TECHPRECISION CORP - Quarter Report: 2009 June (Form 10-Q)

f10q0609_tprecision.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2009

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

For the transition period from to

Commission File Number 0-51378

TECHPRECISION CORPORATION

(Exact name of registrant as specified in its charter)

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

Bella Drive, Westminster, Massachusetts 01473		01473
(Address of principal executive offices)		(Zip Code)

(978) 874-0591

(Registrant’s telephone number, including area code)

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

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

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

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

The number of shares of the Registrant’s common stock, par value $.0001 per share, issued and outstanding at June 30, 2009 was 13,907,513.

TECHPRECISION CORPORATION

CONSOLIDATED BALANCE SHEETS

	June 30, 2009		March 31, 2009
	(unaudited)		(audited)
ASSETS
Current assets
Cash and cash equivalents	$	9,403,943	$	10,462,737
Accounts receivable, less allowance for doubtful accounts of $25,000		1,655,553		1,418,830
Costs incurred on uncompleted contracts, in excess of progress billings		3,529,599		3,660,802
Inventories - raw materials		305,161		351,356
Deferred tax asset		246,133		--
Prepaid expenses		1,555,844		1,583,234
Other receivables		30,000		59,979
Total current assets		16,726,233		17,536,938
Property, plant and equipment, net		3,533,588		2,763,434
Equipment under construction		--		887,279
Deferred loan cost, net		100,410		104,666
Total assets	$	20,360,231	$	21,292,317

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	631,721		950,681
Accrued expenses		571,767		710,332
Accrued taxes		-		155,553
Deferred revenues		3,953,249		3,945,364
Current maturity of long-term debt		624,593		624,818
Total current liabilities		5,781,330		6,386,748

LONG-TERM DEBT
Notes payable- noncurrent		4,668,914		4,824,453

STOCKHOLDERS’ EQUITY
Preferred stock- par value $.0001 per share, 10,000,000 shares
authorized, of which 9,000,000 are designated as Series A Preferred
Stock, with 6,295,508 shares issued and outstanding at June 30,2009
and 6,295,508 at March 31, 2009 (liquidation preference of $1,794,220 and $1,794,220 at June 30, 2009 and March 31, 2009, respectively.)		2,287,508		2,287,508
Common stock -par value $.0001 per share, authorized,
90,000,000 shares, issued and outstanding, 13,907,513
shares at June 30, 2009 and March 31, 2009		1,392		1,392
Paid in capital		2,827,395		2,872,779
Retained earnings		4,794,692		4,919,437
Total stockholders’ equity		9,910,987		10,081,116
Total liabilities and stockholders' equity	$	20,360,231	$	21,292,317

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

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TECHPRECISION CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended
	June 30 ,
	2009			2008
Net sales	$	3,318,911		$	11,658,134
Cost of sales		2,754,109			8,277,803
Gross profit		564,802			3,380,331
Operating expenses:
Salaries and related expenses		393,367			435,095
Professional fees		76,212			47,687
Selling, general and administrative		298,421			138,996
Total operating expenses		768,000			621,778
Income from operations		(203,198	)		2,758,553
Other income (expenses)
Interest expense		(104,162	)		(118,781	)
Interest income		3,186			--
Finance costs		(4,256	)		(3,826	)
Total other income (expense)		(105,232	)		(122,607	)

Income (loss) before income taxes		(308,430	)		2,635,946
Provision for income taxes		183,685			(1,064,250	)
Net (loss) income	$	(124,745	)	$	1,571,696
Net (loss) income per share of common stock (basic)	$	(0.01	)	$	0.12
Net (loss) income per share (basic) and net income per share (diluted)	$	(0.01	)	$	0.06
Weighted average number of shares outstanding (basic)		13,907,513			12,925,606
Weighted average number of shares outstanding (diluted)		13,907,513			26,421,957

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

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TECHPRECISION CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

	Three Months Ended
	June 30,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(124,745	)	$	1,571,696
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		121,383			136,471

Changes in operating assets and liabilities:
Accounts receivable		(236,723	)		(1,891,316	)
Deferred income taxes		(246,133	)		(90,772	)
Inventory		46,195			(57,584	)
Costs incurred on uncompleted contracts		(454,217	)		4,790
Other receivables		29,979			--
Prepaid expenses		27,390			787,284
Accounts payable and accrued expenses		(725,578	)		1,316,052
Accrued severance		112,500			--
Customer advances		593,307			(551,836	)
Net cash provided by (used in)operating activities		(856,642	)		1,224,785

CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment		--			(123,540	)
Deposits on equipment		--			(150,000	)
Net cash used in investing activities		--			(273,540	)

CASH FLOWS FROM FINANCING ACTIVITIES
Capital distribution of WMR equity		(45,384	)		(46,875	)
Issuance of common stock on exercise of warrants		--			170,060
Payment of notes and lease obligations		(156,768	)		(153,217	)
Net cash used in financing activities		(202,152	)		(30,032	)

Net (decrease) increase in cash and cash equivalents		(1,058,794	)		921,213
Cash and cash equivalents, beginning of period		10,462,737			2,852,676
Cash and cash equivalents, end of period	$	9,403,943		$	3,773,889

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

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TECHPRECISION CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(continued)

	Three Months Ended June 30,
	2009		2008
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid during the year for:
Interest expense	$	104,162	$	118,781
Income taxes	$	218,000	$	937,067

SUPPLEMENTAL INFORMATION – NONCASH TRANSACTIONS:

Three months Ended June 30, 2009

The company placed $887,279 of equipment which was under construction at the beginning of the period into service.

Three months Ended June 30, 2008

During the three months ended June 30, 2008, the Company issued 723,000 shares of common stock upon conversion of 553,093 shares of series A preferred stock, based on a conversion ratio of 1.3072 shares of common stock for each share of series A preferred stock. The conversion price of each share of common stock was computed at $0.2180.

During the three months ended June 30, 2008, the Company issued 390,000 shares of common stock upon exercise of 390,000 warrants having an exercise price of $0.43605. The Company had estimated the costs of warrants at $.03 per warrant using Black-Scholes model, at the time of issuance.

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

NOTE 1 - DESCRIPTION OF BUSINESS

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

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

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

On February 24, 2006, Techprecision acquired all stock of Ranor in a transaction which is accounted for as a recapitalization (reverse acquisition), with Ranor being treated as the acquiring company for accounting purposes.

The accompanying consolidated financial statements include the accounts of the Company and Ranor as well as a variable interest entity, WM Realty. Intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

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

Fair Values of Financial Instruments

The Company’s financial instruments consist primarily of cash, cash equivalents, accounts receivable, and accounts payable. The carrying values of these financial instruments approximate their fair values.

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements,” on April 1, 2008. This statement defines fair value, establishes a framework to measure fair value, and expands disclosures about fair value measurements. SFAS No. 157 establishes a fair value hierarchy used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

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

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

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

In February 2008, the FASB issued Staff Position (“FSP”) No. FAS 157-2, “Effective Date of FASB Statement No. 157,” which delays the effective date of SFAS No. 157 for non-financial assets and liabilities to fiscal years beginning after November 15, 2008. The Company has analyzed the requirements of FSP No. FAS 157-2 and does not believe it has any impact on its financial condition, results of operations, or cash flows.

In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active.” This statement clarifies that determining fair value in an inactive or dislocated market depends on facts and circumstances and requires significant management judgment. This statement specifies that it is acceptable to use inputs based on management estimates or assumptions, or for management to make adjustments to observable inputs to determine fair value when markets are not active and relevant observable inputs are not available. FSP 157-3 does not have an impact on the Company’s financial statements.

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The Company adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” effective March 1, 2008, and elected not to establish a fair value for its financial instruments and certain other items under this statement. Therefore, the Company’s adoption of this statement did not impact its consolidated financial statements during the three months ended June 30, 2009.

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

Cash and cash equivalents

Holdings of highly liquid investments with maturities of three months or less, when purchased, are considered to be cash equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value. The deposits are maintained in a large regional bank and the amount of federally insured cash deposits was $250,000 as of June 30, 2009 and $100,000 as of June 30, 2008.

Accounts receivable

Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Current earnings are also charged with an allowance for sales returns based on historical experience. There was no bad debt expense for the quarters ended June 30, 2009 and 2008.

Inventories

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

Notes Payable

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

Long-lived Assets

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

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We account for the impairment or disposal of long-lived assets in accordance with the provisions of the Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 requires an assessment of the recoverability of our investment in long-lived assets to be held and used in operations whenever events or circumstances indicate that their carrying amounts may not be recoverable. Such assessment requires that the future cash flows associated with the long-lived assets be estimated over their remaining useful lives. An impairment loss may be required when the future cash flows are less than the carrying value of such assets

Major maintenance activities

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

Leases

Operating leases are charged to operations as paid. Capital leases are capitalized and depreciated over the term of the lease. A lease is considered a capital lease if the lease contains an option to purchase the property for less than fair market value.

Convertible Preferred Stock and Warrants

In accordance with EITF 00-19, the Company initially measured the fair value of the series A preferred stock by the amount of cash that was received for their issuance. The Company subsequently determined that the convertible preferred shares and the accompanying warrants were equity instruments under SFAS 150 and 133. Although the Company had an unconditional obligation to issue additional shares of common stock upon conversion of the series A preferred stock if EBITDA per share was below the targeted amount, the certificate of designation relating to the series A preferred stock does not require the Company to issue shares that are registered pursuant to the Securities Act of 1933, and as a result, the additional shares issuable upon conversion of the Series A preferred stock need not be registered shares. Our preferred stock also met all other conditions for the classification as equity instruments. The Company had a sufficient number of authorized shares, there is no required cash payment or net cash settlement requirement and the holders of the series A preferred stock had no right higher than the common stockholders other than the liquidation preference in the event of liquidation of the Company.

The Company’s warrants were excluded from derivative accounting because they were indexed to the Company’s own unregistered common stock and were classified in stockholders’ equity section according to SFAS 133 paragraph 11(a), under preferred stock.

The Company recorded the series A preferred stock to permanent equity in accordance with the terms of the Abstracts - Appendix D - Topic D-98: “Classification and Measurement of Redeemable Securities.”

Shipping Costs

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

Selling, General, and Administrative

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

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Stock Based Compensation

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

Earnings per Share of Common Stock

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

Revenue Recognition and Costs Incurred

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

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.

Income Taxes

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

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

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According to FASB Codification740-270-25, tax (benefit) related to interim period ordinary income (loss) is computed at an estimated annual effective tax rate and tax (benefit) related to all other items are individually computed and recognized when the items occur. The tax effects of losses that arise in the early portion of a fiscal year are recognized only when the benefits are expected to be either realized during the year or recognized as a deferred tax asset at the end of the year. Based on projected contractual profitability during the fiscal year, the company has recognized a net tax benefit of $183,685 in the three months ended June 30, 2009 that it would expect to realize during subsequent periods of profitability during the remainder of the fiscal year.

Interest and penalties are included in general and administrative expenses.

Variable Interest Entity

The Company has consolidated WM Realty, a variable interest entity that entered into a sale and leaseback contract with the Company, in 2006, to conform to FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46). The Company has also adopted the revision to FIN 46, FIN 46R, which clarified certain provisions of the original interpretation and exempted certain entities from its requirements. The creditors of WM Realty do not have recourse to the general credit of Techprecision or Ranor.

Recent Accounting Pronouncements

In April 2009, the FASB issued FSP 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (“FSP 107-1/APB 28-1”). FSP 107-1/APB 28-1 amends the requirements in FASB 107, Disclosure about Fair Value of Financial Instruments, to require disclosure about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. The Company will disclose the fair value of financial instruments under FSP 107-1/APB 28-1 if they are not already carried at fair value.

In May 2009, the FASB issued FAS 165, Subsequent Events (“FAS 165”). FAS 165 is to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this Statement sets forth:

1.	The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements;

2.	The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and

3.	The disclosures that an entity should make about events or transactions that occurred after the balance sheet date.

FAS 165 is effective for periods ending after June 15, 2009 and its adoption did not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued FSP 157-4, Determining Fair Value When Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP 157-4”). FSP 157-4 provides guidance in determining fair value when the volume and level of activity for the asset or liability have significantly decreased and on identifying transactions that are not orderly. FSP 157-4 requires disclosure in interim and annual periods of the inputs and valuation techniques used to measure fair value and a discussion of changes in valuation techniques. FSP 157-4 is effective for periods ending after June 15, 2009 and its adoption did not have a material impact on the Company’s consolidated financial statements or the fair value of its financial assets.

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In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairment (“FSP 115-2/124-2”). FSP 115-2/124-2 amends the requirements for the recognition and measurement of other-than-temporary impairments for debt securities by modifying the pre-existing “intent and ability” indicator. Under FSP 115-2/124-2, an other-than-temporary impairment is triggered when there is an intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the security is not expected to recover the entire amortized cost basis of the security. Additionally, FSP 115-2/124-2 changes the presentation of an other-than-temporary impairment in the income statement for those impairments involving credit losses. The credit loss component will be recognized in earnings and the remainder of the impairment will be recorded in other comprehensive income. FSP 115-2/124-2 is effective for periods ending after June 15, 2009 and its adoption did not have a material impact on the Company’s consolidated financial statements.

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

As of June 30, 2009 and March 31, 2009, property, plant and equipment consisted of the following:

	June 30, 2009 (unaudited)			March 31, 2009 (audited)
Land	$	110,113		$	110,113
Building and improvements		1,486,349			1,486,349
Machinery equipment, furniture and fixtures		4,893,515			4,006,235
Equipment under capital leases		56,242			56,242
Total property, plant and equipment		6,546,219			5,658,939
Less: accumulated depreciation		(3,012,631	)		(2,895,505)
Total property, plant and equipment, net	$	3,533,588		$	2,763,434

Depreciation expense for the periods ended June 30, 2009 and 2008 was $117,126 and $132,645, respectively. Land and buildings (which are owned by WM Realty - a consolidated entity under Fin 46 (R)) are collateral for the $3,200,000 Amalgamated Bank Mortgage Loan described in greater detail under Note 6 Long-Term Debt. Other fixed assets of the Company together with its other personal properties, are collateral for the Sovereign Bank $4,000,000 secured loan and line of credit.

The Company has placed $887,279 of equipment into service during the three months ended June 30, 2009 that it had ordered in 2008 and received in January 2009. The new equipment expands the Company’s machining capacity.

NOTE 4 - COSTS INCURRED ON UNCOMPLETED CONTRACTS

The Company recognizes revenues based upon the units-of-delivery method (see Note 2). The advance billing and deposits include down payments for acquisition of materials and progress payments on contracts. The agreements with the buyers of the Company’s products allow the Company to offset the progress payments against the costs incurred. The following table sets forth information as to costs incurred on uncompleted contracts as of June 30, 2009 and March 31, 2009:

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	June 30, 2009 (unaudited)			March 31, 2009 (audited)
Cost incurred on uncompleted contracts, beginning balance	$	12,742,217		$	10,633,862
Total cost incurred on contracts during the period		3,208,327			28,078,982
Less cost of sales, during the period		(2,754,110	)		(25,970,626	)
Cost incurred on uncompleted contracts, ending balance	$	13,196,434		$	12,742,218

Billings on uncompleted contracts, beginning balance	$	9,081,416		$	6,335,179
Plus: Total billings incurred on contracts, during the period		3,904,330			40,833,972
Less: Contracts recognized as revenue, during the period		(3,318,911	)		(38,087,735	)
Billings on uncompleted contracts, ending balance	$	9,666,835		$	9,081,416

Cost incurred on uncompleted contracts, ending balance	$	13,196,434		$	12,742,218
Billings on uncompleted contracts, ending balance		(9,666,835	)		(9,081,416	)
Costs incurred on uncompleted contracts, in excess of progress billings	$	3,529,599		$	3,660,802

As of June 30, 2009 and March 31, 2009, the Company had deferred revenues totaling $3953,249 and $3,945,364, respectively. Deferred revenues represent the customer prepayments on their contracts.

NOTE 5 - PREPAID EXPENSES

As of June 30, 2009 and March 31, 2009, the prepaid expenses included the following:

	June 30, 2009 (unaudited)		March 31, 2009 (audited)
Prepayments on material purchases	$	1,414,433	$	1,418,510
Insurance		83,139		140,237
Other		58,272		24,487
Total	$	1,555,844	$	1,583,234

NOTE 6 – LONG-TERM DEBT

The following debt obligations were outstanding on June 30, 2009 and March 31, 2009:

	June 30, 2009 (unaudited)			March 31, 2009 (audited)
Sovereign Bank Secured Term Note Payable	$	2,142,858		$	2,285,715
Amalgamated Bank Mortgage Loan		3,109,188			3,118,747
Ford Motor Credit Vehicle Loan		-			1,098
Total long-term debt		5,252,046			5,405,560
Principal payments due within one year		(611,089	)		(611,362	)
Principal payments due after one year	$	4,640,957		$	4,794,198

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

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Significant terms associated with the Sovereign debt facilities are summarized below.

Term Note:

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

The Term Note is subject to various covenants that include the following: the loan collateral comprises all personal property of Ranor, including cash, accounts receivable inventories, equipment, financial and intangible assets. The company must also maintain a ratio of earnings available to cover fixed charges of at least 120% of the fixed charges for the rolling four quarters, tested at the end of each fiscal quarter. The company has incurred a loss in the three months ended June 30, 2009 but meets the covenants after that loss. Additionally the Company must also maintain an interest coverage ratio of at least 2:1 at the end of each fiscal quarter. Ranor’s obligations under the notes to the bank are guaranteed by Techprecision.

Revolving Note:

The Revolving Note bears interest at a variable rate determined as the Prime Rate, plus 1.5% annually on any outstanding balance. The borrowing limit on the Revolving Note has been limited to the sum of 70% of the Company’s eligible accounts receivable plus 40% of eligible inventory up to a maximum borrowing limit of $1,000,000. The agreement has been amended several times with the effect of increasing the maximum available borrowing limit to $2,000,000 as of June 30, 2009. There were no borrowings outstanding under this facility as of June 30, 2009 and 2008. The Company pays and unused credit line fee .25% on the average unused credit line amount in the previous month. The Company received notice from Sovereign Bank that this facility had been renewed on August

Capital Expenditure Note:

The initial borrowing limit under the Capital Expenditure Note was $500,000 and has been amended several times resulting in a borrowing limit of $3,000,000 available under the facility as of June 30, 2009. The facility is open for renewal on an annual basis. Under the facility, the Company may borrow 80% of the original purchase cost of qualifying capital equipment. The interest rate is LIBOR, plus 3%. The Company is obligated to make interest only payments monthly on any borrowings through November 30, 2009 and on December 1, 2009 any outstanding borrowings and interest will be due and payable monthly on a five year amortization schedule. There were no amounts outstanding under this facility as of June 30, 2009 and March 31, 2009. The Company is however in the process of financing approximately $1.1 million of qualifying equipment purchased as of June 30, 2009 under the facility and expects to draw down $880,000 in borrowings during August 2009.

Mortgage Loan:

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

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

As of June 30, 2009, the maturities of long-term debt were as follows:

Year ending June 30,
2010	$	611,089
2011		613,893
2012		616,896
2013		477,254
2014		52,124
Due after 2014		2,880,790
Total	$	5,252,046

In addition to $5,252,046, the total long term long-term debt of $5,292,507 includes $40,461 of capitalized lease obligations (see Note 9).

NOTE 7 - INCOME TAXES

For the three months ended June 30, 2009 and 2008, the Company recorded provisions for the federal and State income tax benefit and income tax expense of $183,685 and $(1,064,250), respectively. The effective tax benefit and expense rates for the three months ended June 30, 2009 and 2008 were (60)% and 40% respectively. The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 39% was due primarily to differences in the lives and methods used to depreciate and/or amortize our property and equipment, timing differences of expenses related compensated absences, net operating loss carryforwards, and operating losses that occurred during the period.

As of June 30, 2009, the Company’s federal net operating loss carry-forward was approximately $1,780,714. If not utilized, the federal net operating loss carry-forward of Ranor and Techprecision will expire in 2025 and 2027, respectively. Furthermore, because of over fifty percent change in ownership as a consequence of the reverse acquisition in February 2006, as a result of the application of Section 382 of the Internal Revenue Code, the amount of net operating loss carry forward used in any one year in the future is substantially limited.

NOTE 8 - RELATED PARTY TRANSACTIONS

Sale and Lease Agreement and Intra-company Receivable

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

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

The only assets of WM Realty available to settle its obligations are $48,052 of cash and real property acquired from Ranor, Inc. at a cost of $3,000,000 less $299,210 of accumulated depreciation. The real property has a net carrying cost of $1,143,435 on Techprecision’s consolidated balance sheet.

The only liability of WM Realty is the mortgage payable to Amalgamated bank with the carrying cost of $3,109,248. Amalgamated Bank, the sole creditor of WM realty, has no recourse to the general credit of Techprecision.

Distribution to WM Realty Members

WM Realty had a deficit equity balance of $291,885 on June 30, 2009. During the three months ended June 30, 2009, WM Realty had a net income of $30,894 and capital distributions of $45,375.

NOTE 9 - LEASES

Ranor, Inc. has leased its manufacturing, warehouse and office facilities in Westminster (Westminster Lease), Massachusetts from WM Realty, a variable interest entity, for a term of 15 years, commencing February 24, 2006. For the three months ended June 30, 2009 and 2008, the Company’s rent expense was $112,500 and $112,500, respectively. Since the Company consolidated the operations of WM Realty pursuant to FIN 46, the rental expense is eliminated in consolidation, the building is carried at cost and depreciation is expensed. The annual rent is subject to an annual increase based on the increase in the consumer price index.

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

The Company previously leased approximately 12,720 square feet of manufacturing space in Fitchburg, Massachusetts from an unaffiliated lessor. The rent expense for the Fitchburg facility was $-0- and $14,100 in the three months ended June 30, 2009 and June 30, 2008, respectively. The lease provided for rent at the annual rate of $50,112 with 3% annual increases, starting 2004. The lease expired in February 2009 and was not renewed.

On February 24, 2009, the Company entered into a lease for 2,089 square feet of office space in Centreville, Delaware. The lease has a three-year term and provides for initial rent of $2,500 per month, escalating to $3,220 per month in year two and $3,395 per month in year three of the lease. The Company has the option to renew this lease for a period of three years at the end of the lease term. During the three months ended June 30, 2009 the Company’s rent expense with respect to the Delaware property was $7,500.

During 2007, the Company also leased certain office equipment under a non-cancelable capital lease. This lease will expire in 2011. Lease payments for capital lease obligations for the three months ended June 30, 2009 totaled $3,253.

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Future minimum lease payments required under operating and capital leases as of June 30, 2009, are as follows:

	Capital		Operating
Year ended June 30,	Leases		Leases
2010	$	15,564	$	480,000
2011		15,564		488,640
2012		12,970		480,555
2013		--		450,000
2014		--		450,000
Thereafter		--		3,450,000
Total minimum payments required		44,098	$	5,799,195
Less amount representing interest		3,637
Present value of future minimum lease payments		40,461
Less current obligations under capital leases		13,504
Long-term obligations under capital leases	$	26,957

NOTE 10 - CAPITAL STOCK

Preferred Stock

The Company has 10,000,000 authorized shares of preferred stock and the board of directors has broad power to create one or more series of preferred stock and to designate the rights, preferences, privileges and limitation of the holders of such series. The board of directors has created one series of preferred stock - the series A convertible preferred stock (“series A preferred stock”).

Each share of series A preferred stock was initially convertible into one share of common stock. As a result of the failure of the Company to meet the levels of earnings before interest, taxes, depreciation and amortization for the years ended March 31, 2006 and 2007, the conversion rate changed, and, at June 30, 2009, each share of series A preferred stock was convertible into 1.3072 shares of common stock, with an effective conversion price of $.2180.

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

During the three months ended June 30, 2009, no shares of series A preferred stock were converted into shares of common stock, respectively.

The Company had 6,295,508 shares of series A preferred stock outstanding at June 30, 2009 and March 31, 2009.

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

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No dividends are payable with respect to the series A preferred stock and no dividends are payable on common stock while series A preferred stock is outstanding. The common stock will not be redeemed while preferred stock is outstanding.

The holders of the series A preferred stock have no voting rights. However, so long as any shares of series A preferred stock are outstanding, the Company shall not, without the affirmative approval of the holders of 75% of the outstanding shares of series A preferred stock then outstanding, (a) alter or change adversely the powers, preferences or rights given to the series A preferred stock, (b) authorize or create any class of stock ranking as to dividends or distribution of assets upon liquidation senior to or otherwise pari passu with the series A preferred stock, or any of preferred stock possessing greater voting rights or the right to convert at a more favorable price than the series A preferred stock, (c) amend its certificate of incorporation or other charter documents in breach of any of the provisions hereof, (d) increase the authorized number of shares of series A preferred stock, or (e) enter into any agreement with respect to the foregoing.

Upon any liquidation the Company is required to pay $.285 for each share of Series A preferred stock. The payment will be made before any payment to holders of any junior securities and after payment to holders of securities that are senior to the series A preferred stock.

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

Common Stock Purchase Warrants

In February 2006, we issued to the investor warrants to purchase 11,220,000 shares of common stock in connection with its purchase of the series A preferred stock. These warrants are exercisable, in part or full, at any time from February 24, 2006 until February 24, 2011. If the shares of common stock are not registered pursuant to the Securities Act of 1933, the holders of the warrants have cashless exercise rights which will enable them to receive the value of the appreciation in the common stock through the issuance of additional shares of common stock. These warrants had initial exercise prices of $0.57 as to 5,610,000 shares and $0.855 as to 5,610,000 shares. As a result of the Company’s failure to meet the EBITDA per share targets for the years ended March 31, 2006 and 2007, the exercise prices per share of the warrants were reduced from $0.57 to $.43605 and from $0.855 to $.654075, respectively.

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

Common Stock

The Company had 90,000,000 authorized common shares at June 30, 2009 and March 31, 2009. The Company had 13,907,513 shares of common stock outstanding at June 30, 2009 and March 31, 2009.

During the three months ended June 30, 2009 the Company issued no shares of common stock.

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NOTE 11 - STOCK BASED COMPENSATION

In 2006, the directors adopted, and the stockholders approved, the 2006 long-term incentive plan (the “Plan”) covering 1,000,000 shares of common stock. The Plan provides for the grant of incentive and non-qualified options, stock grants, stock appreciation rights and other equity-based incentives to employees, including officers, and consultants. The Plan is to be administered by a committee of not less than two directors each of whom is to be an independent director. In the absence of a committee, the plan is administered by the board of directors. Independent directors are not eligible for discretionary options. Pursuant to the Plan, each newly elected independent director received at the time of his election, a five-year option to purchase 50,000 shares of common stock at the market price on the date of his or her election. In addition, the plan provides for the annual grant of an option to purchase 5,000 shares of common stock on July 1st of each year, commencing July 1, 2009, with respect to directors in office in July 2006 and commencing on July 1 coincident with or following the third anniversary of the date of his or her first election. These options are exercisable in installments. Pursuant to the Plan, in July 2006, the Company granted non-qualified stock options to purchase an aggregate of 150,000 shares of common stock at an exercise price of $.285 per share, which was determined to be the fair market value on the date of grant, to the three independent directors.

On April 1, 2007, the Company granted options to purchase 211,660 shares of common stock at an exercise price of $.285 to the employees. The company shares did not trade in the market and had no intrinsic value at the date of grant. It was not possible to reasonably estimate fair market value at their grant date, fair value, and thus according to SFAS 123(R) they were measured at intrinsic value.

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

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

At June 30, 2009, 455,841 shares of common stock were available for grant under the Plan.

The status of the Company stock options and stock awards are summarized as follows:

			Weighted		Aggregate
	Number Of		Average		Intrinsic
	Options		Exercise Price		Value
Outstanding at March 31, 2009		544,159	$	0.384	$	87,240
Granted		--		--		--
Outstanding at June 30, 2009		544,159	$	0.384	$	87,240

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The following table summarizes information about our options outstanding at June 30, 2009:

				Weighted Average Remaining			Weighted		Exercisable Options
Exercise Price		Number Outstanding		Contractual Life (in years)			Average Exercise Price		Number Outstanding		Exercise Price
	0.285		371,659		2.7-7	.0		0.285		371,659		0.285
	0.49		150,000		4.7			0.490		-		-
	1.31		22,500		4.3			1.310		13,500		1.310
			544,159		3.6			0.384		395,159		0.344

As of June 30, 2009 there was $67,300, respectively, of total unrecognized compensation cost related to non vested stock options. These costs are expected to be recognized over three years. No shares fully vested during the three months ended June 30, 2009.

The fair value was estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stock. The risk-free interest rate was selected based upon yields of five year US Treasury issues. The expected life of the option was estimated at one half of the contractual term of the option and the vesting period. The assumptions utilized for option grants during the periods presented are as follows:

	June 30,
	2009
Volatility		29.8	%
Risk-Free Interest Rate		2.7	%
Expected Life of Options		5 yrs.

No options were granted during the three months ended June 30, 2009.

NOTE 12 - CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

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

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

The following table sets forth information as to revenue derived from those customers who accounted for more than 10% of our revenue in the three months ended June 30, 2009 and 2008:

		Three Months Ended June 30,
		2009				2008
Customer		Dollars		Percent		Dollars		Percent
	A	$	1,321,111		40%	$	1,552,084		13%
	B		691,237		21%
	C		488,177		15%
	D						8,046,100		69%

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During April 2009, the Company’s largest customer, GT Solar, provided notice of its intent to cancel a portion of an open purchase order reducing the total purchase commitment by approximately $16.8 million. Post the cancellation, the remaining GT Solar backlog of approximately $11.7 million includes approximately $3.4 million of open product purchase orders and approximately $8.3 million of material buyback.

NOTE 13 EARNINGS PER SHARE (“EPS”)

Basic EPS is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding. Diluted EPS also includes the effect of dilutive potential common shares. The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required by SFAS No. 128, “Earnings Per Share,” (“EPS”).

	June 30,			June 30,
	2009			2008
Basic EPS
Net (loss) income	$	(124,755	)	$	1,571,696
Weighted average shares		13,907,513			12,925,606
Basic (loss) income per share	$	(0.01	)	$	0.12
Diluted EPS
Net (loss) income	$	(124,755	)	$	1,571,696
Dilutive effect of Convertible preferred stock, warrant and stock options		--			13,496,351
Diluted weighted average shares		13,907,513			26,421,957
Diluted income per share	$	(0.01	)	$	0.06

During the three months ended June 30, 2008 there were no potentially anti-dilutive options, warrants, or convertible preferred stock.

NOTE 14 - SEGMENT INFORMATION

We operate in one industry segment - metal fabrication and precision machining. All of our operations, assets and customers are located in the United States.

NOTE 15 –SUBSEQUENT EVENT

On August 4, 2009, Sovereign Bank extended the Company a commitment letter to renew a $2,000,000 revolving working capital line of credit under terms substantially equivalent to those in place on the prior line of credit.

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

Statement Regarding Forward Looking Disclosure

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

Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this report. Investors should evaluate any statements made by the Company in light of these important factors.

Overview

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

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

During the last several years, the demand for our services has been relatively strong. However recent recessionary pressures have affected the requirements of our customers. GT Solar, which has been our largest customer for each of the past three fiscal years, has slowed production significantly and in April 2009 provided notice of its’ intention to cancel the majority of orders included in our June 30, 2009 backlog. Other customers have delayed deliveries of existing orders and have delayed the placement of new orders.

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A significant portion of our revenue is generated by a small number of customers. During the three months ended June 30, 2009, our largest customer, BAE Systems, accounted for approximately 40% of our revenue, our second largest customer, Still River Systems, accounted for approximately 21% of our revenue, and our third largest customer, General Dynamics Electric Boat Corporation ,accounted for approximately 15% of our revenue. For the three months ended June 30, 2008, our largest customer, GT Solar, accounted for 69% of our revenue and BAE accounted for 13% of our revenue.

Our contracts are generated both through negotiation with the customer 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, our financial condition and our ability to price our services competitively. Although some of our contracts contemplate the manufacture of one or a limited number of units, we are seeking more long-term projects with a more predictable cost structure, and whenever possible. During the three months ended June 30, 2009, our sales and net loss were $3.3 million and ($125,745), respectively as compared to sales of $11.7 million and net income of $1.6 million, respectively, for the three months ended June 30, 2008. Our gross margin for the three months ended June 30, 2009 was 17% as compared to 29% in the three months ended June 30, 2008 as a result of lesser sales volume. Both net sales and gross margin declined in the three months ended June 30, 2009, reflecting the effects of the global economic downturn on our customers and their customers.

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

As of June 30, 2009, we had a backlog of orders totaling approximately $39.5 million, of which approximately $28.5 million represented orders from GT Solar. During the three months ended June 30, 2009, GT Solar provided notice of its intent to cancel a portion of an open purchase order reducing its total purchase commitment by approximately $16.8 million, reducing our total backlog to $22.7 million. Post the cancellation, the remaining GT Solar backlog of approximately $11.7 million includes approximately $3.4 million of open product purchase orders and approximately $8.3 million of material buyback. The backlog also includes orders in excess of $1.0 million from each of five customers totaling more than $7.9 million in addition to GT Solar. We expect to deliver the backlog during the years ended March 31, 2010 and March 31, 2011.

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

Growth Strategy

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

Diversifying Our Core Industries

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

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As a result of both the increased prices of oil and gas and the resulting greenhouse gas emissions, nuclear power may become an increasingly important source of energy. Because of our manufacturing capabilities, our certification from the American Society of Mechanical Engineers and our historic relationships with suppliers in the nuclear power industry, we believe that we are well positioned to benefit from any increased activity in the nuclear sector that may result. However, revenues derived from the nuclear power industry were insignificant for the three months ended June 30, 2009 and currently constitute approximately 5% of our backlog that we expect to deliver by March 31, 2010 and March 2011. We cannot assure you that we will be able to develop any significant business from the nuclear industry.

In addition to the nuclear energy industry, we are also exploring potential business applications focused on the medical industry. These efforts include the development and fabrication of medical isotopes storage solutions and the development and fabrication of critical components for proton beam therapy machines designed to be utilized in the treatment of cancer. Net sales from our proton beam therapy customer accounted for 21% of our total net sales for the three months ended June 30, 2009 while sales to our medical isotope customer were not significant during the three months ended June 30, 2009.

Expansion of Manufacturing Capabilities

In addition to the possible expansion of our existing manufacturing capabilities through expansion of our existing facilities, we may, from time to time, pursue opportunistic acquisitions to increase and strengthen our manufacturing, marketing, product development capabilities and customer diversification. We do not have any current plans for any acquisition, and we cannot give any assurance that we will complete any acquisition.

Impact of Recent Legislation

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

Critical Accounting Policies

The preparation of the Company’s financial statements in conformity with generally accepted accounting principles in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including all notes thereto, and related disclosures of commitments and contingencies, if any. We rely on historical experience and other assumptions we believe to be reasonable in making our estimates. Actual financial results of the operations could differ materially from such estimates. There have been no significant changes in the assumptions, estimates and judgments used in the preparation of our financial statements for the three months ended June 30, 2009 from the assumptions, estimates and judgments used in the preparation of our audited financial statements for the year ended March 31, 2009.

Revenue Recognition and Costs Incurred

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

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

Variable Interest Entity

We have consolidated WM Realty, a variable interest entity from which we lease our real estate, to conform to FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46). We have also adopted the revision to FIN 46, FIN 46 (R), which clarified certain provisions of the original interpretation and exempted certain entities from its requirements.

Income Taxes

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

For the three months ended June 30, 2009 and 2008, the Company recorded provisions for the Federal and State income tax benefit and income tax expense of $183,685 and $(1,064,250), respectively. The effective tax benefit and expense rates for the three months ended June 30, 2009 and 2008 were (60)% and 40% respectively. The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 39% was due primarily to differences in the lives and methods used to depreciate and/or amortize our property and equipment, timing differences of expenses related compensated absences, net operating loss carryforwards, and operating losses that occurred during the period.

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New Accounting Pronouncements

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

Results of Operations

Three Months Ended June 30, 2009 and 2008

The following table sets forth information from our statements of operations for the three months ended June 30, 2009 and 2008, in dollars and as a percentage of revenue (dollars in thousands):

													Changes Three Months
													Ended June 30,
	2009						2008						2009 to 2008
	Amount			Percent			Amount			Percent			Amount			Percent
Net sales	$	3,318			100	%	$	11,658			100	%	$	(8,340	)		(72	)%
Cost of sales		2,754			83	%		8,277			71	%		(5,523	)		(67	)%
Gross profit		564			17	%		3,381			29	%		(2,817	)		(83	)%

Payroll and related costs		394			12	%		435			4	%		(41	)		(9	)%
Professional expense		76			2	%		47			0	%		29			62	%
Selling, general and administrative		298			9	%		139			1	%		159			114	%
Total operating expenses		768			23	%		621			5	%		147			24	%

Income (loss) from operations		(204	)		(6	)%		2,760			24	%		(2,964	)		(107	)%
Interest expense, net		(101	)		(3	)%		(119	)		(1	)%		18			(15	)%
Finance costs		(4	)		0	%		(4	)		0	%		-			-	%
Income (loss) before income taxes		(309	)		(9	)%		2,637			23	%		(2,946	)		(112	)%
Provision for income taxes, net		184			6	%		(1,064	)		(9	)%		1,248			117	%
Net (loss) income	$	(125	)		(4	)%		1,573			13	%		(1,698	)		(108	)%

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

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

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Recent disruptions in the global capital markets have resulted in reduced availability of funding worldwide and a higher level of uncertainty experienced by some end-user solar cell module manufacturers. As a result, our customers have made reductions in their direct labor workforce and reported decreases in their order backlogs as well as adjustments to the procurement of materials in their photovoltaic related production. In response, we have been negotiating extensions of the delivery schedules and other modifications under some of our existing contracts. During the three months ended, 2009, GT Solar provided notice of its intent to cancel a portion of an open purchase order reducing the total purchase commitment by approximately $16.8 million, reducing our total backlog to $21.8 million. Post the cancellation, the remaining GT Solar backlog of approximately $11.7 million includes approximately $3.4 million of open product purchase orders and approximately $8.3 million of material buyback.

Net Sales

Net sales decreased by $8.3 million , or 72%, from $11.7 million for the three months ended June 30, 2008 to $3.3 million for the three months ended June 30, 2009. A significant portion of the decrease resulted from decrease in sales to GT Solar. The global economic downturn adversely impacted our operations in much of the first quarter of fiscal year 2009.

Cost of Sales and Gross Margin

Our cost of sales for the three months ended June 30, 2009 decreased by $5.5 million to $2,8 million a decrease of 67%, from $8.3 million for three months ended June 30, 2008. The decrease in the cost of sales was principally due to the reduction in volume of sales. The decline in gross profit margin was $2.8 million (83%) from $3.4 million or 29% of sales, during the three months ended June 30, 2008 to $564,,802 or 17% of sales for the period ending June 30, 2009. Contributing to the deline in gross margin were costs associated with underutilized capacity as well as relatively higher labor cost on several contracts.

Operating Expenses

Our payroll and related costs within our selling and administrative costs were $393,367 for the three months ended June 30, 2009 as compared to $435,095 for the three months ended June 30, 2008. The $41,529 (10%) decrease in payroll is due primarily to a decline in bonus compensation compared to the prior year..

Professional fees increased from $47,687 for the three months ended June 30, 2008 to $76,212 for the three months ended June 30, 2009. This increase was primarily attributable to an increase in legal costs related to contract review and SEC filing requirements.

Selling, administrative and other expenses three months ended June 30, 2009 were $298,421 as compared to $138,996 for three months ended June 30, 2008, an increase of $159,425 or 114%. Additional expenditures of $112,500 related to executive severance pay were the principal component of the increase.

Interest Expense

Interest expense for three months ended June 30, 2009 was $104,162 compared to $118,781 for the three months ended June 30, 2008. The decrease of $14,619 (11%) is a result of lower principal balances of the Sovereign and Amalgamated bank loans outstanding in the three months ended June 30, 2009 as compared to the three months ended June 30, 2008.

Net Income

As a result of the foregoing, our net loss was ($124,745) ($0.01 per share) for the three months ended June 30, 2009, as compared to net income of $1.57 million ($0.12 and $.0.06 per share basic and diluted, respectively) for the three months ended June 30, 2008.

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Liquidity and Capital Resources

At June 30 2009, we had working capital of $10..9 million as compared to working capital of $11.1 million at March 31, 2009, a decrease of $205,787 or 1.8% . The following table sets forth information as to the principal changes in the components of our working capital (dollars in thousands).

Category	June 30, 2009		March 31, 2009		Change Amount			Percentage Change
Cash and cash equivalents		9,404		10,463		(1,059	)		(10.1	)%
Accounts receivable, net		1,656		1,419		237			16.7	%
Costs incurred on uncompleted contracts		3,530		3,661		(131	)		(3.6	)%
Raw material inventories		305		351		(46	)		(13.1	)%
Prepaid expenses		1,556		1,583		(27	)		(1.7	)%
Deferred tax asset		246		--		246			--	%
Other receivables		30		60		(30	)		(50.0	)%
Accounts payable		632		951		(319	)		(33.6	)%
Accrued expenses		459		710		(251	)		(35.3	)%
Accrued severance		113		-		113
Accrued taxes		-		156		(156	)		(100.0	)%
Progress billings in excess of cost of uncompleted contracts		3,953		3,945		8			0.2	%
Current maturity of long-term debt		625		625		(0	)		0.0	%

The cash used in operations was $856,642 for the three months ended June 30, 2009 as compared to the cash provided by operations of $1,2 million for the three months ended June 30, 2008. The decrease in cash flows from operations of $2.1 million or 170%, was the net effect of a decrease in the net profits, decrease in costs incurred on uncompleted contracts and payment of accounts payable and accrued expenses in the three months ended June 30, 2009.

The net cash used in financing activities was $202,152 for the three months ended June 30, 2009 as compared to $30,032 for the three months ended June 30, 2008. During the three months ended June 30, 2009, we made principal payment of $142,857 on our loans from Sovereign Bank and principal payments of $3,251 on capital lease obligations. In addition, WM Realty made principal payments on its mortgage of $9,559. WM Realty also made capital distributions to its members of $45,375. During the three months ended June 30, 2008, the Company made principal payments of $142,857 on our loans from Sovereign Bank and received $170,060 from the exercise of warrants. WM Realty made mortgage principal reduction payments totaling $8,788 and made capital distributions to its members of $46,875.

During the three months ended June 30, 2009, the installation of the equipment under construction at March 31, 2009 had been fully completed, placed into service and was transferred to property, plant and equipment. We did not engage in additional investing activities for the three months ended June 30, 2009. For the three months ended June 30, 2008 we invested $123,540 in property, plant and equipment and paid a deposit on equipment of $150,000. This deposit was credited to our purchase price in fiscal 2009 when the equipment was received.

The net decrease in cash was $1,.06 million for the three months ended June 30, 2009, as compared to $921,214 increase for the for the three months ended June 30, 2008.

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At June 30, 2009, WM Realty had an outstanding mortgage of $3.1 million on the real property that it leases to Ranor. The mortgage has a term of ten years, maturing November 1, 2016, bears interest at 6.75% per annum, and provides for monthly payments of principal and interest of $20,955. The monthly payments are based on a thirty-year amortization schedule, with the unpaid principal being due in full at maturity. WM Realty has the right to prepay the mortgage note upon payment of a prepayment premium of 5% of the amount prepaid if the prepayment is made during the first two years, and declining to 1% of the amount prepaid if the prepayment is made during the ninth or tenth year.

Debt Facilities

We have a loan and security agreement with Sovereign Bank, dated February 24, 2006, pursuant to which we borrowed $4.0 million on a term loan basis in connection with our acquisition of Ranor. As a result of amendments to the loan and security agreement, we currently have a $2.0 million revolving credit facility which is available until June 30, 2010. We also have a $3.0 million capital expenditure facility which is available until November 30, 2009. Pursuant to the terms of the capital expenditure facility we may request financing of capital equipment purchased through November 30, 2009, at which time any amounts borrowed under the line are to be amortized over a five year period. 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 2 to 1. At June 30, 2009, we were in compliance with both of these ratios, with Ranor’s ratio of earnings available for fixed charges to fixed charges being 3.6 to 1 and Ranor’s interest coverage ratio, calculated on a rolling basis being 15.2 to 1.

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

The term note is subject to various covenants that include the following: the loan collateral comprises all personal property of Ranor, including cash, accounts receivable inventories, equipment, financial and intangible assets. Ranor must also maintain a ratio of earnings available to cover fixed charges of at least 120% of the fixed charges for the rolling four quarters, tested at the end of each fiscal quarter. Additionally, Ranor must also maintain an interest coverage ratio of at least 2:1 at the end of each fiscal quarter. Ranor’s obligations under the notes to the bank are guaranteed by Techprecision. At June 30, 2009, there were no borrowings under the revolving note and the maximum available under the borrowing formula was $2.0 million.

Under the $3.0 million capital expenditures facility Ranor is able to borrow up to $3.0 million until November 30, 2009. We pay interest only on borrowings under the capital expenditures line until November 30, 2009, at which time the principal balance is amortized over five years, commencing December 31, 2009. The interest on borrowings under the capital expenditure line is either equal to the prime plus ½% or the LIBOR rate plus 3%, as the Company may elect. Any unpaid balance on the capital expenditures facility is to be paid on November 30, 2014. As of June 30, 2009 and June 30, 2008, there were no borrowings outstanding under either the revolving line or the capital expenditure line. We intend to borrow approximately $880,000 to finance the purchase of equipment that has been installed and placed in service during the quarter ended June 30, 2009..

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

We believe that the $2.0 million revolving credit facility, which remained unused as of June 30, 2009 and terminates in June 2010, and the $3.0 million capital expenditure facility and our cash flow from operations should be sufficient to enable us to satisfy our cash requirements at least through the end of fiscal 2010. Nevertheless, it is possible that we may require additional funds to the extent that we expand our manufacturing facilities. In the event that we make an acquisition, we may require additional financing for the acquisition. However, we do not have any current plans for any acquisition, and we cannot give any assurance that we will complete any acquisition. We have no commitment from any party for additional funds; however, the terms of our agreement with Barron Partners, particularly Barron Partners’ right of first refusal, may impair our ability to raise capital in the equity markets to the extent that potential investors would be reluctant to negotiate a financing when another party has a right to match the terms of the financing.

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ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of June 30, 2009, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)).

Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2009, to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Controls

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) that occurred during the quarter ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 6 - EXHIBITS

31.1 Rule 13a-14(a) certification of chief executive officer

31.2 Rule 13a-14(a) certification of chief financial officer

32.1 Section 1350 certification of chief executive and chief financial officers

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SIGNATURES

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

	TECHPRECISION CORPORATION (Registrant)

Dated: August 12, 2009	By:	/s/ Richard F. Fitzgerald
		Richard F. Fitzgerald Chief Financial Officer (duly authorized officer and principal financial officer)

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