**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





**June
      30, 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 o No x





As
      of
      August 10, 2007 there are 10,053,000 shares of the common stock, par value
      $.0001 per share, outstanding.





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









Index





PagePart
                I. Financial InformationItem
                1. Financial StatementsUnaudited
                balance sheet at June 30, 2007
            
            
            2Unaudited
                statements of operations for the three months ended June 30, 2007
                and
                2006
            
            
            3Unaudited
                statement of stockholders’ equity for the three months ended June 30,
                2007
            
            
            4Unaudited
                statements of cash flows for the three months ended June 30, 2007
                and
                2006
            
            
            5Notes
                to financial statements
            
            
            6Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations
            
            
            12Item
                3. Controls and Procedures
            
            
            19Part
                II. Other InformationItem
                6. Exhibits
            
            
            19










**TECHPRECISION
      CORPORATION**


**CONSOLIDATED
      BALANCE SHEETS**


**(unaudited)**




**JUNE
                30,**
            
            **MARCH
                31****2007**
            
            **2007****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            1,231,265
            
            $
            1,443,998Accounts
                receivable, less allowance for doubtfulaccounts
                of $25,000 at June 30 and March 31, 2007
            
            
            3,372,823
            
            
            2,684,970Other
                receivables
            
            
            15,712
            
            
            16,737Costs
                incurred on uncompleted contracts,net
                of allowance for loss and progress billings
            
            
            2,236,139
            
            
            1,266,445Inventories-
                raw materials
            
            
            196,152
            
            
            183,498Prepaid
                expenses
            
            
            157,035
            
            
            270,321Total
                current assets
            
            
            7,209,126
            
            
            5,865,969Property,
                plant and equipment, net
            
            
            2,511,488
            
            
            2,561,054Deferred
                loan costs, net
            
            
            134,462
            
            
            138,718Total
                assets
            
            $
            9,855,076
            
            $
            8,565,741**CURRENT
                LIABILITIES**Accounts
                payable
            
            $
            2,102,309
            
            $
            1,298,643Accrued
                expenses
            
            
            491,950
            
            
            498,626Current
                maturity of long-term debt
            
            
            610,623
            
            
            610,814Loan
                from stockholder
            
            
            30,000
            
            
            60,000Total
                current liabilities
            
            
            3,234,882
            
            
            2,468,083**LONG-TERM
                DEBT**Notes
                payable- noncurrent
            
            
            5,867,929
            
            
            6,020,440**STOCKHOLDERS’
                EQUITY**Preferred
                stock- par value $.0001 per share, 9,000,000 shares authorized,
                ofwhich
                9,000,000 are designated as Series A Preferred Stock, with
                7,752,462shares
                issued and outstanding at June 30 and March 31, 2007
            
            
            2,835,278
            
            
            2,835,278Common
                stock - par value $.0001, authorized 90,000,000, 10,053,000
                and10,049,000
                issued and outstanding on June 30, and March 31, 2007,
                respectively.
            
            
            1,006
            
            
            1,006Paid
                in capital
            
            
            1,756,643
            
            
            1,766,423Accumulated
                deficit
            
            
            (3,840,662
            )
            
            (4,525,489
            )Total
                stockholders’ equity
            
            
            752,265
            
            
            77,218$
            9,855,076
            
            $
            8,565,741




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




2


**TECHPRECISION
                CORPORATION****CONSOLIDATED
                STATEMENTS OF OPERATIONS****FORTHE
                THREE MONTHS ENDED JUNE 30, 2007 AND
                2006**


**(unaudited)**




**Three
                months ended June 30,****2007**
            
            **2006**Net
                sales
            
            $
            6,553,112
            
            $
            4,198,530Cost
                of sales
            
            
            4,877,572
            
            
            3,410,005Gross
                profit
            
            
            1,675,540
            
            
            788,525Operating
                expenses:Salaries
                and benefits
            
            
            344,291
            
            
            292,454Professional
                fees
            
            
            44,045
            
            
            99,908Selling,
                general and administrative
            
            
            70,620
            
            
            138,087Total
                operating expenses
            
            
            458,956
            
            
            530,449Income
                from operations
            
            
            1,216,584
            
            
            258,076Other
                income (expenses)Interest
                expense
            
            
            (
                132,438
            )
            
            (
                183,239
            )Finance
                cost
            
            
            (2,589
            )
            
            (150,477
            )Interest
                income
            
            
            275
            
            
            212Total
                other income
            
            
            (134,752
            )
            
            (333,504
            )Income
                (loss) before income taxes
            
            
            1,081,832
            
            
            (
                75,428
            )Provision
                for income taxes
            
            
            (397,005
            )
            
            --Net
                Income (loss)
            
            $
            684,827
            
            $
            (
                75,428
            )Preferred
                stock deemed dividend
            
            
            --
            
            
            (388,233
            )Net
                Income (loss) to common stockholders
            
            
            684,827
            
            
            (463,661
            )Net
                income (loss) per share of common stock-basic
            
            
            .07
            
            
            (.05
            )Net
                income (loss) per share of common stock-diluted
            
            
            .04
            
            
            (.05
            )Weighted
                average number of shares of common stock outstanding
                -Basic
            
            
            10,051,000
            
            
            9,991,462Weighted
                average number of shares of common stock outstanding
                -Diluted
            
            
            19,313,683
            
            
            9,991,462





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


3





**TECHPRECISION
                CORPORATION****CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS’ DEFICIT****FOR
                THE THREE MONTHS ENDED JUNE 30, 2007****(unaudited)**





Warrants
            
            Preferred
                Stock
            
            Common
                Stock
            
            Paid
                in
            
            AccumulatedOutstanding
            
            Shares
            
            Amount
            
            Shares
            
            Amount
            
            Capital
            
            Deficit
            
            TotalBalance,
                March 31, 2007
            
            
            11,220,000
            
            
            7,752,462
            
            
            2,835,278
            
            
            10,049,000
            
            
            1,006
            
            
            1,766,423
            
            
            (4,525,489
            )
            
            77,218Distribution
                of capital - WM Realty
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (10,500
            )
            
            
            
            
            (10,500
            )Issuance
                of shares for services
            
            
            
            
            
            
            
            
            
            
            
            4,000
            
            
            
            
            
            720
            
            
            
            
            
            720Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            684,827
            
            
            684,827Balance
                June 30, 2007
            
            
            11,220,000
            
            
            7,752,462
            
            
            2,835,278
            
            
            10,053,000
            
            
            1,006
            
            
            1,756,643
            
            
            (3,840,662
            )
            
            752,265




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




4


**TECHPRECISION
        CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**




**Three
                months ended,**
                **June
                  30****2007**
            
            **2006****DECREASE
                IN CASH AND CASH EQUIVALENTS CASH FLOWS****FROM
                OPERATING ACTIVITIES**Net
                income (loss) for the period
            
            
            684,827
            
            
            (75,432
            )Noncash
                items included in net loss:Depreciation
                and amortization
            
            
            117,295
            
            
            256,030Shares
                issued for services
            
            
            720
            
            
            7,561Changes
                in assets and liabilities:Accounts
                receivable
            
            
            (686,828
            )
            
            (270,460
            )Inventory
            
            
            (12,654
            )
            
            (
                7,149
            )Costs
                on uncompleted contracts
            
            
            (969,695
            )
            
            198,126Prepaid
                expenses
            
            
            113,286
            
            
            166,013Accounts
                payable and accrued expenses
            
            
            796,989
            
            
            176,263Net
                cash used in operating activities
            
            
            43,940
            
            
            450,952CASH
                FLOWS USED IN INVESTING ACTIVITIESPurchases
                of property, plant and equipment
            
            
            (63,472
            )
            
            (19,626
            )Net
                cash used in investing activities
            
            
            (63,472
            )
            
            (19,626
            )CASH
                FLOWS FROM FINANCING ACTIVITIESPayment
                of notes
            
            
            (152,701
            )
            
            (144,282
            )Payment
                of mortgage note
            
            
            (30,000
            )
            
            (100,000Additional
                paid-in capital
            
            
            (10,500
            )
            
            --Net
                cash provided by (used in) financing activities
            
            
            (193,201
            )
            
            (244,282
            )Net
                increase (decrease) in cash and cash equivalents
            
            
            (212,733
            )
            
            187,044CASH
                AND CASH EQUIVALENTS, beginning of period
            
            
            1,443,998
            
            
            492,801CASH
                AND CASH EQUIVALENTS, end of period
            
            $
            1,231,265
            
            $
            679,845Supplemental
                Disclosures of Cash Flows InformationCash
                paid during the period for:Interest
                expense
            
            $
            132,438
            
            $
            186,972Income
                taxes
            
            $
            2,985
            
            $
            3,100




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





SUPPLEMENTAL
                INFORMATION - NONCASH TRANSACTIONS




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 and is reflected as a preferred stock
                deemed
                dividend.




5


**TECHPRECISION
        CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**


In
                the three month period ended June 30, 2006, the Company issued 42,000
                shares to employees of the Company. The shares were valued at $.18
                per
                share, or a total of $7,561. The 42,000 shares are part of a total
                grant
                of 126,000, of which 8,000 shares were cancelled.  These shares
                vested immediately as to the remaining 78,000 shares, 40,000 shares
                vested
                at- February 24, 2007. These shares were valued at $.18 per share,
                or
                total of $7,200. The balance of shares will vest on February 24,
                2008.
                None of these shares were issued to officers or directorsIn
                the three month period ended June 30, 2007, the Company issued  7,000
                shares to employees of the Company, of which 3,000 shares were issued
                to
                the Company’s chief financial officer. The shares were valued at $.18 per
                share, or a total of $ 1,260. The 7,000 shares are part of a total
                grant
                of 15,000 shares, of which 7,000 shares, including the 3,000 shares
                granted to the chief financial officer, vested immediately and the
                remaining 8,000 shares vest in two annual installments-February 24,
                2008
                and February 24, 2009.




**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 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. NEW ACCOUNTING PRONOUNCEMENTS**




In
      July
      2006, FASB issued Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes,” which is effective for fiscal years beginning after
      December 15, 2006. The Interpretation prescribes a recognition threshold
      and measurement attribute for the financial statement recognition and
      measurement of a tax position taken or expected to be taken in a tax return.
      The
      Interpretation also provides guidance on derecognition, classification, interest
      and penalties, accounting for interim periods, disclosure, and transition.
      The
      Company will adopt the Interpretation on January 1, 2007. The Company is in
      the process of determining the impact of the interpretation on our financial
      position and results of operations.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS
      No. 157”). SFAS No. 157 provides a framework for measuring fair value in
      accordance with GAAP, and expands disclosures regarding fair value measurements
      and the effect on earnings. SFAS No. 157 is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and interim periods
      within those fiscal years. The Company is in the process of evaluating the
      impact SFAS No. 157 will have on its financial position and results of
      operations.





In
      September 2006, the U.S. Securities and Exchange Commission (“SEC”) released
      Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year
      Misstatements when Quantifying Misstatements in Current Year Financial
      Statements,” (“SAB No. 108”), which provides interpretive guidance on the SEC’s
      views regarding the process of quantifying the materiality of financial
      statement misstatements. SAB No. 108 is effective for years ending after
      November 15, 2006. The application of SAB No. 108 is not expected
      to have a material effect on the Company’s financial position and results
      of operations.




6




**TECHPRECISION
        CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**


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 is currently evaluating the effect, if any, the
      adoption of SFAS 159 will have on our financial condition, results of operations
      and cash flow.




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




As
      of
      June 30, 2007 and March 31, 2007 property, plant and equipment consisted of
      the
      following:




June
                30, 2007
            
            March
                31, 2007Land
            
            
            110,113
            
            
            110,113Building
                and improvements
            
            
            1,290,072
            
            
            1,290,072Machinery
              equipment, furniture and
              fixtures
            
            
            3,103,704
            
            
            3,040,232Total
                property, plant and equipment
            
            
            4,503,889
            
            
            4,440,417Less:
                accumulated depreciation
            
            
            (1,992,401
            )
            
            (1,879,363
            )$
            2,511,488
            
            $
            2,561,054





Depreciation
      expense for the three months ended June 30, 2007 and June 30, 2006 were $113,038
      and $103,785, respectively. Land and buildings (which are owned by WM Realty
      Management, LLC- a consolidated entity under Fin 46 R) are collateral for the
      $3,300,000 Mortgage Loan, and other fixed assets of the Company together with
      its other personal property, are collateral for the Sovereign Bank $4,000,000
      secured loan and credit facilities.





**NOTE
      4. COSTS INCURRED ON UNCOMPLETED CONTRACTS**




The
      Company recognizes revenues based upon the units-of-delivery method  The
      advance billing and deposits includes down payments for acquisition of materials
      and progress payments on contracts. The agreements with the buyers of the
      Company’s products allow the Company to offset the progress payments against the
      costs incurred.  As of June 30, 2007 and March 31, 2007:





June
                30, 2007
            
            March
                31, 2007Cost
                incurred on uncompleted contracts, beginning balance
            
            $
            5,455,142
            
            $
            2,889,649Total
                cost incurred on contracts, during the year
            
            
            5,931,516
            
            
            18,108,550Less
                cost of sales, during the year
            
            
            (4,877,383
            )
            
            (15,543,057
            )Cost
                incurred on uncompleted contracts, ending balance
            
            $
            6,509,275
            
            $
            5,455,142Billings
                on uncompleted contracts, beginning balance
            
            $
            4,188,697
            
            $
            1,583,061Plus:
                Total billings incurred on contracts, during the year
            
            
            4,308,663
            
            
            9,236,613Less:
              Contracts recognized as revenue, during the
              year
            
            
            (4,224,224
            )
            
            (6,630,977
            )Billings
                on uncompleted contracts, ending balance
            
            $
            4,273,136
            
            $
            4,188,697Cost
                incurred on uncompleted contracts, ending balance
            
            $
            6,509,275
            
            $
            5,455,142Billings
                on uncompleted contracts, ending balance
            
            
            (4,273,136
            )
            
            (4,188,697
            )Cost
                incurred on uncompleted contracts, ending balance, net
            
            $
            2,236,139
            
            $
            1,266,445




7




**TECHPRECISION
          CORPORATION**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**


For
      the
      three months ended June 30, 2007 and 2006, $100,000 and $29,051 of allowance
      for
      losses on uncompleted contracts were recognized, respectively.





**NOTE
      5. PREPAID EXPENSES**




As
                of June 30, 2007 and March 31, 2007, the prepaid expenses included
                the
                following:




June
                30,2007
            
            March
                31, 2007Insurance
            
            $
            80,883
            
            $
            137,484Real
                estate taxes
            
            
            4,176
            
            
            4,387Prepayments
                on purchases
            
            
            45,567
            
            
            121,720Equipment
                maintenance
            
            
            26,409
            
            
            6,730Total
            
            $
            157,035
            
            $
            270,321




**NOTE
      6. DEFERRED CHARGES**




Deferred
      charges represent the capitalization of costs incurred in connection with
      obtaining the bank loan and building mortgage. These costs are being amortized
      over the term of the related debt obligation. Amortization charged to operations
      in the three months ended June 30, 2007 and June 30, 2006 were $4,257 and
      $152,314, respectively. As of June 30, 2007 and March 31, 2007, deferred charges
      were as follows:




June
                30,2007
            
            March
                31, 2007Deferred
                costs expiring after one year:Deferred
                loan costs
            
            $
            150,259
            
            $
            150,259Accumulated
                amortization
            
            
            (15,797
            )
            
            (11,541
            )$
            134,462
            
            $
            138,718




**NOTE
      7. LONG-TERM DEBT**




The
      following debt obligations, outstanding on June 30, 2007 and March 31, 2007:




June
                30,
            
            March
                31,1.
                Long-term debt issued on February 24, 2006:Sovereign
                Bank-Secured Term note payable- 72 month 9% variable term
                notewith
                quarterly principal payments of $142,857 plus interest. Final payment
                dueon
                March 1, 2013
            
            $
            3,285,715
            
            $
            3,428,5712.
                Long-term mortgage loan issued on October 4, 2006Amalgamated
                Bank mortgage loan to WM Realty- 10 years, annual interest
                rateof
                6.75%, monthly interest and principal payment $20,955. The amortization
                isbased
                on a thirty-year amortization schedule. WM Realty
                Managementhas
                the right to prepay the mortgage note upon payment of a
                prepaymentpremium
                of 5% of the amount prepaid if the prepayment is made during
                thefirst
                two years, and declining to 1% of the amount prepaid if the prepayment
                ismade
                during the ninth or tenth year.
            
            $
            3,180,738
            
            $
            3,189,0873.
                Automobile LoanFord
                Motor Credit Company-Note payable secured by a vehicle - payable
                inmonthly
                installments of $552 including interest of 4.9%, commencing July
                20,2003
                through June 20, 2009
            
            
            12,099
            
            
            13,596Total
            
            
            6,478,552
            
            
            6,631,254Principal
                payments due within one year
            
            
            610,623
            
            
            610,814Principal
                payments due after one year
            
            $
            5,867,929
            
            $
            6,020,440




8


**TECHPRECISION
        CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**


On
      February 24, 2006, Ranor entered into a loan and security agreement with
      Sovereign Bank, West Hartford, Ct. Pursuant to the agreement, the bank has
      made
      a term loan of $4,000,000 to the Company and extended the Company a line of
      credit of $1,000,000, initial interest at 9%. The interest on the line of credit
      is variable. In February 2007, the Company entered into an 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 for the Company to borrow up
      to
      $500,000 at prime plus 1% in order to financing capital expenditures. Under
      this
      capital expenditures facility, the Company may borrow up to $500,000 until
      the
      February 1, 2008, with interest only payable through February 1, 2008 and the
      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. As of June 30, 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 redeem, retire, purchase or
      otherwise acquire 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 not to be
      less
      than 120% of fixed charges for the rolling four quarters, tested at the end
      of
      each fiscal quarter; and interest coverage ratio is required to be not less
      than
      2:1 as at the end of each fiscal quarter.





In
      connection with the Amalgamated Bank mortgage financing, Mr. Andrew Levy, the
      principal equity owner of WM Realty Management and a principal stockholder
      of
      the Company, 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.




As
      of
      June 30, 2007, the maturities of long-term debt were as follows:


**Year
                  ending March 31,**2008
              
              $
              457,0322009
              
              
              612,7522010
              
              
              612,4352011
              
              
              612,6412012
              
              
              615,628Due
                  after 2011
              
              
              3,568,064Total
              
              $
              6,478,552





9


**TECHPRECISION
        CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **NOTE
        8. INCOME TAXES**





The
      provision for income taxes differs from the amount computed by applying the
      statutory federal income tax rate to the net income or loss from operations.
      As
      of June 30, 2007 and March 31, 2007, the sources and tax effects of the
      differences are as follows:


June
                  30, 2007
              
              March
                  31, 2007Income
                  tax provision at statutory rate
              
              $
              (421,857
              )
              $
              (400,600
              )Tax
                  benefit before net operating loss carry forward
              
              
              24,852
              
              
              160,500Net
                  tax provision
              
              $
              (397,005
              )
              
              (240,100
              )




As
      of
      March 31, 2007 and 2006, 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:


June
                  30, 2007
              
              March
                  31, 2007Deferred
                  Tax Assets:Current:Compensation
                  accrual
              
              $
              116,278
              
              $
              112,000Bad
                  debt allowance
              
              
              9,800
              
              
              9,800Loss
                  on uncompleted contracts
              
              
              39,000
              
              
              45,600Non-Current:Net
                  operating loss carry-forward
              
              
              560,048
              
              
              584,900Total
                  deferred tax assets
              
              
              725,126
              
              
              752,300Deferred
                  Tax Liabilities:Non-Current:Depreciation
              
              
              208,200
              
              
              206,000Net
                  deferred tax asset
              
              
              516,926
              
              
              546,300Valuation
                  allowance
              
              
              (516,926
              )
              
              (546,300
              )Net
                  Deferred Tax Asset Balance
              
              $
              --
              
              $
              --
  At
        June
        30, 2007 and March 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 over 50%
        change in ownership of Ranor, Inc, that company’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 federal long-term federal tax exempt rate for the
        month during which the ownership occurred, February 2006, and the preceding
        two
        months. The Federal long term tax exempt rate is determined by the Internal
        Revenue Service.





As
      of
      June 30, 2007, the Company’s federal net operating loss carryforwards was
      approximately $1,435,878. If not utilized, the federal net operating loss
      carryforward of Ranor and Techprecision will expire in 2025 and 2027,
      respectively





**NOTE
      9. RELATED PARTY TRANSACTIONS**




*Management
      Fees*




Contemporaneously
      with the reverse acquisition on February 24, 2006, the Company engaged
      Techprecision LLC to manage its business through March 31, 2009 pursuant to
      a
      management agreement. The agreement provided that the Company pay Techprecision
      LLC an annual management fee of $200,000 and a performance bonus based on
      criteria determined by the compensation committee. Mr. James G. Reindl was
      president and Mr. Andrew A. Levy was chairman of Techprecision LLC, and they
      and
      Martin M. Daube were the members of Techprecision LLC. The agreement provided
      that Techprecision LLC would provide the services of Mr. Reindl at chairman,
      Mr.
      Levy for marketing support and analysis of long-term contracts and Mr. Daube
      for
      marketing support. Mr. Reindl works for us on a full time basis. Neither Mr.
      Levy nor Mr. Daube devoted any significant time to the Company’s business. None
      of the members of Techprecision LLC received any additional compensation from
      us
      during the period that the contract was in effect, and the annual fee and any
      performance bonus which may be awarded is allocated among the three members
      in
      accordance with their interests in Techprecision LLC, which is 45% for each
      of
      Mr. Reindl and Mr. Levy and 10% with respect to Mr. Daube. No performance bonus
      was awarded.




10


**TECHPRECISION
        CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**


On
      January 29, 2007, the management agreement with Techprecision LLC was terminated
      as of December 31, 2006. In connection with the termination, we made a payment
      of $16,667 on or about January 15, 2007 and we agreed to make eight monthly
      payments of $9,167 to Techprecision LLC, commencing February 15, 2007 and ending
      on September 15, 2007. Mr. Reindl is no longer a member of Techprecision LLC,
      and he has no interest in the continuing payments to Techprecision LLC. As
      a
      result of the termination of the management agreement, Mr. Reindl no longer
      receives compensation through Techprecision LLC, and we are paying Mr. Reindl
      salary of $160,000 per annum. We also reimburse Mr. Reindl for his travel
      expenses to our offices in Westminster, Massachusetts. Mr. Reindl has a one-year
      employment agreement with the Company commencing April 1, 2007.




*Loans
      from Related Parties*




The
      principal equity owner of WM Realty made loans to WM Realty in the year ended
      March 31, 2007. The outstanding balance of the loans was $30,000 as of June
      30,
      2007 and $60,000 as of March 31, 2007 and is reflected on the Company’s balance
      sheet as a loan from stockholder.




*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. The property was appraised on October 31,
      2005
      at $4,750,000. The Company advanced $226,808 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, Mr. 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.





**NOTE
      11. OPERATING LEASE**




Ranor
      leases office equipment under operating lease agreements expiring through
      November 2008. Total rent expense charged to operations was $4,281 for the
      three
      months ended June 30, 2007 and $16,700 in the years ended March 31, 2007. Future
      minimum lease payments under noncancellable portions of the leases as of March
      31, 2007, are as follows:





Years
                ending March 31,
            
            **Amount**2008
            
            $
            11,466Total
                minimum lease payments
            
            $
            11,466




11




**TECHPRECISION
      CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**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 increase in 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
              
              
              333,0002011
              
              
              444,0002010
              
              
              444,0002011
              
              
              444,0002012-2016
              
              
              2,220,0002017-2022
              
              
              2,220,000Total
              
              $
              6,105,000


12


**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 in this prospectus. 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, including 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, our ability to raise any financing which we may require
      for our operations, competition, government regulations and requirements,
      pricing and development difficulties, our ability to make acquisitions and
      successfully integrate those acquisitions with our business, as well as general
      industry and market conditions and growth rates, and general economic
      conditions. Any forward-looking statements speak only as of the date on which
      they are made, and we do not undertake any obligation to update any
      forward-looking statement to reflect events or circumstances after the date
      of
      this report. Investors should evaluate any statements made by the Company in
      light of these important factors.




**Overview**




We
      operate in one business - fabrication, precision machining and engineering
      of
      metal products up to 100 tons. Most of the products are fabricated from raw
      metal plate or forgings. Materials used in the manufacturing of our products
      are
      either supplied by our customers or acquired from raw material suppliers we
      have
      worked with for many years. Our clients are generally from the nuclear,
      aerospace, commercial and defense industries, including national laboratories.
      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.




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




Ranor,
      together with its predecessor, has been in business since 1956, and was sold
      by
      its founders in 1999 to Critical Components Corporation, a subsidiary of
      Standard Automotive Corporation. From June 1999 until August 2002, Ranor’s
      predecessor, who was also named Ranor, was operated by Critical Components
      Corporation. In December 2001, Standard Automotive Corporation, the parent
      of
      Critical Components, filed for protection under the Bankruptcy Code and operated
      under Chapter 11 until on or about the quarter ended June 30, 2002. In 2002,
      a
      corporation known as Rbran Acquisition, Inc., which subsequently changed its
      name to Ranor, Inc., acquired the assets of Ranor’s predecessor from the
      bankruptcy estate. In connection with the purchase of the assets, Ranor filed
      for protection under the Bankruptcy Code. As a result of the bankruptcy, some
      customers of Ranor were hesitant to continue to use Ranor’s services. In recent
      years, as both the market for our services has improved and we demonstrated
      to
      our customers that we have both the financial and manufacturing ability to
      meet
      their specifications and time requirements, we have seen a general improvement
      in our business, although not necessarily on a quarter-to-quarter
      basis.




13




In
      recent
      years, the capital goods market experienced a slow down due to both the 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 project inquiries,
      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.




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 three months ended June 30, 2007, two
      customers accounted for approximately 58% 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 rejecting or not bidding on projects
      we
      do not believe would generate an adequate gross margin. Thus, in the three
      months ended June 30, 2007, our sales and net income were $6,553,112 and
      $684,827, respectively, as compared to revenues of $4,198,430 and a loss of
      $463,661, respectively, in the first quarter of the previous fiscal year. Our
      gross margin for the three months ended June 30, 2007 was 26% as compared to
      19%
      in three months ended June 30, 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. 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.





As
      of
      June 30, 2007, we had a backlog of firm orders totaling approximately $30.4
      million.  We anticipate that approximately $21 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
      $1.0 million from three 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.




14




**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.




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.




**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 and or settled. The effect
      of the change in the tax rates is recognized as income or expense in the period
      of the change. A valuation allowance is established, when necessary, to reduce
      deferred income taxes to the amount that is more likely than not to be realized.
      As of June 30, 2007, we had net operating loss carry-forwards approximating
      $1,435,878. Pursuant to Section 382 of the Internal Revenue Code, utilization
      of
      these losses may be limited in the event of a change in control, as defined
      in
      the Treasury Regulations. The change in ownership resulting from our acquisition
      of Ranor limits our ability to use the loss carry-forwards.





**Non-GAAP
      Information**




We
      refer
      to EBITDA, which is a non-GAAP performance measure, because our agreement with
      Barron Partners uses EBITDA as a measure for determining whether there is an
      adjustment in the conversion price of the series A preferred stock or the
      exercise price of the warrants. EBITDA is determined by adding to net income
      the
      amount deducted for interest, taxes, depreciation and amortization. The
      following table shows the relationship between net income and EBITDA for the
      three months ended June 30, 2007 and 2006 (dollars in thousands).





Three
                Months Ended June 30,2007
            
            2006Net
                income (loss)
            
            $
            685
            
            $
            (75
            )Plus
                interest
            
            
            132
            
            
            183Plus
                taxes
            
            
            397
            
            
            —Plus
                depreciation and amortization
            
            
            117
            
            
            256EBITDA
            
            
            1,331
            
            
            364




15




**New
      Accounting Pronouncements**




In
      July
      2006, FASB issued Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes,” which is effective for fiscal years beginning after
      December 15, 2006. The Interpretation prescribes a recognition threshold
      and measurement attribute for the financial statement recognition and
      measurement of a tax position taken or expected to be taken in a tax return.
      The
      Interpretation also provides guidance on derecognition, classification, interest
      and penalties, accounting for interim periods, disclosure, and transition.
      We
      will adopt the Interpretation on January 1, 2007. We are in the process of
      determining the impact of the Interpretation on our financial position and
      results of operations.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS
      No. 157”). SFAS No. 157 provides a framework for measuring fair value in
      accordance with GAAP, and expands disclosures regarding fair value measurements
      and the effect on earnings. SFAS No. 157 is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and interim periods
      within those fiscal years. We are in the process of evaluating the impact SFAS
      No. 157 will have on our financial position and results of
      operations.





In
      September 2006, the U.S. Securities and Exchange Commission (“SEC”) released
      Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year
      Misstatements when Quantifying Misstatements in Current Year Financial
      Statements,” (“SAB No. 108”), which provides interpretive guidance on the SEC’s
      views regarding the process of quantifying the materiality of financial
      statement misstatements. SAB No. 108 is effective for years ending after
      November 15, 2006. The application of SAB No. 108 is not expected
      to have a material effect on our financial position and results of
      operations.





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. We are currently evaluating the effect, if any, the adoption of
      SFAS 159 will have on our financial condition, results of operations and cash
      flow.




**Results
      of operations**




The
      following table sets forth information from our statements of operations for
      the
      three months ended June 30, 2007 and 2006, in dollars and as a percentage of
      revenue (dollars in thousands):




Three
                Months Ended June
                30,2007
            
            2006Net
                sales
            
            $
            6,553
            
            
            100
            %
            $
            4,199
            
            
            100.
            %Cost
                of sales
            
            
            4,878
            
            
            74
            %
            
            3,410
            
            
            81
            %Gross
                profit
            
            
            1,676
            
            
            26
            %
            
            789
            
            
            19
            %Selling,
                general and administrative
            
            
            459
            
            
            7
            %
            
            530
            
            
            13
            %Income
                (loss) from operations
            
            
            1,217
            
            
            19
            %
            
            258
            
            
            6
            %Interest
                expense
            
            
            (132
            )
            
            (2
            )%
            
            (183
            )
            
            (4
            )%Other
                expenses
            
            
            (135
            )
            
            (2
            )%
            
            (334
            )
            
            (8
            )%Income
                (loss) before income taxes
            
            
            1,082
            
            
            16
            %
            
            (75
            )
            
            (2
            )%Provision
                for income taxes
            
            
            (397
            )
            
            (6
            )%
            
            —
            
            
            0
            %Net
                gain (loss)
            
            
            685
            
            
            10
            %
            
            (75
            )
            
            (2
            )%Preferred
                stock deemed dividend
            
            
            --
            
            
            --
            
            
            (388
            )
            
            (9
            )%Net
                income (loss) to common stockholders
            
            
            685
            
            
            10
            %
            
            (464
            )
            
            (11
            )%




16




**Three
      Months Ended June 30, 2007 and 200** **6**




Sales
      increased by $2,355,000 or 56%, from $4,199,000 for the quarter ended June
      30,
      2006 to $6,553,000 for the quarter ended June 30, 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 ended June 30, 2007 increased by $1,468,000 to
      $4,878,000 an increase of 43%, from $3,410,000 for quarter ended June 30, 2006.
      This increase was less than the increase in sales, resulting in an improvement
      in the gross margin from 19% to 26%. We have changed the manner in which we
      treat potential business. We are seeking more long-term projects with a more
      predictable cost structure, and rejecting or not bidding on projects we do
      not
      believe would generate an adequate gross margin. We believe that our ability
      to
      implement this program has enabled us to improve our gross margins.





Total
      selling, administrative and other expenses for quarter ended June 30, 2007
      were
      $459,000 as compared to $530,000 for quarter ended June 30, 2006, a decrease
      of
      $71,000 or 13%. The principal reason for the decrease in total operating
      expenses was the reduction in professional fees and selling, general and
      administrative expenses.





Our
      payroll and related costs were $344,000 in the quarter ended June 30, 2007
      as
      compared to $292,000 for the quarter ended June 30, 2006. The $52,000 (18%)
      increase in payroll was attributable to additional officer salaries, which
      was
      partially offset by the termination of the management agreement with
      Techprecision LLC, under which payments of $27,500 were made during the quarter
      ended June 30, 2007, pursuant to the termination agreement..





Professional
      fees decreased from $100,000 to $44,000 for the quarters ended June 30, 2006
      and
      June 30, 2007, respectively. This decrease was attributable to decreased fees
      related to regulatory filings.





Selling,
      general and administrative expenses decreased by $67,000 (49%) from $138,000
      in
      the quarter ended June 30, 2006 to $71,000 in the quarter ended June 30, 2007.
      The principal reason was the decrease in consulting fees of $61,000. The
      decrease in consulting fees is related to increased duties of officers in the
      company. On January 29, 2007, our management agreement with Techprecision LLC
      was terminated as of December 31, 2006. As a result of the termination of the
      management agreement, Mr. Reindl no longer receives consulting compensation,
      and
      we are paying Mr. Reindl, our chief executive officer, directly for his services
      as chief executive officer at the annual rate of $160,000.




17




Interest
      expense for the quarter ended June 30, 2007 was $132,000 compared to $183,000
      for the quarter ended June 30, 2006. The decrease of $51,000 (28%) is a result
      of refinancing the short term loan of WM Realty from with a longer term loan.
      The refinancing of the loan also eliminated $150 amortization expenses of
      deferred short term loan costs.





In
      the
      quarter ended June 30, 2006, we were required to adjust the conversion price
      into which our series A preferred stock was convertible into common stock.
      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.





As
      a
      result of the foregoing, our net income allocable to common stockholders was
      $685,000 ($0.07 per share basic and $0.04 per share diluted) in the three months
      ended June 30, 2007 as compared to the loss of $464,000 ($.01 per share, basic
      and diluted) in the three months ended June 30, 2006.




**Liquidity
      and Capital Resources**




At
      June
      30, 2007, we had working capital of $3,974,000 as compared with working capital
      of $3,398,000 at March 31, 2007, an increase of $576,000, 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
            
            June
                30, 2007
            
            March
                31, 2007
            
            Change
                ($)
            
            Change
                (%)Cash
                and cash equivalents
            
            $
            1,231
            
            $
            1,444
            
            $
            (213
            )
            
            (17,3
            %)Accounts
                receivable, net
            
            
            3,374
            
            
            2,685
            
            
            688
            
            
            20.4
            %Costs
                incurred on uncompleted contracts
            
            
            2,236
            
            
            1,226
            
            
            970
            
            
            43.4
            %Prepaid
                expenses
            
            
            157
            
            
            270
            
            
            (113
            )
            
            (72.1
            %)Accounts
                payable
            
            
            2,012
            
            
            1,299
            
            
            714
            
            
            35.5
            %





During
      the three months ended June 30, 2007, we made principal payments on our loans
      of
      $193,000, and we invested $63,000 in fixed assets.





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.




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 $500,000 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 per year.




18




The
      term
      note is due on March 1, 2013, and is payable in 28 quarterly installments of
      $143. 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.




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 June 30, 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 $500,000 until the February
      1, 2008, with interest only payable through February 1, 2008 and the principal
      to be amortized over a five-year term commencing March 1, 2008. As of March
      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 June 30, 2007 and August 10, 2007 and terminates in June 2009, our $500,000
      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





**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.





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
      6.**  **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





19





**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.




Dated:
                August 14, 2007**TECHPRECISION
                CORPORATION**
              (Registrant)/s/
              James G. ReindlJames
                G. Reindl, Chief Executive Officer




/s/
              Mary
              DesmondMary
                  Desmond, Chief Financial Officer  20