TECHPRECISION CORP

Previous wording

We primarily serve customers in the defense and aerospace; secondarily in the precision industrial sectors. Within these sectors, we have manufactured custom components for US Navy submarines and aircraft carriers, USMC military helicopters, US defense and civilian aerospace programs.

Current wording

We primarily serve customers in the defense and aerospace; secondarily in the precision industrial sectors. Within these sectors, we have manufactured custom components for U.S. Navy submarines and aircraft carriers, USMC military helicopters, U.S. defense and civilian aerospace programs.

Previous wording

The preparation of the condensed consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We continually evaluate our estimates, including those related to revenue recognition and income taxes. These estimates and assumptions require management’s most difficult, subjective or complex judgments. Actual results may vary under different assumptions or conditions.

Current wording

The preparation of the condensed consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We continually evaluate our estimates, including those related to revenue recognition, income taxes and long-lived assets. These estimates and assumptions require management’s most difficult, subjective or complex judgments. Actual results may vary under different assumptions or conditions.

Previous wording

Consolidated– Revenue was $7,094 for the three months ended December 31, 2025, a decrease of $528 or 7% lower when compared with revenue for the three months ended December 31, 2024. Our rate of progress fulfilling obligations decreased at Stadco in the third quarter and resulted in a 10% year-over-year decline.

Current wording

*Consolidated –*Revenue was $9,096 for the three months ended June 30, 2026, an increase of $1,717 or 23% higher when compared with revenue for the three months ended June 30, 2025. Our rate of progress fulfilling obligations improved at both Ranor and Stadco in the fiscal 2027 first quarter.

Previous wording

Ranor – Revenue was $4,362 for the three months ended December 31, 2025, an increase of $52 or 1% higher when compared with the same period a year ago on a favorable customer project mix as project work has shifted among our defense customers.

Current wording

Ranor–* *Revenue was $5,461 for the three months ended June 30, 2026, an increase of $1,164 or 27% higher when compared with the same period a year ago. The project mix remained favorable as project work has shifted among our prime defense customers. The backlog at Ranor on June 30, 2026 was $31,548 as new orders continue to flow from our existing customer base of prime defense contractors.

Previous wording

Stadco – Revenue was $2,984 for the three months ended December 31, 2025, a decrease of $328 or 10% lower when compared with the three months ended December 31, 2024. Under a changing project mix, our rate of progress fulfilling obligations decreased in the third quarter and dampened revenue recognition. A revenue decrease under our military space program was offset in part by an increase under our military aircraft program when compared with the same period a year ago.

Current wording

*Stadco –*Revenue was $4,064 for the three months ended June 30, 2026, an increase of $732 or 22% higher when compared with the three months ended June 30, 2025. Under a changing project mix, our rate of progress fulfilling obligations improved in the first quarter of fiscal 2027. An increase in revenue from certain prime defense contractors more than offset a decrease in revenue with our military space customers when compared to the same period a year ago. Stadco’s backlog as of June 30, 2026 was $21,133 as new orders for components continue to flow from customers in a variety of programs, including military aircraft, military helicopter, and military space programs.

Previous wording

*Consolidated –*Cost of revenue consists primarily of raw materials, parts, labor, overhead and subcontracting costs. Our cost of revenue for the three months ended December 31, 2025, was $6,713 or 1% higher when compared to the three months ended December 31, 2024. The cost of revenue at Ranor and Stadco increased by 10% and 2%, respectively. As a result, gross profit decreased by $610, or 62% when compared to the same period a year ago. Gross margin for the three months ended December 31, 2025 was 6% compared to 13% in the same period a year ago.

Current wording

*Consolidated –*Cost of revenue consists primarily of raw materials, parts, labor, overhead and subcontracting costs. Our cost of revenue for the three months ended June 30, 2026, was $7,696 or 21% higher when compared to the three months ended June 30, 2025. The cost of revenue at Ranor increased by 54% primarily on higher material costs. Gross profit increased by $370 or 36% when compared to the same period a year ago. Gross margin for the three months ended June 30, 2026 was 15.4% compared to 14.0% in the same period a year ago.

Previous wording

*Consolidated –*Total selling, general and administrative expenses for the three months ended December 31, 2025, increased by $46, or 3%, as an increase in stock-based compensation more than offset a decrease in outside advisory and office costs.

Current wording

*Consolidated –*Total selling, general and administrative expenses for the three months ended June 30, 2026, decreased by $48, or 3%, as an increase in stock-based compensation was more than offset a decrease in salaries and related expenses, outside advisory and office costs.

Previous wording

Stadco – SG&A expense decreased by $228 on lower allocated compensation, outside advisory and office costs.

Current wording

Stadco –* *SG&A expense decreased by $59 or 8% on lower allocated salaries and outside advisory costs.

Previous wording

Consolidated – As a result of the foregoing, for the three months ended December 31, 2025, we reported an operating loss of $1,352, compared with an operating loss of $696 for the three months ended December 31, 2024. The change was primarily due to higher operating losses at Stadco and an increase in stock-based compensation.

Current wording

Consolidated–* *As a result of the foregoing, for the three months ended June 30, 2026, we reported an operating loss of $45, compared with an operating loss of $463 for the three months ended June 30, 2025. The change was primarily due to a decrease in operating losses at Stadco.

Previous wording

*Ranor –*Operating income increased on lower manufacturing costs and a favorable project mix.

Current wording

*Ranor –*Operating income increased by 9% on a favorable project mix and gross margin drop through.

Previous wording

Interest expense decreased by $14 when compared with the same period a year ago, as lower interest expense was incurred in connection with the Ranor term loan and Stadco term loan (each as defined below) and borrowings under our revolving line of credit with the Bank, or the “Revolver Loan”.

Current wording

Interest expense decreased by $20 when compared with the same period a year ago, as lower interest expense was incurred in connection with the Ranor term loan and Stadco term loan and borrowings under our revolving line of credit, or the “Revolver Loan”.

Previous wording

Amortization of debt issue costs for the three months ended December 31, 2025 decreased by $12 when compared to three months ended December 31, 2024, due primarily to lower amortized issue costs in connection with revolver loan renewal.

Current wording

Amortization of debt issue costs for the three months ended June 30, 2026 decreased by $9 when compared to three months ended June 30, 2025, due primarily to lower amortized debt issue costs in connection with revolver loan renewal.

Previous wording

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The valuation allowance on deferred tax assets at December 31, 2025 was approximately $6,000. We believe that it is more likely than not that the benefit from certain state NOL carryforwards and other deferred tax assets will not be realized. The assessment was based on the weight of negative evidence at the balance sheet date, our recent operating losses and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels. In recognition of this risk, we continue to provide a valuation allowance on these items.

Current wording

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The valuation allowance on deferred tax assets at June 30, 2026 was approximately $6,100. We believe that it is more likely than not that the benefit from certain state NOL carryforwards and other deferred tax assets will not be realized. The assessment was based on the weight of negative evidence at the balance sheet date, our recent operating losses and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels. In recognition of this risk, we continue to provide a valuation allowance on these items.

Previous wording

As a result of the foregoing, for the three months ended December 31, 2025, we recorded a net loss of $1,473, or $0.15 per share basic and fully diluted, compared with a net loss of $799, or $0.08 per share basic and fully diluted for the three months ended December 31, 2024.

Current wording

As a result of the foregoing, for the three months ended June 30, 2026, we recorded a net loss of $153, or $0.02 per share basic and fully diluted, compared with a net loss of $597, or $0.06 per share basic and fully diluted for the three months ended June 30, 2025.

Previous wording

Our liquidity is highly dependent on the availability of financing facilities and our ability to maintain gross profit and operating income. As of December 31, 2025, we had $747 in total available liquidity, consisting of $697 in undrawn capacity under our Revolver Loan and $50 in cash and cash equivalents. As of March 31, 2025, we had $1,451 in total available liquidity, consisting of $195 in cash and cash equivalents and $1,256 in undrawn capacity under our Revolver Loan. Our working capital was negative because of the reclassification of our long-term debt from noncurrent to current in the condensed consolidated balance sheet.

Current wording

Our liquidity is highly dependent on the availability of financing facilities and our ability to maintain gross profit and operating income. As of June 30, 2026, we had $2,067 in total available liquidity, consisting of $1,788 in undrawn capacity under our Revolver Loan and $279 in cash. As of March 31, 2026, we had $1,485 in total available liquidity, consisting of $431 in cash and $1,054 in undrawn capacity under our Revolver Loan. Our working capital was negative because of the reclassification of our long-term debt from noncurrent to current in the condensed consolidated balance sheet.

Previous wording

There was $2,926 and $3,150 outstanding under the Revolver Loan on December 31, 2025 and March 31, 2025, respectively. The Company pays interest at an adjusted SOFR - based rate. Interest - only payments on advances made under the Revolver Loan will continue to be payable monthly in arrears. Interest paid and accrued on advances made under the Revolver Loan during the nine months ended December 31, 2025 and 2024, totaled $153 and $146, respectively. The weighted average interest rate on December 31, 2025 and March 31, 2025 was 6.82% and 7.47%, respectively. The weighted average amount outstanding during the nine months ended December 31, 2025 was $2,966. Our working capital was negative on March 31, 2025 and December 31, 2025 because of the reclassification of our long-term debt from noncurrent to current in the condensed consolidated balance sheet. The table below presents selected liquidity and capital measures at the fiscal years ended:

Current wording

There was $1,599 and $3,446 outstanding under the Revolver Loan on June 30, 2026 and March 31, 2026, respectively. The Company pays interest at an adjusted SOFR - based rate. Interest - only payments on advances made under the Revolver Loan will continue to be payable monthly in arrears. Interest paid and accrued on advances made under the Revolver Loan during the three months ended June 30, 2026 and 2025, totaled $40 and $53, respectively. The weighted average interest rate on June 30, 2026 and March 31, 2026 was 6.26% and 6.70%, respectively. The weighted average amount outstanding during the three months ended June 30, 2026 was $2,498. The table below presents selected liquidity and capital measures on:

Previous wording

The next table summarizes changes in cash by primary component in the cash flows statements for the nine months ended:

Current wording

The next table summarizes changes in cash by primary component in the cash flows statements for the three months ended:

Previous wording

For the nine months ended December 31, 2025 and 2024, we invested $3,255 and $2,796, respectively, in new factory machinery and equipment. We were reimbursed for certain purchases under a supplier development fund during the nine months ended December 31, 2025 and 2024 for $4,133 and $2,566, respectively.

Current wording

For the three months ended June 30, 2026 and 2025, we invested $2,436 and $1,250, respectively, for purchases of new fixed assets. We were reimbursed for certain purchases under a supplier development fund during the three months ended June 30, 2026 and 2025 for $2,420 and $2,226, respectively.

Previous wording

We drew down $13,731 under our Revolver Loan during the nine months ended December 31, 2025, and repaid $13,955 during the same period. We also used $546 of cash to pay down debt principal, periodic lease payments, and debt issue costs to renew the Revolver Loan.

Current wording

We drew down $6,553 under our Revolver Loan during the three months ended June 30, 2026, and repaid $8,400 during the same period. We also used $187 of cash to pay down debt principal, make periodic lease payments, and pay debt issue costs to renew the Revolver Loan.

Previous wording

For the nine months ended December 31, 2024, we drew down $10,526 under the Revolver Loan and repaid $10,381 during the same period. We used $546 of cash to pay down debt principal, make periodic lease payments, and pay debt issue costs to renew the Revolver Loan. We also financed the purchase of certain equipment for $65.

Current wording

For the three months ended June 30, 2025, we drew down $2,755 under the Revolver Loan and repaid $4,241 during the same period. We used $188 of cash to pay down debt principal, make periodic lease payments, and pay debt issue costs to renew the Revolver Loan.

Previous wording

All of the above activity resulted in a net decrease in cash of $145 for the nine months ended December 31, 2025 compared with a net increase in cash of $27 for the nine months ended December 31, 2024.

Current wording

All of the above activity resulted in a net decrease in cash of $152 for the three months ended June 30, 2026 compared with a net decrease in cash of $52 for the three months ended June 30, 2025.

Previous wording

Since December 20, 2021, Ranor and certain affiliates of the Company entered into thirteen separate amendments to the Amended and Restated Loan Agreement and First Amendment to Promissory Note to, among other things, extend the maturity date of the Ranor Term Loan and Revolver Loan to December 15, 2027 and May 15, 2026, respectively.

Current wording

Through May 13, 2026, Ranor and certain affiliates of the Company entered into fourteen separate amendments to the original Amended and Restated Loan Agreement dated August 25, 2021 to, among other things, extend the maturity date of the Ranor Term Loan and Revolver Loan to December 15, 2027 and September 15, 2026, respectively.

Previous wording

There was $6,677 and $7,387 outstanding under the Loan Agreement on December 31, 2025 and March 31, 2025, respectively. Without a waiver, the lender has the right, but not the obligation, to demand repayment from the Company for noncompliance with the debt covenants. In addition, the Bank retains the right to act on covenant violations that occur after the date of delivery of any waiver. The lender has not granted us a waiver. As such, we need to seek alternative financing to pay these obligations as the Company does not have existing facilities or sufficient cash on hand to satisfy these obligations. It is also probable that the Company will not be in compliance with the same debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our consolidated balance sheet.

Current wording

There was $5,017 and $7,037 outstanding under the Loan Agreement on June 30, 2026 and March 31, 2026, respectively. Without a waiver, the lender has the right, but not the obligation, to demand repayment from the Company for noncompliance with the debt covenants. In addition, the Bank retains the right to act on covenant violations that occur after the date of delivery of any waiver. The lender has not granted us a waiver. As such, we need to seek alternative financing to pay these obligations as the Company does not have existing facilities or sufficient cash on hand to satisfy these obligations. It is also probable that the Company will not be in compliance with the same debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our condensed consolidated balance sheet.

Previous wording

We define EBITDA as net loss plus interest, income taxes, depreciation, and amortization. For the three and nine months ended December 31, 2025 and 2024, net loss was $1,473 and $1,245, and $799 and $2,860, respectively. The following table provides a reconciliation of EBITDA to net loss, the most directly comparable U.S. GAAP measure reported in our condensed consolidated financial statements for the following periods:

Current wording

We define EBITDA as net loss plus interest, income taxes, depreciation, and amortization. For the three months ended June 30, 2026 and 2025, net loss was $153 and $597, respectively. The following table provides a reconciliation of EBITDA to net loss, the most directly comparable U.S. GAAP measure reported in our condensed consolidated financial statements for the following periods: