**U.S.
      Securities and Exchange Commission**


Washington,
      DC 20549





**Form
      10-QSB**





QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED





**December
      31, 2007**




Commission
      File Number 0-51378





Techprecision
      Corporation


(Name
      of
      small business issuer as specified in its charter)





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





Bella
      Drive, Westminster, Massachusetts 01473


(Address
      of principal executive offices)


Issuer’s
      telephone number: (978) 874-0591




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




Indicate
      by checkmark whether the Registrant is a shell company (as defined in Rule
      12b-2
      of the Exchange Act). Yes oNo
x





As
      of
      February 4, 2008 there are 12,225,001 shares of the common stock, par value
      $.0001 per share, outstanding.





Transitional
      Small Business Disclosure Format (check one): Yes oNo x









INDEX





**Part
                I. Financial Information******Item
                1. Financial StatementsUnaudited
                balance sheet at December 31, 2007
            
            
            2Unaudited
                statements of operations for the three months and nine months ended
                December 31, 2007 and 2006
            
            
            3Unaudited
                statements of cash flows for the nine months ended December 31, 2007
                and
                2006
            
            
            4Notes
                to financial statements
            
            
            6Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations
            
            
            17Item
                3. Controls and Procedures
            
            
            26**Part
                II. Other Information******
            
            
            27Item
                4. Submission of matters to a vote of security holders
            
            
            27Item
                5. Exhibits
            
            
            28







**Part
      I - FINANCIAL INFORMATION**


**Item
      1. Financial Statements**




**TECHPRECISION
      CORPORATION**


**CONSOLIDATED
      BALANCE SHEETS**


**DECEMBER
      31, 2007**


**(UNAUDITED)**




ASSETSCurrent
                AssetsCash
                and cash equivalents
            
            $
            1,583,972Accounts
                receivable, less allowance for doubtful accounts of
                $25,000
            
            
            5,131,310Costs
                incurred on uncompleted projects
            
            
            5,583,668Inventories
                of raw materials
            
            
            188,303Prepaid
                expenses
            
            
            950,166Total
                current assets
            
            
            13,437,419Deposit
                on equipment
            
            
            346,316Property,
                plant and equipment, net
            
            
            2,552,613Deferred
                loan cost, net
            
            
            125,949Total
                assets
            
            $
            16,462,297LIABILITIES
                AND STOCKHOLDERS’ EQUITYCurrent
                LiabilitiesAccounts
                payable
            
            $
            2,169,430Accrued
                expenses
            
            
            1,217,082Deferred
                revenues
            
            
            3,568,498Current
                maturity of long-term debt
            
            
            602,560Total
                current liabilities
            
            
            7,557,570Long-Term
                DebtNotes
                payable- noncurrent
            
            
            5,569,864Stockholders’
                EquityPreferred
                stock - par value $.0001 per share, 10,000,000 shares authorized,
 
                of which 9,000,000 are designated as Series A Preferred Stock, with
 
                7,247,564 shares issued and outstanding at December 31,
                2007
            
            
            2,619,939Common
                stock - par value $.0001 authorized 90,000,000, 12,223,001  
                outstanding on December 31, 2007.
            
            
            1,223Paid
                in capital
            
            
            2,576,087Accumulated
                deficit
            
            
            (1,862,386
            )Total
                stockholders’ equity
            
            
            3,334,863Total
                liabilities and stockholders’ equity
            
            $
            16,462,297




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


2


**TECHPRECISION
      CORPORATION**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**





**Three Months Ended December 31,**
            
            **Nine Months Ended December 31,****2007**
            
            **2006**
            
            **2007**
            
            **2006**Net
                sales
            
            $
            9,609,926
            
            $
            5,533,541
            
            
            22,533,872
            
            $
            13,448,811Cost
                of sales
            
            
            7,029,905
            
            
            4,555,695
            
            
            16,779,229
            
            
            10,808,162Gross
                profit
            
            
            2,580,021
            
            
            977,846
            
            
            5,754,643
            
            
            2,640,649Operating
                expensesProfessional
                expense
            
            
            73,737
            
            
            153,735
            
            
            303,105
            
            
            305,893Payroll
                and related costs
            
            
            293,752
            
            
            334,296
            
            
            885,536
            
            
            984,707Other
                selling, general and administrative
            
            
            134,812
            
            
            58,685
            
            
            285,601
            
            
            332,010Total
                operating expenses
            
            
            502,301
            
            
            546,716
            
            
            1,474,242
            
            
            1,622,610Income
                from operations
            
            
            2,077,720
            
            
            431,130
            
            
            4,280,401
            
            
            1,018,039Other
                income (expense)Interest
                expense
            
            
            (124,356
            )
            
            (141,991
            )
            
            (390,017
            )
            
            (506,263
            )Finance
                costs
            
            
            (7,591
            )
            
            (1,939
            )
            
            (12,770
            )
            
            (214,686
            )Interest
                income
            
            
            11
            
            
            523
            
            
            477
            
            
            1,186Total
                other income (expense)
            
            
            (131,936
            )
            
            (143,407
            )
            
            (402,310
            )
            
            (719,763
            )Income
                (loss) before income taxes
            
            
            1,945,784
            
            
            287,723
            
            
            3,878,091
            
            
            298,276Provision
                for income taxes
            
            
            (568,754
            )
            
            —
            
            
            (1,214,988
            )
            
            —Net
                Income (loss)
            
            
            1,377,030
            
            $
            287,723
            
            
            2,663,103
            
            
            298,276Preferred
                stock deemed dividend
            
            
            —
            
            
            —
            
            
            —
            
            
            (388,233
            )Net
                income (loss) to common stockholders
            
            $
            1,377,030
            
            $
            287,723
            
            $
            2,663,103
            
            $
            (89,957
            )Weighted
                average number of shares of common stock outstanding-basic
            
            
            11,139,305
            
            
            10,009,000
            
            
            10,415,546
            
            
            10,009,000Weighted
                Average number of shares of common stock
                outstanding-diluted
            
            
            28,623,308
            
            
            19,090,527
            
            
            27,899,549
            
            
            10,009,000Net
                income (loss) per share-basic
            
            $
            0.12
            
            $
            0.03
            
            $
            0.26
            
            $
            (0.01
            )Net
                income (loss) per share-diluted
            
            $
            0.05
            
            $
            0.02
            
            $
            0.10
            
            $
            (0.01
            )





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




3


**TECHPRECISION
      CORPORATION**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**




**Nine months ended**
              **December 31,****2007**
            
            **2006****CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                gain (loss) for the period
            
            $
            2,663,103
            
            $
            298,276Noncash
                items included in net income:Depreciation
            
            
            353,251
            
            
            305,800Amortization
                of deferred loan costs
            
            
            12,770
            
            
            214,686Shares
                and warrants issued for services
            
            
            731
            
            
            7,551Expense
                for equity-based incentives
            
            
            —
            
            
            13,500Changes
                in assets and liabilities:Accounts
                receivable
            
            
            (2,429,603
            )
            
            (
                584,881
            )Other
                receivables
            
            
            —
            
            
            7,921Inventory
            
            
            (
                4,805
            )
            
            37,342Costs
                on uncompleted contracts
            
            
            (4,317,223
            )
            
            266,128Prepaid
                expenses
            
            
            (
                679,845
            )
            
            104,482Accounts
                payable and accrued expenses
            
            
            1,589,241
            
            
            300,187Deferred
                Revenues
            
            
            3,568,498
            
            
            —Net
                cash provided by operating activities
            
            
            756,118
            
            
            970,992**CASH
                FLOWS USED IN INVESTING ACTIVITIES**Purchases
                of property, plant and equipment
            
            
            (
                344,810
            )
            
            (
                230,558
            )Deposits
                on equipment
            
            
            (
                346,316
            )
            
            —Net
                cash used in investing activities
            
            
            (
                691,126
            )
            
            (
                230,558
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Payment
                on note and mortgage
            
            
            (
                458,829
            )
            
            (3,735,604
            )Issuance
                of notes
            
            
            **—**
            
            
            3,200,000WM
                Realty capital contribution (distribution)
            
            
            (
                64,625
            )
            
            89,260Cash
                from restricted fund
            
            
            —
            
            
            25,000Cost
                of issuance
            
            
            —
            
            
            (
                104,132
            )Loans
                from stockholder
            
            
            (
                60,000
            )
            
            90,000Exercise
                of warrants
            
            
            658,436
            
            
            —Net
                cash provided by (used in) financing activities
            
            
            74,982
            
            
            (
                435,476
            )Net
                increase in cash and cash equivalents
            
            
            139,974
            
            
            304,959Cash
                and cash equivalents, beginning of period
            
            
            1,446,998
            
            
            492,801Cash
                and cash equivalents, end of period
            
            $
            1,583,972
            
            $
            797,760**Supplemental
                Disclosures of Cash Flows Information**Cash
                paid during the period for:Interest
                expense
            
            $
            390,017
            
            $
            506,263Income
                taxes
            
            $
            250,000
            
            $
            3,100





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


4




**Supplemental
      Information - Noncash Transactions**





Nine
      Months Ended December 31, 2007





During
      the quarter ended December 31, 2007, preferred shareholders converted 504,896
      shares of preferred stock, with a book value of $170,151 to 660,000 shares
      of
      common stock. The conversion ratio of one share of preferred to 1.3072
      shares of common stock in accordance with the securities purchase agreement
      dated February 24, 2006 as amended in May 2007. The conversion price of each
      share of common stock was computed at $0.2180.




On
      October 3, 2007, a registration statement covering 2,000,000 shares of common
      stock, of which 1,900,000 are shares of common stock issuable upon exercise
      of
      warrants, was declared effective by the Securities and Exchange Commission.
      As
      of December 31, 2007, the Company had received $658,436 from the exercise of
      warrants to purchase 1,510,000 shares of common stock. The Black-Scholes model
      was used to estimate the cost of each preferred stockholder warrant issued
      on
      February 24, 2006 at $0.03. The assumptions used to arrive at the estimate
      were
      risk free rate of 4.75%, term of 5 years, market price of the underlying common
      stock of $0.285 and volatility of 28.5%. The total estimated cost of 1,510,000
      warrants was $45,300 that was charged to the preferred stock and credited to
      additional paid in capital





Nine
      Months Ended December 31, 2006





The
      beneficial effect of the reduction in conversion price of preferred stock to
      common stock from $.285 to $.24225 was $.04275 per share for a total of $388,233
      for 9,081,471 shares. The beneficial effect increased the preferred stock and
      accumulated deficit of the Company.




In
      the
      nine-month period ended December 31, 2006, the Company issued 42,000 restricted
      shares to employees of the Company. The shares were valued at $.18 per share
      or
      $7,561. The valuation was based on a discount on the price paid per share by
      independent third parties. The
      issuance of 42,000 restricted shares were part of a total grant of 126,000
      shares of common stock. The remaining 84,000 shares granted are subject to
      forfeiture and, therefore, are not treated as issued shares. On
      July 27, 2006 the Board of Directors amended the Company’s 2006 long-term
      incentive plan to increase the number of options granted to independent
      directors upon their initial election as directors. Pursuant to such plan,
      options to purchase 75,000 shares of common stock had been granted in March
      2006
      and options to purchase an additional 75,000 shares were granted on July 27,
      2006, subject to stockholder approval of the plan. In February 2007 the
      stockholders approved the plan. The fair value of the options was calculated
      at
      $.09 per share, for total of $13,500 for the options to purchase 150,000 shares.
      The weighted average grant date fair value of options granted during the nine
      months ended December 31, 2006 was estimated on the grant date using the
      binomial lattice option-pricing model with the following assumptions: expected
      volatility of 25% expected term of 5 years, risk-free interest rate of 5.0%,
      and
      expected dividend yield of 0%. Expected volatility is an estimate. The average
      expected life was calculated using the simplified method under SAB 107. The
      risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with
      a
      remaining term equal to the expected life of option grants.




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




5


**TECHPRECISION
      CORPORATION**




**NOTES
      TO FINANCIAL STATEMENTS**




**NOTE
      1. INTERIM FINANCIAL INFORMATION**





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and with the
      instructions to Form 10-QSB and Item 310 of Regulation S-B. In the opinion
      of
      management, the condensed consolidated financial statements reflect all
      adjustments (consisting of normal recurring adjustments) considered necessary
      for a fair presentation of the results of Techprecision Corporation and its
      subsidiaries for the periods presented. Operating results for interim periods
      are not necessarily indicative of results that may be expected for the fiscal
      year as a whole. The preparation of the financial statements in conformity
      with
      accounting principles generally accepted in the U.S. requires management to
      make
      estimates and assumptions that affect the reported amounts of assets,
      liabilities, revenues, expenses, and the related disclosures at the date of
      the
      financial statements and during the reporting period. Actual results could
      materially differ from these estimates. For further information, refer to the
      consolidated financial statements and notes thereto included in the Company’s
      Annual Report on Form 10-KSB for the year ended March 31, 2007. Certain prior
      quarter amounts may have been reclassified to conform to the presentation used
      in 2007.




**NOTE
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





Use
      of
      Estimates in the Preparation of Financial Statements





In
      preparing financial statements in conformity with generally accepted accounting
      principles, management is required to make estimates and assumptions that affect
      the reported amounts of assets and liabilities and the disclosure of contingent
      assets and liabilities at the date of the financial statements and revenues
      and
      expenses during the reported period. Actual results could differ from those
      estimates.





Fair
      Values of Financial Instruments





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





Cash
      and
      cash equivalents





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





Accounts
      receivable





Trade
      accounts receivable are stated at the amount Techprecision’s wholly owned
      operating subsidiary, Ranor, Inc., expects to collect. Ranor maintains
      allowances for doubtful accounts for estimated losses resulting from the
      inability of its customers to make required payments. Management considers
      the
      following factors when determining the collectability of specific customer
      accounts: customer credit-worthiness, past transaction history with the
      customer, current economic industry trends, and changes in customer payment
      terms. If the financial condition of Ranor’s customers were to deteriorate,
      adversely affecting their ability to make payments, additional allowances would
      be required. Based on management’s assessment, Ranor provides for estimated
      uncollectible amounts through a charge to earnings and a credit to a valuation
      allowance. Balances that remain outstanding after Ranor has used reasonable
      collection efforts are written off through a charge to the valuation allowance
      and a credit to accounts receivable. Current earnings are also charged with
      an
      allowance for sales returns based on historical experience.


6




Inventories





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





Notes
      Payable





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





Long-lived
      Assets





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





Leases





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





Earnings
      (Loss) per share of common stock




Basic
      earnings per common share are computed based on the weighted average number
      of
      common shares outstanding during the period.




Diluted
      earnings per common share is computed based upon the weighted average number
      of
      common shares outstanding during the period plus the dilutive effect of common
      shares equivalents using the Treasury Stock Method and the average market price
      for the period. Common stock equivalents include convertible preferred stock,
      stock warrants and stock options.




Loss
      per
      share is computed by dividing the net loss by the number of weighted average
      shares outstanding for the year of the loss. The shares of common stock issuable
      upon conversion of the series A preferred stock and upon exercise of outstanding
      warrants and options were not considered since they would be considered
      anti-dilutive.





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.


7


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





Advertising
      expenses





Advertising
      costs are charged to operations when incurred.





Income
      taxes





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





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





Variable
      Interest Entity





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





New
      Accounting Pronouncements




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





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


8





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




On
      July 1, 2007, we adopted Emerging Issues Task Force Issue No. 06-2
      (“EITF 06-2”), *Accounting
      for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement
      No. 43* .
      EITF
      06-2 requires companies to accrue the costs of compensated absences under a
      sabbatical or similar benefit arrangement over the requisite service period.
      The
      adoption of EITF 06-2 does not have an affect the Company’s financial position
      or results of operation.





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




**NOTE
      3. COSTS INCURRED ON UNCOMPLETED CONTRACTS AND DEFERRED
      REVENUES**




The
      Company recognizes revenues based upon the units-of-delivery method (see Note
      2). The advance billings 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.  The amounts received in excess of the costs
      incurred are classified as deferred revenues. The deferred revenues were
      $3,568,498 on December 31, 2007. For the nine months ended December 31, 2007,
      the changes in the costs incurred on uncompleted contracts and advanced billings
      were as follows:





AmountCost
                incurred on uncompleted contracts, beginning balance
            
            $
            5,455,142Plus
                total cost incurred on contracts, during the year
            
            
            21,123,327Less
                cost of sales, during the year
            
            
            (16,714,496
            )Cost
                incurred on uncompleted contracts, ending balance
            
            $
            9,863,973Billings
                on uncompleted contracts, beginning balance
            
            $
            4,188,697Plus:
                Total billings on contracts, during the period
              (excluding
                deferred revenues of $3,568,498)
            
            
            17,670,856Less:
                Contracts recognized as revenue, during the year
            
            
            (17,579,248
            )Billings
                on uncompleted contracts, ending balance
            
            $
            4,280,305Cost
                incurred on uncompleted contracts, ending balance
            
            $
            9,863,973Billings
                on uncompleted contracts, ending balance
            
            
            (4,280,305
            )Cost
                incurred on uncompleted contracts, ending balance, net
            
            $
            5,583,668




9




The
      allowance for losses on uncompleted contracts that was recognized was $171,566
      and $10,045 for the nine months ended December 31, 2007 and 2006, respectively.




**NOTE
      4. PREPAID EXPENSES**




As
                of December 31, 2007, the prepaid expenses included the following:




AmountInsurance
            
            $
            155,103Real
                estate taxes
            
            
            4,230Prepayments
                on purchases
            
            
            777,884Equipment
                and software maintenance
            
            
            12,949Total
            
            $
            950,166




**NOTE
      5. DEFERRED CHARGES**




Deferred
      charges represent the capitalization of costs incurred in connection with
      obtaining the bank loan and building mortgage, which is carried by WM Realty.
      These costs are being amortized over the term of the related debt obligation.
      Amortization charged to operations in the nine months ended December 31, 2007
      and 2006 were $12,770 and $214,686 respectively.





AmountDeferred
                loan costs
            
            $
            150,259(24,310
            )Accumulated
                amortization
            
            $
            125,
                949




**NOTE
      6. PROPERTY, PLANT AND EQUIPMENT**




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




AmountLand
            
            $
            110,113Building
                and improvements
            
            
            1,412,730Machinery
                equipment, furniture and fixtures
            
            
            3,262,384Total
                property, plant and equipment
            
            
            4,785,227Less:
                accumulated depreciation
            
            
            (2,232,614
            )Property,
                plant and equipment, net
            
            $
            2,552,613





Depreciation
      expense for the nine-month periods ended December 31, 2007 and 2006 was $353,251
      and $305,800, respectively. Land and buildings (which are owned by WM Realty
      Management, LLC, a consolidated entity under Fin 46 R) are collateral for the
      $3,162,859 mortgage loan. Other fixed assets of the Company, together with
      the
      Company’s personal properties, are collateral for the Sovereign Bank $3,000,000
      secured loan and line of credit.




10





1.Long-term
                debt issued on February 24, 2006:Sovereign
                Bank Secured Term note payable - 72 month 9% variable term note with
                quarterly principal payments of $142,857 plus interest. Final payment
                due
                on March 1, 2013
            $
            3,000,0002.Long-term
                mortgage loan issued on October 4, 2006Amalgamated
                Bank mortgage loan to WM Realty - 10 years, annual interest rate
                of 6.75%,
                monthly interest and principal payment $20,955. The amortization
                is based
                on a thirty-year amortization schedule. WM Realty Management has
                the right
                to prepay the mortgage note with payment of a prepayment premium
                of 5% of
                the amount prepaid if the prepayment is made during the first two
                years,
                and declining to 1% of the amount prepaid if the prepayment is made
                during
                the ninth or tenth year
            
            3,162,8593.Automobile
                Loan - Ford Motor Credit Company
              Note
                payable secured by a vehicle - payable in monthly installments of
                $552
                including interest of 4.9%, commencing July 20, 2003 ending June
                20,
                2009
            
            9,565Total
            
            6,172,424Less:
                principal payments due within one year
            
            (602,560)Principal
                payments due after one year
            $
            5,569,864




On
      February 24, 2006, Ranor entered into a loan and security agreement with
      Sovereign Bank. Pursuant to the agreement, the bank made a term loan of
      $4,000,000 to the Company and extended the Company a line of credit of
      $1,000,000 with an initial interest rate of 9%. The interest on the line of
      credit is variable. In February 2007, the Company entered into an amendatory
      agreement with the bank which (i) reduced the interest rate on its revolving
      credit line from prime plus 1 1/2% to prime plus 1% and (ii) provided capital
      expenditure line of credit for $500,000 at prime plus 1%. Under this capital
      expenditures facility, the Company may borrow up to $500,000 until February
      1,
      2008, with interest only payable through February 1, 2008 and principal to
      be
      amortized over a five-year term commencing March 1, 2008. On June 28, 2007,
      the
      Company increased its line of credit with Sovereign Bank from $1,000,000 to
      $2,000,000, with a maturity date of November 30, 2013 for any unpaid balance.





On
      November 30, 2007, the Company entered the third amendatory agreement with
      Sovereign Bank. Under the new agreement the capital expenditure limit was
      increased to $3,000,000 and the variable rate interest was set at the prime
      plus
      one half of one per cent per annum, through November 30, 2008. Thereafter,
      the
      cost the line of credit will be the banks cost of funds plus 2.25% per year
      until November 30, 2013. The Company is required to pay interest only until
      November 30, 2008. After that date the Company will repay the principal, on
      a
      monthly basis, in the amount sufficient to amortize the outstanding balance
      over
      a five year schedule.




As
      of
      December 31, 2007, the Company had not borrowed any money under the capital
      expenditures facility or line of credit.




The
      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 owned when
      the loan is contracted or acquired thereafter; the amount of loan outstanding
      at
      all times is limited to a borrowing base amount of the Company’s qualified
      accounts receivable and inventory; there are prepayment penalties of 3%, 2%
      and
      1% of the outstanding principal, in the first, second and third years following
      the issuance date, respectively. There is no prepayment penalty thereafter;
      the
      Company’s subsidiary, Ranor, Inc., is prohibited from issuing any additional
      equity interest (except to the Company), or redeeming, retiring, purchasing
      or
      otherwise acquiring for value any equity interests; the Company pays an unused
      credit line fee of 0.25% of the average unused credit line amount in previous
      month; the earnings available to cover fixed charges are required to be
      not
      less than 120% of fixed charges for the rolling four quarters, tested at the
      end
      of each fiscal quarter; and interest coverage ratio is required to be not less
      than 2 to 1 as at the end of each fiscal quarter.




11




In
      connection with the Amalgamated Bank mortgage financing, the principal equity
      owner of WM Realty Management and a principal stockholder of the Company,
      executed a limited guarantee. Pursuant to the limited guaranty, the principal
      shareholder of the Company guaranteed the lender the payment of any loss
      resulting from WM Realty Management’s fraud or misrepresentation in connection
      with the loan documents, misapplication of rent and insurance proceeds, failure
      to pay taxes and other defaults resulting from his or WM Realty’s
      misconduct.





As
      of
      December 31, 2007, the future maturities of long-term debt were as follows:




March
                31,
            
            Amount2008
            
            $
            150,9032009
            
            
            612,7522010
            
            
            612,4352011
            
            
            612,6412012
            
            
            615,628Due
                after 2011
            
            
            3,568,065Total
            
            $
            6,172,424




**NOTE
      8. CONCENTRATION OF CREDIT RISK**





A
      significant portion of our revenue is generated by a small number of customers
      who differ from period to period as the Company completes work on projects
      or
      commences new projects for other customers. The Company’s two largest customers
      accounted for approximately 64.2% of our revenues in the nine months ended
      December 31, 2007 and 76.9% of our receivables as of December 31, 2007.




**NOTE
      9. INCOME TAXES**





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




AmountIncome
                tax provision at statutory rate
            
            $
            (1,247,988
            )Tax
                benefit before net operating loss carry forward
            
            
            33,000Net
                tax provision
            
            $
            (1,214,988
            )




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





AmountDeferred
                Tax Assets:Current:Compensation
                accrual
            
            $
            85,000Bad
                debt allowance
            
            
            10,000Loss
                on uncompleted contracts and carry-forward
            
            
            67,000Non-current:Net
                operating loss carry-forward (39% statutory rate)
            
            
            745,000Total
                deferred tax assets
            
            
            907,000Deferred
                Tax Liabilities:Non-currentDepreciation
            
            
            (215,000
            )Net
                deferred tax asset
            
            
            692,000Valuation
                allowance
            
            
            (692,000
            )Net
                Deferred Tax Asset Balance
            
            $
            —




12




At
      December 31, 2007, the Company provided a full valuation allowance for its
      net
      deferred tax assets. The Company believes sufficient uncertainty exists
      regarding the realizability of the deferred tax assets. Because of the more
      than
      50% change in ownership of Ranor, Inc, Ranor’s net operating loss carryforward
      is subject to IRC §382, which limits the amount of the tax loss carryforward
      that can be used in any year. The amount of net operating loss carryforward
      that
      may be used annually is equal to a percentage of the company’s value at the date
      of ownership. The percentage is the highest long-term federal tax exempt rate
      for the month during which the ownership occurred and the preceding two months.
      The ownership change occurred during February 2006. The Federal long term tax
      exempt rate is determined by the Internal Revenue Service. If not utilized,
      the
      federal net operating loss carryforward of Ranor and Techprecision will expire
      in 2025 and 2027, respectively.




**NOTE
      10. RELATED PARTY TRANSACTIONS**





*Management
      Fees*




During
      the nine months ended December 31, 2006, the Company paid $100,002 pursuant
      to a
      management contract with Techprecision LLC, a limited liability company that
      was
      owned by three individuals, including two principal stockholders, one of whom
      was also the Company’s chief executive. On January 29, 2007, the management
      agreement with Techprecision LLC was terminated retroactive to December 31,
      2006. In connection with the termination, the Company made a payment of $16,667
      on or about January 15, 2007 and the Company agreed and made eight monthly
      payments of $9,167 to Techprecision LLC, commencing February 15, 2007 and ending
      on September 15, 2007. Mr. Jim Reindl has not been a member of Techprecision
      LLC
      since December 31, 2006. As a result of the termination of the management
      agreement, Mr. Reindl no longer receives compensation through Techprecision
      LLC.





*Employment
      Agreements*





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




13




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





*Loans
      from Related Parties*




The
      principal equity owner of WM Realty made loans to WM Realty in the year ended
      March 31, 2007. The loan was paid during the nine months ended December 31,
      2007. Interest paid in 2007 was $4,735. No interest was paid in
      2006.




*Sale
      and Lease Agreement and Intra-company Receivable*




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




On
      October 4, 2006, WM Realty Management placed a new mortgage of $3.2 million
      on
      the property and the existing mortgage of $3.1 million was paid off. The new
      mortgage has a term of ten years, bears interest at 6.75% per annum, and
      provides for monthly payments of principal and interest of $20,595. The payments
      are based on a thirty-year amortization schedule. WM Realty Management has
      the
      right to prepay the mortgage note upon payment of a prepayment premium of 5%
      of
      the amount prepaid if the prepayment is made during the first two years, and
      declining to 1% of the amount prepaid if the prepayment is made during the
      ninth
      or tenth year. In connection with the refinancing, Andrew Levy, the principal
      stockholder of WM Realty, executed a limited guarantee. Pursuant to the limited
      guaranty, Mr. Levy guaranteed the lender the payment of any loss resulting
      from
      WM Realty Management’s fraud or misrepresentation in connection with the loan
      documents, misapplication of rent and insurance proceeds, failure to pay taxes
      and other defaults resulting from his or WM Realty’s
      misconduct.





*Distribution
      to WM Realty Shareholders*





During
      the nine months ended December 31, 2007, WM Realty had a net income of $85,000.
      The stockholders deficit of the WM Realty was $309,000 on December 31, 2007.
      During the nine months ended December 31, 2007, WM Realty shareholders made
      net
      capital contributions of $17,000 and distributions of $82,000 were made to
      the members of that company.




**NOTE
      11. OPERATING LEASES**




Ranor
      leases office equipment under operating lease agreements expiring in November
      2008. Total lease expense charged to operations was $12,853 for the nine months
      ended December 31, 2007 and $13,134 in the nine months ended December 31, 2006.
      Future minimum lease payments under non-cancellable portions of the leases
      as of
      December 31, 2007, are as follows:




14





Years
                ending March 31,
            
            **Amount**2008
            
            $
            9,079Total
                minimum lease payments
            
            $
            9,079





On
      December 7, 2007, Ranor acquired all the equipment of a company called Vertex
      Tool and Die, Inc for $150,000. Also, Ranor assumed Vertex’s property lease
      obligation. The current lease expires August 31, 2009 but has an option to
      be
      extended for an additional term of five years. Future minimum lease payments
      are
      as follows:




Year
                ending March 31
            
            Amount2008
            
            $
            14,1002009
            
            
            54,289Total
                minimum lease payments
            
            $
            68,389




**NOTE
      12. SALE AND LEASE**




On
      February 24, 2006 Ranor, Inc. sold its real property to WM Realty Management,
      LLC, a special purpose entity for $3,000,000, and leased the real property
      occupied by Ranor pursuant to a fifteen year lease commencing February 24,
      2006.
      For the years ended March 31, 2007 the Company’s annual rent expense was
      $438,500. This amount was eliminated in consolidation and the interest and
      depreciation were expensed. The current annual rent is $444,000, and the rent
      is
      subject to an annual increase based on the consumer price index.




The
      Company has 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 has the option to purchase the property at the appraised market value.
      The minimum future lease payments are as follows:




Year
                Ended March 31,
            
            Amount2008
            
            $
            111,0002009
            
            
            444,0002010
            
            
            444,0002011
            
            
            444,0002012
            
            
            444,000Total
                next five years, 2013 to 2017
            
            
            2,220,000Total
                remaining years, 2018 to 2021
            
            
            1,776,000Total
            
            $
            5,883,000




**NOTE
      13. EARNINGS PER SHARE**





The
      Company computes basic earnings per share (“basic EPS”) by dividing net income
      by the weighted average number of shares of common stock outstanding for the
      reporting period. Diluted earnings per share (“diluted EPS”) gives effects to
      all dilutive potential shares outstanding resulting from employee stock options
      during the period.




15


During
      the three months ended December 31, 2007, preferred stockholders converted
      504,896 shares of preferred stock to 660,000 shares of common stock and
      exercised 1,510,000 warrants and acquired 1,510,000 shares. The treasury stock
      method, with the average common stock market price of $3.63, for the trading
      period December 27, 2007 to December 31, 2007, has been used to estimate the
      potential dilutive effects of the outstanding employee and director options,
      warrants and convertible preferred stock. The potentially dilutive shares were
      as follows:




Number
                of
            
            ExerciseShares
            
            PriceOptions
                for investor services
            
            
            112,500
            
            $
            1.400Employee
                and director options
            
            
            371,659
            
            $
            0.2850Unexercised
                preferred shareholder warrants
            
            
            4,100,000
            
            
            0.4361Unexercised
                preferred shareholder warrants
            
            
            5,610,000
            
            
            0.6541Convertible
                preferred stock
            
            
            9,430,522
            
            
            0.21819,624,681





The
      earnings per share for the three months and nine months ended December 31,
      2007
      and 2006 were as follows:




**Three Months Ended December 31,**
              
              **Nine Months Ended December 31,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Net
                  income (loss) to common stockholders
              
              $
              1,377,030
              
              $$
              287,723
              
              $
              2,663,103
              
              $
              (89,957
              )Weighted
                  average number of shares of common stock outstanding-basic
              
              
              11,139,305
              
              
              10,009,000
              
              
              10,415,546
              
              
              10,009,000Weighted
                  Average number of shares of common stock
                  outstanding-diluted
              
              
              28,554,464
              
              
              19,090,527
              
              
              27,830,705
              
              
              10,009,000Net
                  income (loss) per share-basic
              
              $
              0.12
              
              $
              0.03
              
              $
              0.26
              
              $
              (0.01
              )Net
                  income (loss) per share-diluted
              
              $
              0.05
              
              $
              0.02
              
              $
              0.10
              
              $
              (0.00
              )




**NOTE
      14. COMMITMENTS AND CONTINGENCIES**




On
      September 1, 2007, Techprecision entered into contract with CCG Investor
      Relations, Inc. (CCG) whereby CCG agreed to provide investor relation services
      to the Company for a period of one year. The Company will pay CCG $5,000 per
      month for the first six months of the contract and $7,000 per month for the
      remaining six months. The monthly retainer was based on a $200 per hour blended
      billing rate. The contract could be terminated after the initial six months,
      and
      following the primary term of one year the contract would continue on a month
      to
      month basis unless terminated by either party providing 30 days written
      notice.





As
      additional payment, the Company issued 112,500 of warrants to CCG, exercisable
      into 112,500 shares of restricted common stock at a strike price of $1.40 per
      share, vesting on September 30, 2007, and an additional 112,500 warrants with
      the same terms, to vest March 31, 2008.





Using
      the
      Black-Scholes options pricing formula assuming a risk free rate of 5%,
      volatility of 28.5 percent, 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 warrants were
      calculated at $0.0001 per warrant.




16


The
      warrant shall have a “Cashless Exercise Provision” if the underlying shares are
      not registered at the time CCG chooses to exercise the warrants. Since the
      contract permits the Company to deliver unregistered shares, the Company has
      the
      control in settling the contract by issuing equity and the cost of warrants
      was
      added the additional paid in capital.





**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 Techprecision
      Corporation on Form 10-QSB, including this section entitled “Management’s
      Discussion and Analysis of Financial Condition and Results of Operations,” may
      contain predictive or “forward-looking statements” within the meaning of the
      Private Securities Litigation Reform Act of 1995. Forward-looking statements
      include, but are not limited to, statements that express our intentions,
      beliefs, expectations, strategies, predictions or any other statements relating
      to our future activities or other future events or conditions. These statements
      are based on current expectations, estimates and projections about our business
      based in part on assumptions made by management. These statements are not
      guarantees of future performance and involve risks, uncertainties and
      assumptions that are difficult to predict. Therefore, actual outcomes and
      results may, and probably will, differ materially from what is expressed or
      forecasted in the forward-looking statements due to numerous factors. Those
      factors include those risks discussed under “Risk Factors” in our Form 10-KSB
      annual report for the year ended March 31, 2007 and those described in any
      other
      filings which we make with the SEC, as well as the disclosure contained in
      “Management’s Discussion and Analysis of Financial Condition and Results of
      Operations” in the Form 10-KSB for the year ended March 31, 2007 and this Form
      10-QSB. In addition, such statements could be affected by risks and
      uncertainties related to our ability to generate business on an on-going
      business, to obtain any required financing, to receive contract awards from
      the
      competitive bidding process, maintain standards to enable us to manufacture
      products to exacting specifications, enter new markets for our services, market
      and customer acceptance, competition, government regulations and requirements,
      pricing and development difficulties, our ability to make acquisitions and
      successfully integrate those acquisitions with our business, as well as general
      industry and market conditions and growth rates, and general economic
      conditions. Any forward-looking statements speak only as of the date on which
      they are made, and we do not undertake any obligation to update any
      forward-looking statement to reflect events or circumstances after the date
      of
      this report. Investors should evaluate any statements made by the Company in
      light of these important factors.





**Overview**




We
      are a
      nationally recognized manufacturer of high-precision, large scale metal
      fabrications and machined assemblies weighing up to 100 tons. Our wholly-owned
      subsidiary, Ranor, Inc., has been in continuous operation since 1956 with
      clients in the defense, aerospace, commercial, nuclear, alternative energy
      and
      medical industries. Recently, we have refocused our resources on working on
      long-term production programs with clients in the alternative energy (mainly
      solar), nuclear and medical equipment sectors as a result of growing industry
      demands for our services. Payment terms associated with each project often
      include progress payments and occasionally include deposits. Generally, payment
      terms are 30 to 45 days from the invoice date. Some of the work we perform
      for
      our customers is a part of government appropriation packages, and therefore,
      subject to the Miller Act, requiring the prime contractors (our customers)
      to
      pay all subcontractors under contracted purchase agreements first.




We
      operate a build-to-print business model. In this way, we work with clients
      from
      the design through the manufacturing stages to ensure that all projects are
      completed according to the exact client specifications with very close
      tolerances. We believe that we are one of a few companies who offer clients
      a
“one-stop-shop” for their projects covering engineering, fabrication, machining,
      quality control, assembly and production control services.





In
      recent
      years, the capital goods market experienced a slow down due to industry over
      build of product in the late 1990’s and the events of September 11, 2001.
      However, over the last several years, and based on recent projectinquiries,
      recent projects awarded and current customer demands for our services and our
      backlog, we believe the market has rebounded and that we are finding increased
      acceptance of our services.




17




A
      significant portion of our revenue is generated by a small number of customers
      who differ from period to period as we complete work on projects or commence
      new
      projects for other customers. In the nine months ended December 31, 2007, two
      customers accounted for approximately 64.2% of our revenue. Our contracts
      generally result from negotiation and from bids made pursuant to a request
      for
      proposal. Our ability to receive contract awards is dependent upon the
      contracting party’s perception of such factors as our ability to perform on
      time, our history of performance and our financial condition. We believe, based
      on increased requests for quotations, that there is an increasing demand for
      services of the type which we perform. We have changed the manner in which
      we
      treat potential business. Ranor and its predecessor had traditionally performed
      services on relatively low margins since the customers demanded more services
      without an increase in cost. We are seeking more long-term projects with a
      more
      predictable cost structure, and we are avoiding projects we do not believe
      would
      generate an adequate gross margin. Thus, in the nine months ended December
      31,
      2007, our sales and net income were $22,533,871 and $2,663,103, respectively,
      as
      compared to revenues of $13,448,811 and a net income of $298,276 respectively,
      for the nine months of the previous fiscal year. Our gross margin for the nine
      months ended December 31, 2007 was 26% as compared to 20% in the nine months
      ended December 31, 2006.




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. The products that we produce are generally for
      one or a limited number of units, and once we complete our work on a contract,
      we generally do not receive subsequent orders for the same product. However,
      we
      are currently focusing on obtaining long-term production programs and complete
      integration work within our core-competency. We receive contracts both by
      negotiation and through bids. When we bid for a contract, we may not receive
      the
      contract award. Thus, there may be a time lag between our completion of one
      contract and commencement of work on another contract. During this period,
      we
      will continue to incur our overhead expense but with lower revenue. Furthermore,
      changes in the scope of a contract may impact the revenue we receive under
      the
      contract and the allocation of manpower.




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





**Growth
      Strategy**





Our
      strategy is to leverage our core-competency as a manufacturer of high-precision,
      large metal fabrications to grow our organization in areas which have shown
      increasing demand and higher margins.





Target
      Higher Volume, Long-term Contracts


Historically,
      our orders have often consisted of either one or a small number of products
      with
      limited possibility of subsequent orders for the same product. These orders
      generally provided low margins, particularly because the services demanded
      by
      clients throughout the project lifecycles were unpredictable. Going forward
      we
      intend to concentrate on higher-volume, long-term projects with more predictable
      cost structures, and will not seek to bid on projects which we do not believe
      would generate an adequate gross margin. This strategy has already resulted
      in
      improved profitability with gross margins rising from 13% in the year ended
      March 31, 2006 to 19% in the year ended March 31, 2007 and 26% for the nine
      months ended December 31, 2007.





Rising
      energy demand along with increasing environmental concerns are likely to
      continue driving alternative energy growth, namely the solar and nuclear power
      industries. Because of our capabilities and the nature of the equipment required
      by companies in the alternative energy industries, we intend to focus our
      services in this sector. Currently, the solar industry products that we provide
      represent a significant part of our present business and growth focus as well
      as
      backlog. Our solar business is profitable and has seen several quarters of
      continued growth.




18


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, although the use of nuclear power is not without risks. Given
      our certification from the American Society of Mechanical Engineers, along
      with
      our historic relationships with suppliers in the industry, we believe that
      we
      are qualified to benefit from any increased activity in the nuclear sector
      that
      may result. One of our customers is currently involved in a variety of
      commercial nuclear reactor repairs and overhaul projects. We have manufactured
      several components needed to support this work. Another customer provides a
      complete nuclear waste storage system to commercial nuclear power plants. We
      manufacture lifting equipment for this company to use in these storage systems.
      We also see fabrication of nuclear fuel storage systems as a potential business
      area.





We have
      expanded our scope of work in to the large-scale capital equipment market for
      the medical industry. We are currently working with a customer to manufacture
      critical components for proton beam therapy machines designed to be used to
      treat cancer.





We
      plan
      to expand our current manufacturing facilities in the near-term both on-site
      and
      in other locations. This will allow us to increase our overall industry
      offerings and capacity, allowing us to handle high volume orders or niche orders
      simultaneously.





We
      plan
      to offer more integrated products and turnkey solutions to provide greater
      value
      to our customers. We may target acquisitions that could enhance our existing
      business.





As
      of
      December 31, 2007, we had a backlog of firm orders totaling approximately $39
      million.  We anticipate that approximately $10 million of this backlog will
      be shipped during the year ended March 31, 2008, and most of the balance will
      be
      shipped in the following year.  The backlog includes orders for more than
      $35 million from two customers




We
      lease
      our facilities from WM Realty Management LLC, which is an affiliated entity,
      to
      whom we sold the real property in February 2006. Because WM Realty Management
      is
      an affiliated entity and our lease with WM Realty Management is the sole source
      of funding for WM Realty Management, under generally accepted accounting
      principles, the real estate is treated as being owned by us and WM Realty
      Management’s mortgage obligations are treated as our obligations. See “Variable
      Interest Entity.”





**Critical
      Accounting Policies**




The
      preparation of the Company’s financial statements in conformity with generally
      accepted accounting principles in the United States requires our management
      to
      make assumptions, estimates and judgments that effect the amounts reported
      in
      the financial statements, including all notes thereto, and related disclosures
      of commitments and contingencies, if any. We rely on historical experience
      and
      other assumptions we believe to be reasonable in making our estimates. Actual
      financial results of the operations could differ materially from such estimates.
      There have been no significant changes in the assumptions, estimates and
      judgments used in the preparation of our audited 2007 financial statements
      from
      the assumptions, estimates and judgments used in the preparation of our 2006
      audited financial statements.




**Revenue
      Recognition and Costs Incurred**




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





Revenue
      and costs are recognized on the units of delivery method. This method recognizes
      as revenue the contract price of units of the product delivered during each
      period and the costs allocable to the delivered units as the cost of earned
      revenue. Costs allocable to undelivered units are reported in the balance sheet
      as inventory. 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.




19


Adjustments
        to cost estimates are made periodically, and losses expected to be incurred
        on
        contracts in progress are charged to operations in the period such losses
        are
        determined and are reflected as reductions of the carrying value of the costs
        incurred on uncompleted contracts. Costs incurred on uncompleted contracts
        consist of labor, overhead, and materials. Work in process is stated at the
        lower of cost or market and reflects accrued losses, if required, on uncompleted
        contracts.
 
 **Variable
        Interest Entity**
  We
        have
        consolidated WM Realty Management LLC, a variable interest entity from which
        we
        lease our real estate to conform to FASB Interpretation No. 46, “Consolidation
        of Variable Interest Entities” (FIN 46). We have also adopted the revision to
        FIN 46, FIN 46R, which clarified certain provisions of the original
        interpretation and exempted certain entities from its requirements. ****
  **Income
        Taxes**
  Our
        fiscal year ends on March 31. 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, 2007, we had tax assets of approximately $745,000 from net operating
        loss
        carry-forwards. Pursuant to Section 382 of the Internal Revenue Code, annual
        utilization of these losses is very limited as defined in the Treasury
        Regulations. The change in ownership resulting from our acquisition of Ranor
        limits the annual tax benefit of carry-forwards to approximately
        $33,000.
 
 **New
        Accounting Pronouncements**
 
 In
        December 2007, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised
        2007), *Business
        Combinations* ,
        which
        replaces SFAS No 141. The statement retains the purchase method of accounting
        for acquisitions, but requires a number of changes, including changes in
        the way
        assets and liabilities are recognized in the purchase accounting. It also
        changes the recognition of assets acquired and liabilities assumed arising
        from
        contingencies, requires the capitalization of in-process research and
        development at fair value, and requires the expensing of acquisition-related
        costs as incurred. SFAS No. 141R is effective for the Company’s fiscal year
        beginning April 1, 2009 and will apply prospectively to business
        combinations completed on or after that date.
 
 In
        December 2007, the FASB issued SFAS No. 160, *Noncontrolling
        Interests in Consolidated Financial Statements, an amendment of ARB
        51* ,
        which
        changes the accounting and reporting for minority interests. Minority interests
        will be recharacterized as noncontrolling interests and will be reported
        as a
        component of equity separate from the parent’s equity, and purchases or sales of
        equity interests that do not result in a change in control will be accounted
        for
        as equity transactions. In addition, net income attributable to the
        noncontrolling interest will be included in consolidated net income on the
        face
        of the income statement and, upon a loss of control, the interest sold, as
        well
        as any interest retained, will be recorded at fair value with any gain or
        loss
        recognized in earnings. SFAS No. 160 is effective for the Company’s fiscal
        years beginning April 1, 2009 and will apply prospectively, except for the
        presentation and disclosure requirements, which will apply retrospectively.
        The
        adoption of SFAS No. 160 does not have an effect on our financial position
        or
        results of operation.
  20
  On
        July 1, 2007, we adopted the provisions of FASB Interpretation No. 48
        (“FIN 48”), *Accounting
        for Uncertainty in Income Taxes – an interpretation
        of FASB Statement No. 109,* which
        provides a financial statement recognition threshold and measurement attribute
        for a tax position taken or expected to be taken in a tax return. Under FIN
        48,
        we may recognize the tax benefit from an uncertain tax position only if it
        is
        more likely than not that the tax position will be sustained on examination
        by
        the taxing authorities, based on the technical merits of the position. The
        tax
        benefits recognized in the financial statements from such a position should
        be
        measured based on the largest benefit that has a greater than 50% likelihood
        of
        being realized upon ultimate settlement. FIN 48 also provides guidance on
        derecognition of income tax assets and liabilities, classification of current
        and deferred income tax assets and liabilities, accounting for interest and
        penalties associated with tax positions, and income tax disclosures. The
        adoption of FIN 48 does not have a material effect on our financial position
        or
        results of operation.
  On
        July 1, 2007, we adopted Emerging Issues Task Force Issue No. 06-2
        (“EITF 06-2”), *Accounting
        for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement
        No. 43* .
        EITF
        06-2 requires companies to accrue the costs of compensated absences under
        a
        sabbatical or similar benefit arrangement over the requisite service period.
        The
        adoption of EITF 06-2 does not have an affect the Company’s financial position
        or results of operation.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 provides
        reporting entities an option to report selected financial assets, including
        investment securities designated as available for sale, and liabilities,
        including most insurance contracts, at fair value. SFAS 159 establishes
        presentation and disclosure requirements designed to facilitate comparisons
        between companies that choose different measurement attributes for similar
        types
        of assets and liabilities. The standard also requires additional information
        to
        aid financial statement users' understanding of a reporting entity's choice
        to
        use fair value on its earnings and also requires entities to display on the
        face
        of the balance sheet the fair value of those assets and liabilities for which
        the reporting entity has chosen to measure at fair value. SFAS 159 is effective
        as of the beginning of a reporting entity's first fiscal year beginning after
        November 15, 2007. Early adoption is permitted as of the beginning of the
        previous fiscal year provided the entity makes that choice in the first 120
        days
        of that fiscal year and also elects to apply the provisions of SFAS 157.
        The
        Company adopted SFAS No. 159. The application of SFAS No. 159 is not expected
        to have a material effect on the Company’s financial position or results of
        operations.
  **Results
        of Operations**
  **Three
        Months Ended December 31, 2007 and 2006**
  The
        following table sets forth information from our statements of operations
        for the
        three months ended December 31, 2007 and 2006, in dollars and as a percentage
        of
        revenue (dollars in thousands):
  Changes
                  Three MonthsThree
                  Months Ended December 31,
              
              Ended
                  December 31,2007
              
              2006
              
              2006
                  to 2007Amount
              
              Percent
              
              Amount
              
              Percent
              
              Amount
              
              PercentNet
                  sales
              
              $
              9,610
              
              
              100
              %
              $
              5,534
              
              
              100
              %
              $
              4,076
              
              
              72
              %Cost
                  of sales
              
              
              7,030
              
              
              73
              %
              
              4,536
              
              
              82
              %
              
              2,494
              
              
              54
              %Gross
                  Profit
              
              
              2,580
              
              
              27
              %
              
              998
              
              
              18
              %
              
              1,582
              
              
              164
              %Payroll
                  and related costs
              
              
              294
              
              
              3
              %
              
              334
              
              
              6
              %
              
              (40
              )
              
              (12
              )%Professional
                  expense
              
              
              74
              
              
              1
              %
              
              154
              
              
              3
              %
              
              (80
              )
              
              (52
              )%Selling,
                  general and administrative
              
              
              135
              
              
              1
              %
              
              59
              
              
              1
              %
              
              76
              
              
              129
              %Total
                  operating expenses
              
              
              503
              
              
              5
              %
              
              547
              
              
              10
              %
              
              (44
              )
              
              (8
              )%Income
                  (loss) from operations
              
              
              2,077
              
              
              22
              %
              
              451
              
              
              8
              %
              
              1,626
              
              
              382
              %Interest
                  expense, net
              
              
              (124
              )
              
              (1
              )%
              
              (142
              )
              
              (3
              )%
              
              18
              
              
              (13
              )%Finance
                  costs
              
              
              (7
              )
              
              0
              %
              
              (1
              )
              
              0
              %
              
              (6
              )
              
              600
              %Income
                  before income taxes
              
              
              1,946
              
              
              21
              %
              
              308
              
              
              5
              %
              
              1,638
              
              
              576
              %Provision
                  for income taxes, net
              
              
              (569
              )
              
              (6
              )%
              
              —
              
              
              —
              
              
              (569
              )
              
              —Income
                  to common shareholders
              
              $
              1,377
              
              
              15
              %
              $
              288
              
              
              5
              %
              $
              1,089
              
              
              378
              %
  21
  Sales
        increased by $4,076,000 or 72%, from $5,534,000 for the quarter ended December
        31, 2006 to $9,610,000 for the quarter ended December 31, 2007. This increase
        in
        sales reflected improved market conditions for capital goods and increasing
        acceptance of us as a contract manufacturer for major projects.
  Our
        cost
        of sales for the quarter December 31, 2007 increased by $2,474,000 to $7,030,000
        an increase of 54%, from $4,556,000 for quarter ended December 31, 2006.
        The
        increase in cost of sales reflected the increase in sales and gross margin,
        with
        the result that our gross margin increased from 18% to 27%.
  Our
        payroll and related costs were $294,000 in the quarter ended December 31,
        2007
        as compared to $334,000 for the quarter ended December 31, 2006. The $40,000
        (12%) decrease in payroll was partly attributable to the decrease in
        compensation of sales persons.
  Professional
        fees decreased from $154,000 to $74,000 for the quarters ended December 31,
        2006
        and 2007, respectively. The professional fees include the legal and accounting
        fees.  This decrease was attributable a decrease in the number of
        regulatory filings of the company and the resulting decrease in associated
        fees.
  Selling,
        administrative and other expenses for the quarter ended December 31, 2007
        were
        $135,000 as compared to $59,000 for quarter ended December 31, 2006, an increase
        of $76,000 or129%. The reasons for the increase in sales and general
        administrative expenses included the additional costs of investor relations
        and
        computer and other supplies.
 
 On
        September 1, 2007, Techprecision entered into contract with CCG Investor
        Relations, Inc. (CCG) whereby CCG agreed to provide investor relation services
        to the Company for a period of one year. The Company will pay CCG $5,000
        per
        month for the first six months of the contract and $7,000 per month for the
        remaining six months. The monthly retainer was based on a $200 per hour blended
        billing rate. The contract could be terminated after the initial six months,
        and
        following the primary term of one year the contract would continue on a month
        to
        month basis unless terminated by either party providing 30 days written
        notice.
 
 As
        additional payment, the Company issued 112,500 of warrants to CCG, exercisable
        into 112,500 shares of restricted common stock at a strike price of $1.40
        per
        share, vesting on September 30, 2007, and an additional 112,500 options with
        the
        same terms, to vest March 31, 2008.
 
 The
        warrant shall have a “Cashless Exercise Provision” if the underlying shares are
        not registered at the time CCG chooses to exercise the warrants. Under the
        cashless exercise provision, instead of paying the aggregate purchase price
        for
        the shares being purchased upon exercise of the warrants in cash, the holder
        will forfeit a number of shares underlying the warrants with a "fair market
        value" equal to such aggregate exercise price. We will not receive additional
        proceeds from the exercise of the warrants, to the extent that the warrants
        are
        exercised by cashless exercise.
  Using
        the
        Black-Scholes options pricing formula assuming a risk free rate of 5%,
        volatility of 28.5 percent, 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 options
        were
        calculated at $0.0001 per warrant. Since the contract permits the Company
        to
        deliver unregistered shares, the Company has the control in settling the
        contract by issuing equity and the cost of warrants was added the additional
        paid in capital.
  22
  Interest
        expense for the quarter ended December 31, 2007 was $124,000 compared to
        $142,000 for the quarter ended December 31, 2006. The decrease of $18,000
        (13%)
        is a result of refinancing the short term loan of WM Realty with a longer
        term
        loan at a substantially lower interest rate. The refinancing of the loan
        also
        eliminated $150,000 amortization expenses of deferred short term loan costs.
  As
        a
        result of the foregoing, our net income allocable to common stockholders
        was
        $1,377,000 ($0.13 per share basic and $0.05 per share diluted) in the three
        months ended December 31, 2007 as compared to the gain of $288,000 ($0.03
        per
        share basic and $0.02 diluted) in the three months ended December 31,
        2006.
  **Nine
        Months Ended December 31, 2007 and 2006**
  The
        following table sets forth information from our statements of operations
        for the
        nine months ended December 31, 2007 and 2006, in dollars and as a percentage
        of
        revenue (dollars in thousands):
  Nine
                  Months Ending December 31st
              
              Change
                  Nine Months
                Ended
                  December 31,2007
              
              2006
              
              2006
                  to 2007Amount
              
              Percent
              
              Amount
              
              Percent
              
              Amount
              
              PercentNet
                  sales
              
              $
              22,534
              
              
              100
              %
              $
              13,449
              
              
              100
              %
              $
              9,085
              
              
              68
              %Cost
                  of sales
              
              
              16,779
              
              
              74
              %
              
              10,808
              
              
              80
              %
              
              5,971
              
              
              55
              %Gross
                  profit
              
              
              5,755
              
              
              26
              %
              
              2,641
              
              
              20
              %
              
              3,114
              
              
              118
              %Payroll
                  and related costs
              
              
              886
              
              
              4
              %
              
              985
              
              
              7
              %
              
              (99
              )
              
              (10
              )%Professional
                  expense
              
              
              303
              
              
              1
              %
              
              306
              
              
              2
              %
              
              (3
              )
              
              (1
              )%Selling,
                  general and Administrative
              
              
              286
              
              
              1
              %
              
              332
              
              
              2
              %
              
              (46
              )
              
              (14
              )%Total
                  operating expenses
              
              
              1,475
              
              
              6
              %
              
              1,623
              
              
              12
              %
              
              (149
              )
              
              (9
              )%Income
                  (loss) from operations
              
              
              4,280
              
              
              19
              %
              
              1,018
              
              
              8
              %
              
              3,262
              
              
              320
              %Interest
                  expense, net
              
              
              (389
              )
              
              (2
              )%
              
              (506
              )
              
              (4
              )%
              
              117
              
              
              (23
              )%Finance
                  costs
              
              
              (13
              )
              
              (0
              )%
              
              (214
              )
              
              (2
              )%
              
              201
              
              
              (94
              )%Income
                  before income taxes
              
              
              3,878
              
              
              17
              %
              
              298
              
              
              2
              %
              
              3,580
              
              
              1201
              %Provision
                  for income taxes, net
              
              
              (1,215
              )
              
              (
                  5
              )%
              
              —
              
              
              —
              
              
              (1,215
              )
              
              —Net
                  Income
              
              
              2,663
              
              
              12
              %
              
              298
              
              
              2
              %
              
              2,365
              
              
              794
              %Deemed
                  dividend
              
              
              —
              
              
              —
              
              
              (388
              )
              
              (3
              )%
              
              388
              
              
              —Income
                  (Loss) to common shareholders
              
              $
              2,663
              
              
              12
              %
              $
              (90
              )
              
              (1
              )%
              $
              2,753
              
              
              —
              %
  23
  Sales
        increased by $9,085,000 or 68%, from $13,449,000 for the nine months ended
        December 31, 2006 to $22,534,000 for the nine months ended December 31, 2007.
        This increase in sales reflected improved market conditions for capital goods
        and increasing acceptance of us as a contract manufacturer for major projects.
  Our
        cost of sales for the nine months ended December 31, 2007 increased by
        $5,971,000 to $16,779,000 an increase of 55%, from $10,808,000 for the nine
        months ended December 31, 2006. This increase was less than the increase
        in
        sales, resulting in an improvement in the gross margin from 20% to 26%. The
        increase in gross profit margin reflects the sales of products in which we
        have
        a competitive production advantage.
  Our
        payroll and related costs were $866,000 for the nine months ended December
        31,
        2007 as compared to $985,000 for the nine months ended December 31, 2006.
        The
        $99,000 (10%) decrease in payroll was primarily
        attributableto the termination of the management agreement with
        Techprecision LLC and decrease in compensation of the salespersons.
  Professional
          fees, associated with regulatory filings were substantially unchanged,
          decreasing from $306,000 to $303,000 for the nine months ended December
          31, 2006
          and 2007, respectively. The professional services and related fees, associated
          with certain regulatory filings, had continued from 2006 and were completed
          in
          October 2007.
  Total
        selling, administrative and other expenses for the nine months ended December
        31, 2007 were $286,000 as compared to $332,000 for the nine months ended
        December 31, 2006, a decrease of $46,000 or 14%. The principal reasons for
        the
        decrease in selling and general administration expenses were the lower SEC
        filing fees and insurance costs.
  Interest
        expense for the nine months ended December 31, 2007 was $390,000 as compared
        to
        $506,000 for the nine months ended December 31, 2006. The decrease of $117,000
        (23%) is a result of refinancing the short term loan of WM Realty with a
        longer
        term loan at a substantially lower interest rate. The refinancing of the
        WM
        Realty loan also eliminated the financing costs of the previous loan (i.e.
        the
        amortization expenses of deferred costs of the short term loan) by $208,000
        (98%).
  During
        the nine months ended December 31, 2006, we were required to adjust the
        conversion price at which our Series A preferred stock was convertible into
        common stock, due to earnings before interest, depreciation and amortization
        (EBITDA) being below an agreed upon target level. The beneficial effect of
        the
        reduction in conversion price of preferred stock to common stock from $0.285
        to
        $0.24225 was $.04275 per share for a total of $388,233 which was recognized
        as a
        preferred stock deemed dividend. This was a non-cash transaction. According
        to May 2007 agreement with the preferred shareholders, there will be no further
        change in the conversion price of the preferred to common shares.
  As
        a
        result of the foregoing, our net income allocable to common stockholders
        was
        $2,663,000 ($0.26 per share basic and $0.10 per share diluted) in the nine
        months ended December 31, 2007 as compared to the loss of $90,000 ($0.01
        per
        share) in the three months ended December 31, 2006.
  **Liquidity
        and Capital Resources**
  At
        December 31, 2007, we had working capital of $5,905,000 as compared with
        working
        capital of $3,398,000 at March 31, 2007, an increase of $2,507,000 reflecting
        our increased level of business. The following table sets forth information
        as
        to the principal changes in the components of our working capital (dollars
        in
        thousands).
  Category
              
              December
                  31,
                2007
              
              March
                  31,
                2007
              
              Change
                Amount
              
              Percentage
                ChangeCash
                  and cash equivalents
              
              $
              1,584
              
              $
              1,444
              
              $
              140
              
              
              10
              %Accounts
                  receivable, net
              
              
              5,131
              
              
              2,702
              
              
              2,429
              
              
              90
              %Costs
                  incurred onuncompleted
                  contracts
              
              
              5,584
              
              
              1,226
              
              
              4,358
              
              
              352
              %Prepaid
                  expenses
              
              
              950
              
              
              270
              
              
              680
              
              
              252
              %Accounts
                  payable
              
              
              2,169
              
              
              1,299
              
              
              870
              
              
              67
              %
  24
  The
        cash
        flows from operations were $756,000, in the nine months ended December 30,
        2007
        as compared to $971,000 in 2006. The decrease in cash flows from operations
        of
        $215,000 was the net effect of substantial increase in the cash outflows
        for
        cost of uncompleted contracts and accounts receivable as offset by the increase
        in deferred revenues and accounts payable, in 2007.
  The
        net
        cash inflow from financing activities was $75,000 as compared to outflows
        of
        $435,000 during the nine months ended December 31, 2007 and 2006. The principal
        payment of the Sovereign bank notes was $429,000 the auto loan $4,000 and
        the
        Amalgamated mortgage note $26,000 in the nine months ended December 31, 2007.
        WM
        Realty had a net income of $85,000 in the nine months ended December 31,
        2007.
        WM Realty repaid $60,000 loan from a shareholder, had an addition to its
        capital
        of $17,500 and made a distribution of $82,000 to its shareholders in the
        nine
        months ended December 31, 2007. WM Realty’s deficit was $309,000 as of December
        31, 2007.
  The
        amount of cash expended for additional property, plant and equipment was
        $345,000 and $231,000 for the nine months ended December 31, 2007 and 2006,
        respectively. We made a deposit of $346,000 with the manufacturers to acquire
        additional equipment in 2007. The exercise of 1,510,000 warrants at a price
        of
        $0.436 provided $658,436 of additional cash, during the three months ended
        December 31, 2007.
  The
        cash
        inflows from operations and financing exceeded the $691,000 investment of
        cash
        in plant and equipment by $140,000, in the nine months ended December 31,
        2007.
        In 2006, the cash flows from operation of $666,000 were used to pay off loans
        and acquire additional plant and equipment. The net increase in cash was
        $305,000 in the nine months ended December 31, 2006.
  Pursuant
        to FASB Interpretation No. 46, we are required to include the real property
        that
        we sold to WM Realty at our historical cost and record the liability as a
        liability on our balance sheet. In October 2006, WM Realty refinanced its
        real
        estate mortgage with a ten-year mortgage with interest at 6.75%. As a result,
        our short term liability with respect to this mortgage reflects only current
        amortization. The cost of refinancing, which was approximately $104,000,
        is
        amortized over the term of the loan. Further, WM Realty used the proceeds
        of the
        mortgage loan to pay us the money we advanced to WM Realty at the time of
        its
        initial purchase of the real estate from us in February 2006.
  As
        part
        of the October 2006 refinancing of the mortgage given by WM Realty on the
        property leased by us, a new mortgage of $3.2 million was placed on the property
        and the existing mortgage of $3.1 million was paid off. The new mortgage
        has a
        term of ten years, bears interest at 6.75% per annum, and provides for monthly
        payments of principal and interest of $21,000. The monthly payments are based
        on
        a thirty-year amortization schedule, with the unpaid principal being due
        in full
        on November 1, 2016. WM Realty has the right to prepay the mortgage note
        upon
        payment of a prepayment premium of 5% of the amount prepaid if the prepayment
        is
        made during the first two years, and declining to 1% of the amount prepaid
        if
        the prepayment is made during the ninth or tenth year.
  During
        the nine months ended December 31, 2007, WM Realty had a net income of $85,000.
        The stockholders deficit of the WM Realty was $309,000, on December 31, 2007.
        During the nine months ended December 31, 2007, WM Realty shareholder made
        a net
        capital contribution of $17,000 and a distribution of $82,000 was made to
        the
        members.
  The
        loan
        and security agreement with Sovereign Bank, pursuant to which we borrowed
        $4,000,000 on a term loan basis in connection with the acquisition of Ranor,
        and, as a result of a June 2007 amendment to the loan and security agreement,
        we
        have a $2,000,000 revolving credit facility and a $3,000,000 capital expenditure
        facility. Pursuant to the agreement, Ranor is required to maintain a ratio
        of
        earnings available for fixed charges to fixed charges of at least 1.2 to
        1, and
        an interest coverage ratio of at least 2:1. The interest coverage ratio is
        the
        ratio of earnings before interest and taxes to current interest payments.
        The
        agreement also limits our capital expenditures to $500,000 per year.
  The
        term
        note is due on March 1, 2013, and is payable in 28 quarterly installments
        of
        $143,000. The note bears interest at 9% per annum through December 31, 2010
        and
        at prime plus 11⁄2% thereafter. At March 31, 2007 the principal balance due on our
        term loan to Sovereign Bank was $3,429,000.
  25
 
 The
        revolving note bears interest at prime plus 1⁄2%, and we have the right to borrow
        at a LIBOR rate plus 300 basis points. We may borrow, subject to the borrowing
        formula at any time prior to June 30, 2009. Any advances under the revolving
        note become due on June 30, 2009. The maximum borrowing under the revolving
        note
        is the lesser of (i) $2,000,000 or (ii) the sum of 70% of eligible accounts
        receivable and 40% of eligible inventory. At December 31, 2007, there were
        no
        borrowings under the line and maximum available under the borrowing formula
        was
        $2,000,000
  Under
        our
        capital expenditures facility, we may borrow up to $3,000,000 until November
        30,
        2008, with interest only payable through November 30, 2008 and the principal
        to
        be amortized over a five-year term commencing December 1, 2008. As of December
        31, 2007, we had not borrowed any money under this facility.
  The
        securities purchase agreement pursuant to which we sold the series A preferred
        stock and warrants to Barron Partners provides that, for two years after
        the
        closing, which is the period ending February 24, 2008, we will not incur
        indebtedness equal to more than three times EBITDA for the preceding four
        quarters. The agreement also gives Barron Partners a right of first refusal
        on
        future equity financings, which may affect our ability to raise funds from
        other
        sources if the need arises.
  While
        we
        believe that the $2,000,000 revolving credit facility, which remained unused
        as
        of December 31, 2007 and terminates in June 2009, our $3,000,000 capital
        expenditure facility and our cash flow from our operations should be sufficient
        to enable us to satisfy our cash requirements at least through the end of
        fiscal
        2008, it is possible that we may require additional funds. In the event that
        we
        make an acquisition, we may require additional financing for the acquisition.
        However, we do not have any current plans for any acquisition, and we cannot
        give any assurance that we will make any acquisition. We have no commitment
        from
        any party for additional funds; however, the terms of our agreement with
        Barron
        Partners, particularly Barron Partners’ right of first refusal, may impair our
        ability to raise capital in the equity markets since potential investors
        are
        often reluctant to negotiate a financing when another party has a right to
        match
        the terms of the financing.
  In
        view
        of expected increase in our future sales and related plant and equipment
        expansion plan, On November 30, 2007, Ranor entered the third amendatory
        agreement with Sovereign Bank. Under the new agreement the capital expenditure
        limit was increased to $3,000,000 and the variable rate interest was set
        at the
        prime plus one half of one per cent per annum, through November 30, 2008
        and the
        cost of funds rate plus 2.25% per year thereafter until November 30, 2013.
        The
        Company agreed to pay only the interest until November 30, 2008. After that
        date
        the Company will repay the principal, on a monthly basis, in the amount
        sufficient to amortize the outstanding balance over a five year schedule.
  In
        October 2007, a registration statement covering 2,000,000 shares of common
        stock, of which 1,900,000 are shares of common stock issuable upon exercise
        of
        warrants, was declared effective by the Securities and Exchange Commission.
  On
          December 7, 2007, Ranor acquired all the equipment of a company called
          Vertex
          Tool and Die, Inc. for $150,000. Also,
          Ranor assumed Vertex’s property lease obligation. The current lease expires
          August 31, 2009 and Ranor has the option to extend for an additional term
          of
          five years.
  As
            of
            December 31, 2007, the Company had not borrowed any money under the capital
            expenditures facility or line of credit.
  **Item
            3.**  **Controls
            and Procedures**
  As
            of the
            end of the period covered by this report, our chief executive officer
            and chief
            financial officer evaluated the effectiveness of our disclosure controls
            and
            procedures. Based on their evaluation, the chief executive officer and
            chief
            financial officer concluded that our disclosure controls and procedures
            are
            effective in alerting them to material information that is required to
            be
            included in the reports that we file or submit under the Securities Exchange
            Act
            of 1934.
  26
  Our
            principal executive officer and principal financial officer have concluded
            that
            there were no significant changes in our internal controls or in other
            factors
            that could significantly affect these controls during the quarterly period
            covered by this report.
  **PART
            II.****OTHER
            INFORMATION**
  **Item
            4. Submission of Matters to a Vote of Security Holders**
  On
            August
            21, 2007, the holders of 6,746,200 shares of common stock, or 67.1% of
            our
            outstanding common stock voted (i) for the election of James G. Reindl,
            Stanley
            A. Youtt, Michael Holly, Larry Steinbrueck and Louis A. Winoski as directors,
            and (ii) approved the selection of the firm of Tabriztchi & Co., CPA, P.C.
            as our independent registered public accounting firm for the year ending
            March
            31, 2008. An information statement describing these matters was mailed
            to all
            stockholders on December 27, 2007, and the actions became effective 20
            days
            thereafter.
  27
  **Item
            5.**  **Exhibits
            and Reports on Form 8-K**
  31.1
                  Certification
                      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                      Act31.2
                  Certification
                      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                      Act32.1
                  Certification
                      of Chief Executive and Financial Officer pursuant to Section
                      906 of the
                      Sarbanes-Oxley Act
 
 **SIGNATURES**
  In
            accordance with the requirements of the Exchange Act, the registrant
            caused this
            report to be signed on its behalf by the undersigned, thereunto duly
            authorized.
  **TECHPRECISION
                      CORPORATION**
                    
                    (Registrant)Dated:
                      February 14, 2008
                  /s/
                      James G.
                      ReindlJames
                      G. Reindl, Chief Executive OfficerDated:
                      February 14, 2008
                  /s/
                      Mary
                      DesmondMary
                      Desmond, Chief Financial
                      Officer
  28