528 for the nine months ended
December 30, 2008.  During the nine months ended December 31, 2009, we
received $6,648 from the exercise of stock options, and borrowed $919,297 under
a line of credit facility in August 2009 to finance the purchase of new
equipment placed into service during the first half of the fiscal year. We paid
down $499,388 of principal on our debt and capital lease
obligations.





During
the nine months ended December 31, 2009, the installation of equipment under
construction has been fully completed, placed into service and was transferred
to property, plant and equipment. For the nine months ended December 31,
2008 we invested $27,173 in new property, plant and equipment and received
proceeds of $12,000 from the sale of equipment.





23




All of
the above activity resulted in a net decrease in cash of $1.1million for the
nine months ended December 31, 2009 compared with a $3.1 million increase in
cash for the nine months ended December 31, 2008.





On
January 8, 2010, the Company issued a purchase order for the purchase of a
gantry mill totaling $2.3 million. The Company has committed to make three equal
payments beginning in January 2010, in April or May of 2010, and upon final
delivery approximately one year from the purchase order date. The Company
intends to borrow up to 80% of the purchase price in order to finance this
purchase.  This purchase commitment represents an investment necessary
to refresh and upgrade the Company’s fleet of manufacturing equipment and
capabilities.





Debt Facilities





At
December 31, 2009, WM Realty had an outstanding mortgage of $3.1 million on
the real property that it leases to Ranor. The mortgage has a term of ten years,
maturing November 1, 2016, bears interest at 6.75% per annum, and provides for
monthly payments of principal and interest of $20,955. The monthly payments are
based on a thirty-year amortization schedule, with the unpaid principal being
due in full at maturity. WM Realty has the right to prepay the mortgage note
upon payment of a prepayment premium of 5% of the amount prepaid if the
prepayment is made during the first two years, and declining to 1% of the amount
prepaid if the prepayment is made during the ninth or tenth year.





We have a
loan and security agreement with Sovereign Bank, dated February 24, 2006,
pursuant to which we borrowed $4.0 million on a term loan basis in connection
with our acquisition of Ranor.  As a result of amendments to the loan
and security agreement, we currently have a $2.0 million revolving credit
facility which is available until June 30, 2010.  At December 31,
2009, there were no borrowings under the revolving note and the maximum
available under the borrowing formula was $2.0 million.





The term
note issued on February 24, 2006 has a term of 7 years with an initial fixed
interest rate of 9%.  The interest rate on the term note converts from
a fixed rate of 9% to a variable rate on February 28, 2011.  From
February 28, 2011 until maturity the term note will bear interest at the prime
rate plus 1.5%, payable on a quarterly basis.   Principal is
payable in quarterly installments of $142,857 plus interest, with a final
payment due on March 1, 2013.





The Term
Note is subject to various covenants that include the following: the loan
collateral comprises all personal property of the Company, including cash,
accounts receivable inventories, equipment, financial and intangible
assets.  The company must also maintain a ratio of earnings available
to cover fixed charges of at least 120% of the fixed charges for the rolling
four quarters, tested at the end of each fiscal quarter.  Additionally
the Company must also maintain an interest coverage ratio of at least 2.1 at the
end of each fiscal quarter.   As of December 31, 2009, the
Company is in compliance with all debt covenants, except the requirement to
maintain a ratio of earnings to fixed charges of 1.2 to 1 which the Company did
not meet as of December 31, 2009.  The Company has obtained a waiver
of the breach of such covenant from Sovereign Bank/Santander, which waiver
covers the breach that otherwise would have occurred in connection with the
covenant testing for the quarter ended December 31, 2009.  The waiver
does not apply to any future covenant testing dates.  The Company
expects to be in compliance with this covenant as of the next testing period
(which will occur in connection with the end of the Company’s fiscal year ending
March 31, 2010).  In the event of default (which default may occur in
connection with a non-waived breach), the lending bank may choose to accelerate
payment of any amounts outstanding under the Term Note and, under certain
circumstances, the bank may be entitled to cancel the facility.  If
the Company were unable to obtain a waiver for a breach of covenant and the bank
accelerated the payment of any outstanding amounts, such acceleration may cause
the Company’s cash position to deteriorate or, if cash on hand were insufficient
to satisfy any payment due, may require the Company to obtain alternate
financing to satisfy any accelerated payment obligation.





We also
had a $3.0 million capital expenditure facility which was available until
November 30, 2009.   The capital expenditure facility was not renewed
upon its expiration on November 30, 2010 as the Company intends to finance
future equipment purchases on a specific item basis.





We paid
interest only on borrowings under the capital expenditures line until November
30, 2009, at which time the principal balance is amortized over five years,
commencing December 31, 2009.  The interest on borrowings under the
capital expenditure line is equal to the prime rate plus 0.5% through and
including November 30, 2009 and thereafter at LIBOR, plus 3%.  Any
unpaid balance on the capital expenditures facility is to be paid on November
30, 2014.  As of December 31, 2009, there were no amounts outstanding
under the revolving line and $888,653 outstanding under the capital expenditure
line.  The balance outstanding under the capital expenditure line were
used to finance the purchase of equipment that has been installed and placed in
service during the second quarter ended September 30, 2009.





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




24




We
believe that the $2.0 million revolving credit facility, which remained unused
as of December 31, 2009 and terminates in June 2010, our capacity to access
equipment specific financing and our cash flow from operations should be
sufficient to enable us to satisfy our cash requirements at least through the
end of fiscal 2011. Nevertheless, it is possible that we may require
additional funds to the extent that we upgrade or expand our manufacturing
facilities.





In the
event that we make an acquisition, we may require additional financing for the
acquisition. However, we do not have any current plans for any acquisition, and
we cannot give any assurance that we will complete any acquisition. We have no
commitment from any party for additional funds; however, the terms of our
agreement with Barron Partners, particularly Barron Partners’ right of first
refusal, may impair our ability to raise capital in the equity markets to the
extent that potential investors would be reluctant to negotiate a financing when
another party has a right to match the terms of the financing.




Item 4T.  Controls and
Procedures





Evaluation
of Disclosure Controls and Procedures





As of
December 31, 2009, we carried out an evaluation, under the supervision and with
the participation of management, including our interim chief executive officer
and chief financial officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934 (the “Exchange Act”)).





Disclosure
controls and procedures are designed to ensure that information required to be
disclosed is recorded, processed, summarized and reported, within the time
periods specified in SEC rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed is accumulated an communicated to the
issuer’s management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure





Based
upon that evaluation, our interim chief executive officer and chief financial
officer concluded that our disclosure controls and procedures were effective as
of December 31, 2009, to provide reasonable assurance that information required
to be disclosed by the Company in reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and forms and is
accumulated and communicated to management, including our interim chief
executive officer and chief financial officer, as appropriate to allow timely
decisions regarding required disclosure.





Changes
in Internal Controls





There was
no change in our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) that
occurred during the quarter ended December 31, 2009 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.




25




PART
II: OTHER INFORMATION





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





The
Company held its Annual Meeting of Shareholders on October 15, 2009, at which
the following matters were voted upon:





(1) A
management proposal for the election of six directors, each to serve until the
2010 annual meeting of shareholders of TechPrecision Corporation and until their
successors are elected and qualified:





Directors
            For
            WithheldPhilip
      A.  Dur
            12,698,853
            149,998Michael
      R. Holly
            12,694,247
            154,604Andrew
      A. Levy
            12,698,853
            149,998Larry
      Steinbrueck
            10,114,646
            2,734,205Louis
      A. Winoski
            12,708,852
            139,999Stanley
      A. Youtt
            12,694,247
            154,604





(2) A
management proposal to ratify the appointment of Tabriztchi and Company, CPA,
P.C. as our independent registered public accounting firm for the fiscal year
ending March 31, 2010 was voted upon, and 12,701,853 shares were voted for the
proposal, 133,999 shares were voted against, and 12,999 shares
abstained.





Item
6.   Exhibits





(a)  Exhibits.





Exhibit
      No.
            Description31.1
            Rule
      13a-14(a) certification of chief executive officer31.2
            Rule
      13a-14(a) certification of chief financial officer32.1
            Section
      1350 certification of chief executive and chief financial
      officers





26




SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





TECHPRECISION
      CORPORATION
              (Registrant)Dated:  February
      16, 2010
            By:
            /s/
      Richard F.
      FitzgeraldRichard
      F. Fitzgerald
              Chief
      Financial Officer
              (duly
      authorized officer and principal financial
  officer)





27





EXHIBIT
INDEX





Exhibit No.
            Description31.1
            Rule
      13a-14(a) certification of chief executive officer31.2
            Rule
      13a-14(a) certification of chief financial officer32.1
            Section
      1350 certification of chief executive and chief financial
      officers