Filed Pursuant to Rule 424(b)(3)
Registration No. 333-262063
Prospectus
Up
to 3,902,727 Shares
Common
Stock
This prospectus relates to the offer and sale, from time to time, by
the selling securityholders named in this prospectus, or the “Selling Securityholders,” or any of their pledgees, donees,
assignees and successors-in-interest, or collectively, the “permitted transferees,” of (i) up to 3,202,727 shares of
our common stock that were issued to certain investors, or collectively, the “PIPE Investors,” in a private placement in connection
with the closing of the Acquisition (as defined below), (ii) up to 600,000 shares of our common stock that were issued to a certain
former securityholder of Stadco, a wholly owned subsidiary of ours, at the closing of the Acquisition and (iii) up to 100,000 shares
of our common stock issuable upon the exercise of warrants, or the “Acquisition Warrants,” originally issued in connection
with the Acquisition.
We will not receive any proceeds from the sale of shares of common
stock by the Selling Securityholders pursuant to this prospectus. Although, we will receive proceeds from the exercise of the Acquisition Warrants,
if exercised on a cash basis, which proceeds we intend to use for general corporate purposes. However, we will pay the expenses, other than underwriting discounts
and commissions and certain expenses incurred by the Selling Securityholders in disposing of the securities, associated with the sale
of securities pursuant to this prospectus.
We are registering the resale of the securities described above pursuant
to certain registration rights we have granted. Our registration of the resale of the securities covered by this prospectus does not mean
that the Selling Securityholders will offer or sell any of the securities. The Selling Securityholders and any of their permitted transferees
may offer, sell or distribute all or a portion of the securities covered by this prospectus in a number of different ways and at varying
prices. Additional information on the Selling Securityholders, and the times and manner in which they may offer and sell the securities
covered by this prospectus, is provided under “Selling Securityholders” and “Plan of Distribution”
in this prospectus.
You should read this prospectus and any prospectus supplement or amendment
carefully before you invest in our securities.
Our common stock is quoted for trading under the symbol “TPCS”
on the OTCQB Venture Market. On January 6, 2022, the closing price of our common stock was $1.99 per share.
Investing in our securities involves risks that are described in
the “Risk Factors” section beginning on page 7 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities to be issued under this prospectus or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is January 18,
2022.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of the registration statement that we filed
with the Securities and Exchange Commission, or the “SEC,” pursuant to which the Selling Securityholders named herein may,
from time to time, offer and sell or otherwise dispose of the shares of our common stock covered by this prospectus. As permitted by the
rules and regulations of the SEC, the registration statement filed by us includes additional information not contained in this prospectus.
This prospectus and the documents incorporated by reference into this
prospectus include important information about us, the securities being offered and other information you should know before investing
in our securities. You should not assume that the information contained in this prospectus is accurate on any date subsequent to the date
set forth on the front cover of this prospectus or that any information we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference, even though this prospectus is delivered or shares of common stock are sold or
otherwise disposed of on a later date. It is important for you to read and consider all information contained in this prospectus, including
the documents incorporated by reference therein, in making your investment decision. You should also read and consider the information
in the documents to which we have referred you under “Where You Can Find More Information” and “Incorporation
of Certain Information by Reference” in this prospectus.
You should rely only on this prospectus and the information incorporated
or deemed to be incorporated by reference in this prospectus. We have not, and the Selling Securityholders have not, authorized anyone
to give any information or to make any representation to you other than those contained or incorporated by reference in this prospectus.
If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus does not constitute an offer
to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction.
Unless otherwise indicated, information contained or incorporated by
reference in this prospectus concerning our industry, including our general expectations and market opportunity, is based on information
from our own management estimates and research, as well as from industry and general publications and research, surveys and studies conducted
by third parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions
based on such information and knowledge, which we believe to be reasonable. In addition, assumptions and estimates of our and our industry’s
future performance are necessarily uncertain due to a variety of factors, including those described in “Risk Factors”
beginning on page 7 of this prospectus. These and other factors could cause our future performance to differ materially from
our assumptions and estimates.
We and the Selling Securityholders take no responsibility for, and
can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell
only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. No dealer, salesperson
or other person is authorized to give any information or to represent anything not contained in this prospectus, any applicable prospectus
supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you or are incorporated by reference.
This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities, in any jurisdiction where the
offer or sale is not permitted.
For investors outside the United States: neither we nor the Selling
Securityholders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction
where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession
of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our securities and the distribution
of this prospectus outside the United States.
This prospectus contains summaries of certain provisions contained
in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed
or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain
copies of those documents as described in this prospectus under “Where You Can Find More Information.”
This
prospectus contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks,
trade names and service marks referred to in this prospectus may appear without the ®
or TM symbols, but such references are not intended to indicate, in any way, that the applicable
licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend
our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship
of us by, any other entities.
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus
and does not contain all of the information that may be important to you in making an investment decision. This summary is qualified in
its entirety by the more detailed information included elsewhere in this prospectus and/or incorporated by reference herein. Before making
your investment decision with respect to our securities, you should carefully read this entire prospectus, including the information in
our filings with the SEC incorporated by reference into this prospectus.
References in this prospectus to the “Company,” “we,”
“us,” “our” and similar words refer to TechPrecision Corporation and its subsidiaries, Ranor, Inc., Stadco
New Acquisition, LLC, Stadco and Westminster Credit Holdings, LLC, unless the context indicates otherwise, while references to “TechPrecision”
refer to TechPrecision Corporation and not its subsidiaries.
Our Business
We are a manufacturer of precision, large-scale fabricated and machined
metal structural components and systems. We offer a full range of services required to transform raw materials into precision finished
products. We sell these finished products to customers in two main industry groups: defense and precision industrial. The finished products
are used in a variety of markets including defense, aerospace, nuclear, medical and precision industrial. Our mission is to be a leading
end-to-end service provider to our customers by furnishing custom, fully integrated solutions for complete products that require custom
fabrication, precision machining, assembly, integration, inspection, non-destructive evaluation and testing.
We work with our customers to manufacture products in accordance with
the customers’ drawings and specifications. Our work complies with specific national and international codes and standards applicable
to our industry. We believe that we have earned our reputation through outstanding technical expertise, attention to detail, and a total
commitment to quality and excellence in customer service.
About Us
We are a Delaware corporation organized in 2005 under the name Lounsberry
Holdings II, Inc. On February 24, 2006, we acquired all of the issued and outstanding capital stock of our wholly owned subsidiary
Ranor, Inc., or “Ranor.” Ranor, together with its predecessors, has been in continuous operation since 1956. Since February 24,
2006, our primary business has been the business of Ranor. On March 6, 2006, following the acquisition of Ranor, we changed our corporate
name to TechPrecision Corporation.
Wuxi Critical Mechanical Components Co., Ltd., or “WCMC,”
a limited company organized under the laws of the People’s Republic of China, located in Wuxi City, Jiangsu Province, China, was
also one of our other wholly owned subsidiaries until its dissolution and deregistration in November 2021. WCMC has had no operations
or customers for over five years.
On August 25, 2021, the Company completed its previously announced
acquisition of Stadco, a company in the business of manufacturing high-precision parts, assemblies and tooling for aerospace, defense,
research and commercial customers, or the “Acquisition,” pursuant to that certain stock purchase agreement with Stadco New
Acquisition, LLC, Stadco Acquisition, LLC, Stadco and each equity holder of Stadco Acquisition, LLC. On the closing date, pursuant to
the stock purchase agreement, and upon the terms and subject to the conditions therein, the Company, through Stadco New Acquisition, LLC,
acquired all of the issued and outstanding capital stock of Stadco from Stadco Acquisition, LLC in exchange for the issuance of 666,666
shares of the Company’s common stock to Stadco Acquisition, LLC. As a result of the Acquisition, Stadco is now our wholly owned
indirect subsidiary.
General
The manufacturing operations of our Ranor subsidiary are situated on
approximately 65 acres in North Central Massachusetts. Our 145,000 square foot facility houses state-of-the-art equipment which gives
us the capability to manufacture products as large as 100 tons. We offer a full range of services required to transform raw material into
precision finished products. Our manufacturing capabilities include: fabrication operations (cutting, press and roll forming, assembly,
welding, heat treating, blasting and painting) and machining operations including CNC (computer numerical controlled) horizontal and vertical
milling centers. We also provide support services to our manufacturing capabilities: manufacturing engineering (planning, fixture and
tooling development, and manufacturing), quality control (inspection and testing), materials procurement, production control (scheduling,
project management and expediting), and final assembly.
All manufacturing at Ranor’s facility is done in accordance with
our written quality assurance program, which meets specific national codes, and international codes, standards, and specifications. The
standards used for each customer project are specific to that customer’s needs, and we have implemented such standards into our
manufacturing operations.
The manufacturing operations of our Stadco subsidiary are situated
in an industrial warehouse and office location comprised of approximately 182,544 square feet in Los Angeles, California. At this site,
Stadco manufacturers large flight-critical components on several high-profile commercial and military aircraft programs, including military
helicopters. It has been a critical supplier to a blue-chip customer base that includes some of the largest OEMs and prime contractors
in the defense and aerospace industries. Stadco also provides tooling, customized molds, fixtures, jigs and dies used in the production
of aircraft components, and has one of the largest electron beam welding machines set up in the United States, allowing it to weld thick
pieces of titanium and other metals.
Products
We manufacture a wide variety of products pursuant to customer contracts
and based on individual customer needs. We can also provide manufacturing engineering services to assist customers in optimizing their
engineering designs for manufacturing efficiency. We do not design the products we manufacture, but rather manufacture according to “build-to-print”
requirements specified by our customers. Accordingly, we do not distribute the products that we manufacture on the open market and we
do not market any specific products on an on-going basis. We do not own the intellectual property rights to any proprietary marketed product,
and we do not manufacture products in anticipation of orders. Manufacturing operations do not commence on any project before we receive
a customer’s purchase order. We only enter into contracts that cover specific products within the capability of our resources.
Although we seek continuous production programs with predictable cost
structures that provide long-term integrated solutions for our customers, our activities include a variety of both custom-based and production-based
requirements. The custom-based work is typically either a prototype or unique, one-of-a-kind product. The production-based work is repeat
work or a single product with multiple quantity releases.
Changes in market demand for our manufacturing expertise can be significant
and sudden and require us to be able to adapt to the collective needs of the customers and industries that we serve. Understanding
this dynamic, we believe we have developed the capability to transform our workforce to manufacture products for customers across different
industries.
We serve customers in the defense, aerospace, nuclear, medical and
precision industrial markets. Examples of products we have manufactured within such industries during recent years include, but are not
limited to, custom components for ships and submarines, aerospace equipment, components for nuclear power plants and components for large
scale medical systems.
Risks Associated with Our Business
Our business is subject to numerous material and other risks that you
should be aware of before making an investment decision. These risks are described more fully in the section entitled “Risk Factors.”
These risks include, among others, the following:
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We face strong competition in our markets;
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Because most of our contracts are individual purchase orders and not long-term agreements, there is no guarantee that we will be able
to generate a similar amount of revenue in the future;
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Our business may be impacted by external factors, including the COVID-19 pandemic;
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We are dependent on a limited number of customers;
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Any decrease in the availability, or increase in the cost, of raw materials or energy could materially affect our earnings;
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Our operating results may fluctuate significantly from quarter to quarter, and we cannot be certain that we will maintain profitability
in every quarterly reporting period;
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We could be adversely affected by reductions in defense spending;
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Failure to obtain and retain skilled technical personnel could adversely affect our operations;
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The extensive environmental, health and safety regulatory regimes applicable to our manufacturing operations create potential exposure
to significant liabilities;
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We maintain a substantial amount of outstanding indebtedness, which could impair our ability to operate our business;
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Our common stock is quoted on the OTC Markets which may have an unfavorable impact on our stock price and liquidity, and our stock
price may fluctuate significantly;
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Sales of substantial amounts of our common stock by the Selling Securityholders, or the perception that these sales could occur, could
adversely affect the price of our securities; and
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We may not achieve the intended benefits of our recent acquisition of Stadco, the acquisition may disrupt our current plans or operations
and we expect to incur substantial expenses in connection with Stadco’s integration.
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Corporate Information
Our
executive offices are located at 1 Bella Drive, Westminster, Massachusetts 01473, and our telephone number is (978) 874-0591. Our website
is www.techprecision.com. Information on our website, or any other website, is not incorporated by reference in this prospectus. We
have included our website address in this prospectus solely as an inactive textual reference.
THE OFFERING
Shares of Common Stock that may be offered and sold from time to time by the Selling Securityholders named herein
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Up to 3,902,727 shares of common stock consisting of (i) up to 3,202,727 shares of our common stock that were issued to the PIPE Investors in a private placement in connection with the closing of the Acquisition, (ii) up to 600,000 shares of our common stock that were issued to a certain former securityholder of Stadco, a wholly owned subsidiary of ours, at the closing of the Acquisition and (iii) up to 100,000 shares of our common stock issuable upon the exercise of the Acquisition Warrants originally issued in connection with the Acquisition.
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Shares of common stock outstanding
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34,287,450 shares of Common
Stock as of December 31, 2021.
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Shares of common stock outstanding assuming exercise of all Acquisition Warrants
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34,387,450 shares (based on 34,287,450 shares outstanding as of December 31, 2021)
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Use of proceeds
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All of the shares of common stock offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts. We will not receive any of the proceeds from these sales. However, we will receive proceeds from the exercise of the Acquisition Warrants, if exercised on a cash basis, which proceeds we intend to use for general corporate purposes.
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Plan of distribution
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The Selling Securityholders and any of their permitted transferees may offer, sell or distribute all or a portion of the securities covered by this prospectus in a number of different ways and at varying prices. Our registration of the resale of the securities covered by this prospectus does not mean that the Selling Securityholders will offer or sell any of the securities. See “Plan of Distribution.”
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Market for our common stock
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Our common stock is quoted for trading under the symbol “TPCS” on the OTCQB Venture Market.
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Risk factors
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Any investment in the Common Stock offered hereby is speculative and involves a high degree of risk. You should carefully consider the information set forth under “Risk Factors” in this prospectus.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains predictive or “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of
current or historical fact contained in this prospectus, including statements that express our intentions, plans, objectives, beliefs,
expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions are
forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,”
“should,” “would” and similar expressions, as they relate to us, are intended to identify forward-looking statements.
These statements are based on current expectations,
estimates and projections made by management about our business, our industry and other conditions affecting our financial condition,
results of operations or business prospects. 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 differ materially from what is expressed or
forecasted in, or implied by, the forward-looking statements due to numerous risks and uncertainties. Factors that could cause such outcomes
and results to differ include, but are not limited to, risks and uncertainties arising from:
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our reliance on individual purchase orders, rather than long-term contracts, to generate revenue;
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our ability to balance the composition of our revenues and effectively control operating expenses;
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external factors, including the COVID-19 pandemic, that may be outside of our control;
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the impacts of the COVID-19 pandemic and government-imposed lockdowns in response thereto;
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the availability of appropriate financing facilities impacting our operations, financial condition and/or liquidity;
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our ability to receive contract awards through competitive bidding processes;
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our ability to maintain standards to enable us to manufacture products to exacting specifications;
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our ability to enter new markets for our services;
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our reliance on a small number of customers for a significant percentage of our business;
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competitive pressures in the markets we serve;
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changes in the availability or cost of raw materials and energy for our production facilities;
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restrictions in our ability to operate our business due to our outstanding indebtedness;
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government regulations and requirements;
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pricing and business development difficulties;
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changes in government spending on national defense;
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our ability to make acquisitions and successfully integrate acquisitions with our business;
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general industry and market conditions and growth rates;
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unexpected costs, charges or expenses resulting from the recently completed acquisition of Stadco; and
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those risks discussed in “Risk Factors” elsewhere in this prospectus, as well as those described in any other filings
which we make with the SEC.
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Any forward-looking statements speak only
as of the date on which they are made, and 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 prospectus, except as required by applicable law. Investors should evaluate
any statements made by us in light of these important factors.
MARKET AND INDUSTRY DATA AND FORECASTS
We obtained the industry and market data used throughout this prospectus
from our own internal estimates and research, as well as from independent market research, industry and general publications and surveys,
governmental agencies, publicly available information and research, surveys and studies conducted by third parties. Internal estimates
are derived from publicly available information released by industry analysts and third-party sources, our internal research and our industry
experience, and are based on assumptions made by us based on such data and our knowledge of our industry and market, which we believe
to be reasonable. In some cases, we do not expressly refer to the sources from which this data is derived. In addition, while we believe
the industry and market data included in this prospectus is reliable and based on reasonable assumptions, such data involve material risks
and other uncertainties and are subject to change based on various factors, including those discussed in the section titled “Risk
Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by the
independent parties or by us.
RISK FACTORS
Our
business, results of operations and financial condition and the industry in which we operate are subject to various risks. Accordingly,
investing in our securities involves a high degree of risk. We have listed below (not necessarily in order of importance
or probability of occurrence) the most significant risk factors applicable to us, but they do not constitute all of the risks that may
be applicable to us. New risks may emerge from time to time, and it is not possible for us to predict all potential risks or to assess
the likely impact of all risks. Before making an investment decision, you should carefully consider these risks as well as other information
we include or incorporate by reference in this prospectus and any prospectus supplement. This prospectus also contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking
statements as a result of a number of factors, including the risks described below. See the section titled “Cautionary Note Regarding
Forward-Looking Statements.”
Risks Related to Our Business and Industry
We face strong competition in our markets.
We face competition from both domestic and foreign manufacturers in
each of the markets we serve. No one company dominates the industry in which we operate. Our competitors include
international, national, and local manufacturers, some of whom may have greater financial, manufacturing, marketing and technical resources
than we do, or greater penetration in or familiarity with a particular geographic market than we have.
Some competitors may be better known or have greater resources at their
disposal, and some may have lower production costs. For certain products, being a domestic manufacturer may play a role in
determining whether we are awarded a certain contract. For other products, we may be competing against foreign manufacturers
who have a lower cost of production. If a contracting party has a relationship with a vendor and is required to place a contract
for bids, the preferred vendor may provide or assist in the development of the specification for the product which may be tailored to
that vendor’s products. In such event, we would be at a disadvantage in seeking to obtain that contract. We
believe that customers focus on such factors as quality of work, reputation of the vendor, perception of the vendor’s ability to
meet the required schedule, and price in selecting a vendor for their products. Some of our customers have moved manufacturing
operations or product sourcing overseas, which can negatively impact our sales. To remain competitive, we will need to invest
continuously in our manufacturing capabilities and customer service, and we may need to reduce our prices, particularly with respect to
customers in industries that are experiencing downturns, which may adversely affect our results of operations. We cannot provide
assurance that we will be able to maintain our competitive position in each of the markets that we serve.
Because most of our contracts are individual purchase orders and
not long-term agreements, there is no guarantee that we will be able to generate a similar amount of revenue in the future.
We must bid or negotiate each of our contracts separately, and when
we complete a contract, there is generally no continuing source of revenue under that contract. As a result, we cannot assure
you that we will have a continuing stream of revenue from any contract. Our failure to generate new business on an ongoing
basis would materially impair our ability to operate profitably. Additionally, our reliance on individual purchase orders has
historically caused, and may in future periods cause, our results of operations and cash flows to vary considerably and unpredictably
from period to period. Because a significant portion of our revenue is derived from services rendered for the defense, aerospace, nuclear,
large medical device and precision industrial markets, our operating results may suffer from conditions affecting these industries, including
any budgeting, economic or other trends that have the effect of reducing the requirements for our services. The COVID-19 pandemic may
also reduce demand for our products and services as a result of delays or disruptions in our customers’ ability to continue their
own production, including due to supply chain issues, shutdowns of our customers’ facilities and the continuation of remote work
by our customers, which may result in slowed responses and resolutions to production issues.
Our business may be impacted by external factors that we may not
be able to control, including the COVID-19 pandemic.
War, civil conflict, terrorism, natural disasters and public health
issues including domestic or international pandemics, have caused and could cause damage or disruption to domestic or international commerce
by creating economic or political uncertainties. Additionally, the volatility in the financial markets and disruptions or downturns
in other areas of the global or U.S. economies could negatively impact our business. These events could result in a decrease
in demand for our products, make it difficult or impossible to deliver orders to customers or receive materials from suppliers, affect
the availability or pricing of energy sources or result in other severe consequences that may or may not be predictable. As
a result, our business, financial condition and results of operations could be materially adversely affected.
At the beginning of calendar year 2020, the COVID-19 pandemic began
to adversely affect our business and operations. The effects of the continuing pandemic and related governmental responses have included,
and could in future periods include, extended disruptions to supply chains and capital markets, reduced labor availability and productivity
and a prolonged reduction in demand for our services and overall global economic activity. In this connection, the United States Government
declared a national emergency and various state governments imposed various “lockdown” and “shelter-in-place”
orders as a result of the COVID-19 pandemic, including the government of the Commonwealth of Massachusetts. The Company was designated
as a provider of a “COVID-19 Essential Service” under the emergency order in Massachusetts and, accordingly, continued its
operations during the pendency of the order, which was rescinded on May 18, 2021. However, the full extent of the COVID-19 pandemic,
related business and travel restrictions and changes to social behavior remain uncertain as the health crisis continues to evolve globally.
Management has been closely monitoring the impact that the COVID-19 pandemic is having on the Company. During the fiscal year ended March 31,
2021, and continuing into the current fiscal year, the COVID-19 pandemic negatively affected the Company’s customers, suppliers
and labor force. Customer impacts have included certain customers halting operations entirely for a period of time, shifting to remote
work, and suspending on-site inspections – which delays customer acceptance of completed work, customer payment of milestone payments
to us, and delivery of finished goods. Although these issues have abated somewhat since the commencement of vaccination efforts, the Company
believes that the potential exists for other customer shutdowns or slow-downs. Supplier impacts have included difficulties experienced
by the Company in ordering certain essential supplies. Labor impacts have included a few issues related to employee attendance such as
voluntary avoidance of work out of fear of contracting the coronavirus, certain employees becoming ill, and others self-quarantining as
a result of potential exposure to other individuals with symptoms of COVID-19, as well as increased difficulties in attracting and retaining
skilled employees. To date, this has had a minor impact on the Company’s production levels, however, if more employees become ill
in the future, the Company could experience more significant disruptions, which could have a material adverse effect on our results of
operations, financial condition and cash flows.
However, given the speed and frequency of continuously evolving developments
with respect to this pandemic, the extent to which COVID-19 may adversely impact our business depends on future developments, which are
highly uncertain and unpredictable, including new information concerning the severity of the outbreak and the effectiveness of actions
globally to contain or mitigate its effects. As a result, we cannot reasonably estimate the magnitude of the impact on our financial condition
and results of operations for future periods.
Because of our dependence on a limited number of customers, our
failure to generate major contracts from a small number of customers may impair our ability to operate profitably.
We have, in the past, 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. For the year
ended March 31, 2021 our three largest customers accounted for approximately 49% of our revenue. For the year ended March 31,
2020, our three largest customers accounted for approximately 52% of our revenue. In addition, our backlog at March 31, 2021 was
$18.6 million, of which 80% was attributable to three customers.
As a result, we may have difficulty operating profitably if there is
a default in payment by any of our major customers, we lose an existing order, or we are unable to generate orders from new or existing
customers. Furthermore, to the extent that any one customer accounts for a large percentage of our revenue, the loss of that
customer could materially affect our ability to operate profitably. For example, one customer in the fiscal years ended March 31,
2021 and 2020 accounted for 17% and 22% of our revenue, respectively. Our largest single customer during the six months ended September 30,
2021 was a prime defense contractor and accounted for 30% and 13% of our net sales during the six months ended September 30, 2021
and 2020, respectively. The loss of these customers could have a material adverse effect upon our business and may impair our ability
to operate profitably. We anticipate that our dependence on a limited number of customers in any given fiscal year will continue for the
foreseeable future. There is always a risk that existing customers will elect not to do business with us in the future or will experience
financial difficulties. If our customers experience financial difficulties or business reversals, or lose orders or anticipated
orders, which would reduce or eliminate the need for the products which they ordered from us, they could be unable or unwilling to fulfill
their contracts with us.
There is also a risk that our customers will attempt to impose new
or additional requirements on us that reduce the profitability of the orders placed by those customers with us. Further, even
if the orders are not changed, these orders may not generate margins equal to our recent historical or targeted results. If
we do not book more orders with existing customers, or develop relationships with new customers, we may not be able to increase, or even
maintain, our revenue, and our financial condition, results of operations, business and/or prospects may be materially adversely affected.
Our backlog figures may not accurately predict future sales or recognizable
revenue.
We expect to fill most items of backlog within the next three years.
However, because orders may be rescheduled or canceled and a significant portion of our net sales is derived from a small number of customers,
backlog is not necessarily indicative of future sales levels. Moreover, we cannot be sure of when during the future 36-month period we
will be able to recognize revenue corresponding to our backlog nor can we be certain that revenues corresponding to our backlog will not
fall into periods beyond the 36-month horizon.
Any decrease in the availability, or increase in the cost, of raw
materials could materially affect our earnings.
The availability of certain critical raw materials, such as steel,
nickel, invar, monel, inconel, aluminum, stainless steel, and other alloys, is subject to factors that are not within our control. At
any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis, at prices and other terms
acceptable to us, or at all.
If suppliers increase the price of critical raw materials or are unwilling
or unable to meet our demand, we may not have alternative sources of supply. In addition, to the extent that we have existing
contracts or have quoted prices to customers and accepted customer orders for products prior to purchasing the necessary raw materials,
we may be unable to raise the price of products to cover all or part of the increased cost of the raw materials.
The manufacture of some of our products is a complex process and requires
long lead times. As a result, we may experience delays or shortages in the supply of raw materials, including delays or shortages caused
by the COVID-19 pandemic and the government-imposed lockdowns. If we are unable to obtain adequate and timely deliveries of required
raw materials, we may be unable to timely manufacture sufficient quantities of products. This could cause us to lose sales,
incur additional costs, delay new product introductions or suffer harm to our reputation.
In addition, costs of certain critical raw materials have been volatile
due to factors beyond our control. Raw material costs are included in our contracts with customers, but in some cases we are
exposed to changes in raw material costs from the time purchase orders are placed to when we purchase the raw materials for production. Changes
in business conditions could adversely affect our ability to recover rapid increases in raw material costs and may adversely affect our
results of operations.
Additionally, changes in international trade duties and other aspects
of international trade policy, both in the U.S. and abroad, could materially impact the cost of raw materials. For example, in March 2018,
the U.S. imposed an additional 25% tariff under Section 232 of the Trade Expansion Act of 1962, as amended, on steel products imported
into the U.S. The tariff has been imposed on all steel imports, although imports from certain countries were initially excluded, the tariffs
on steel and aluminum imports from Mexico and Canada have been lifted and the tariffs on steel and aluminum tariffs imports from Europe
have been partially lifted and replaced with a quota system. The U.S. also imposed a 10% tariff on all aluminum imports into the United
States, with initial exemptions for aluminum imported from certain U.S. trading partners. Such actions could increase steel and aluminum
costs and decrease supply availability. Any increase in steel and/or aluminum prices that is not offset by an increase in our prices could
have an adverse effect on our business, financial position, results of operations or cash flows. In addition, if we are unable to acquire
timely steel or aluminum supplies, we may need to decline bid and order opportunities, which could also have an adverse effect on our
business, financial position, results of operations or cash flows.
Our manufacturing processes are complex, must constantly be upgraded
to remain competitive and depend upon critical, high cost equipment that may require costly repair or replacement.
It is possible that we could experience prolonged periods of reduced
production due to unplanned equipment failures, and we could incur significant repair or replacement costs in the event of those failures.
We must make regular capital investments and changes to our manufacturing
processes to lower production costs, improve productivity, manufacture new or improved products and remain competitive. We
may not be in a position to take advantage of business opportunities or respond to competitive pressures if we fail to update, replace
or make additions to our equipment or our manufacturing processes in a timely manner. The cost to repair or replace much of
our equipment or facilities could be significant. We cannot be certain that we will have sufficient internally generated cash
or acceptable external financing to make necessary capital expenditures in the future.
Our production facilities are energy-intensive and we rely on third
parties to supply energy consumed at our production facilities.
The prices for and availability of electricity, natural gas, oil and
other energy resources are subject to volatile market conditions, some of which have materially worsened as a result of recent shortages
and price increases for energy in some markets. These market conditions often are affected by political and economic factors
beyond our control. Disruptions or lack of availability in the supply of energy resources could temporarily impair our ability
to operate our production facility. Further, increases in energy costs, or changes in costs relative to energy costs paid by
competitors, may adversely affect our profitability. To the extent that these uncertainties cause suppliers and customers to
be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition.
The dangers inherent in our operations and the limits on insurance
coverage could expose us to potentially significant liability costs and materially interfere with the performance of our operations.
The fabrication of large steel structures involves potential operating
hazards that can cause personal injury or loss of life, severe damage to and destruction of property and equipment and suspension of operations.
The failure of such structures during and after installation can result in similar injuries and damages. Although we believe that our
insurance coverage is adequate, there can be no assurance that we will be able to maintain adequate insurance in the future at rates we
consider reasonable or that our insurance coverage will be adequate to cover future claims that may arise. Claims for which we are not
fully insured may adversely affect our working capital and profitability. In addition, changes in the insurance industry have generally
led to higher insurance costs and decreased availability of coverage. The availability of insurance that covers risks we and our competitors
typically insure against may decrease, and the insurance that we are able to obtain may have higher deductibles, higher premiums and more
restrictive policy terms.
Our operating results may fluctuate significantly from quarter to
quarter, and we cannot be certain that we will maintain profitability in every quarterly reporting period.
Our operating results historically have been difficult to predict and
have at times significantly fluctuated from quarter to quarter due to a variety of factors, many of which are outside of our control.
As a result of these factors, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely
on our past results as an indication of our future performance. Our operating expenses do not always vary directly with revenue and may
be difficult to adjust in the short term. As a result, if revenue for a particular quarter is below our expectations, we may not be able
to proportionately reduce operating expenses for that quarter, and therefore such a revenue shortfall would have a disproportionate effect
on our operating results for that quarter.
Demand in our end-use markets can be cyclical, impacting the demand
for the products we produce.
Demand in our end-use markets, including companies in the defense,
aerospace, precision industrial, and nuclear industries, can be cyclical in nature and sensitive to general economic conditions, competitive
influences and fluctuations in inventory levels throughout the supply chain. Our sales are sensitive to the market conditions
present in the industries in which the ultimate consumers of our products operate, which in some cases have been highly cyclical and subject
to substantial downturns.
As a result of the cyclical nature of these markets, we have experienced,
and in the future we may experience, significant fluctuations in our sales and results of operations with respect to a substantial portion
of our total product offering, and such fluctuations could be material and adverse to our overall financial condition, results of operations
and liquidity.
We could be adversely affected by reductions in defense spending.
Because certain of our products are used in a variety of military applications,
including ships, submarines and helicopters, we derive a significant portion of our revenue from the defense industry. In fiscal 2021,
approximately 81% of our revenue was derived from customers in the defense industry. Although many of the programs under which we sell
products to prime U.S. government contractors extend several years, they are subject to annual funding through congressional appropriations.
While spending authorizations for defense-related programs by the U.S. government have increased in recent years due to greater homeland
security and foreign military commitments, these spending levels may not be sustainable and could significantly decline. Future levels
of expenditures, authorizations, and appropriations for programs we support may decrease or shift to programs in areas where we do not
currently provide services. Changes in spending authorizations, appropriations, and budgetary priorities could also occur due to a shift
in the number, and intensity, of potential and ongoing conflicts, the rapid growth of the federal budget deficit, increasing political
pressure to reduce overall levels of government spending, shifts in spending priorities from national defense as a result of competing
demands for federal funds, or other factors. The COVID-19 pandemic, the government-imposed lockdowns and the economic dislocation therefrom
may also lead to declines in governmental defense spending if national priorities shift from national defense to healthcare policy and
economic recovery. Our business prospects, financial condition or operating results could be materially harmed among other causes by the
following: 1) budgetary constraints affecting U.S. government spending generally, or specific departments or agencies in particular, and
changes in available funding, such as federal government sequestration (automatic spending cuts); 2) changes in U.S. government programs
or requirements; and 3) a prolonged U.S. government shutdown and other potential delays in the appropriations process.
Failure to obtain and retain skilled technical personnel could adversely
affect our operations.
Our production facilities require skilled personnel to operate and
provide technical services and support for our business. Competition for the personnel required for our business intensifies as activity
increases. Starting in fiscal year 2021 and continuing into the fiscal year ending March 31, 2022, we have been experiencing significantly
more difficulty in attracting and retaining employees and pressure to increase certain of our employees’ wages. In periods of high
utilization, it may become more difficult to find and retain qualified individuals, and there can be no assurance that we will be successful
in attracting and retaining qualified personnel to fulfill our current or future needs. This could increase our costs or have other adverse
effects on our results of operations.
The extensive environmental, health and safety regulatory regimes
applicable to our manufacturing operations create potential exposure to significant liabilities.
The nature of our manufacturing business subjects our operations to
numerous and varied federal, state, local and international laws and regulations relating to pollution, protection of public health and
the environment, natural resource damages and occupational safety and health. Failure to comply with these laws and regulations,
or with the permits required for our operations, could result in fines or civil or criminal sanctions, third party claims for property
damage or personal injury, and investigation and cleanup costs. Potentially significant expenditures could be required in order
to comply with environmental laws that may be adopted or imposed in the future.
We have used, and currently use, certain substances that are considered
hazardous, extremely hazardous or toxic under worker safety and health laws and regulations. Although we implement controls
and procedures designed to reduce continuing risk of adverse impacts and health and safety issues, we could incur substantial cleanup
costs, fines and civil or criminal sanctions, and third party property damage or personal injury claims as a result of violations, non-compliance
or liabilities under these regulatory regimes.
As a manufacturing business, we also must comply with federal and state
environmental laws and regulations which relate to the manner in which we store and dispose of materials and the reports that we are required
to file. We cannot assure you that we will not incur additional costs to maintain compliance with environmental laws and regulations
or that we will not incur significant penalties for failure to be in compliance.
Our systems and information technology infrastructure may be subject
to security breaches and other cybersecurity incidents.
We rely on the accuracy, capacity, and security of our information
technology systems to obtain, process, analyze, and manage data, as well as to facilitate the manufacture and distribution of products
to and from our facility. We receive, process and ship orders, manage the billing of and collections from our customers, and manage the
accounting for and payment to our vendors. Maintaining the security of computers, computer networks, and data storage resources is a critical
issue for us and our customers, as security breaches could result in vulnerabilities and loss of and/or unauthorized access to confidential
information. We may face attempts by experienced hackers, cybercriminals, or others with authorized access to our systems to misappropriate
our proprietary information and technology, interrupt our business, and/or gain unauthorized access to confidential information. The reliability
and security of our information technology infrastructure and software, and our ability to expand and continually update technologies
in response to our changing needs is critical to our business. To the extent that any disruptions or security breaches result in a loss
or damage to our data, it could cause harm to our reputation. This could lead some customers to stop using us for building their products
and reduce or delay future purchases of our products or use competing products. In addition, we could face enforcement actions by U.S.
states, the U.S. federal government, or foreign governments, which could result in fines, penalties, and/or other liabilities and which
may cause us to incur legal fees and costs, and/or additional costs associated with responding to the cyberattack. Increased regulation
regarding cybersecurity may increase our costs of compliance, including fines and penalties, as well as costs of cybersecurity audits.
Any of these actions could materially adversely impact our business and results of operations.
We are subject to regulations related to conflict minerals which
could adversely impact our business.
We are subject to SEC rules regarding disclosure of the use of
tin, tantalum, tungsten, gold and certain other minerals, known as conflict minerals, in products manufactured by public companies. These
rules require that public companies conduct due diligence to determine whether such minerals originated from the Democratic Republic
of Congo, or the DRC, or an adjoining country and whether such minerals helped finance the armed conflict in the DRC. These rules require
ongoing due diligence efforts, along with annual conflict minerals reports. There are costs associated with complying with these disclosure
requirements, including costs to determine the origin of conflict minerals used in our products.
In addition, these rules could adversely affect the sourcing,
supply and pricing of materials used in our products. As there may be only a limited number of suppliers offering conflict-free minerals,
we cannot be sure that we will be able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at competitive
prices. Also, we may face reputational challenges if the due diligence procedures we implement do not enable us to verify the origins
for all conflict minerals or to determine that such minerals are DRC conflict-free. We may also encounter challenges to satisfy customers
that may require all of the components of products purchased to be certified as DRC conflict-free because our supply chain is complex.
If we are not able to meet customer requirements, customers may choose to disqualify us as a supplier.
We currently do not use any conflict minerals in the production of
our products, but from time to time we may receive a customer order necessitating the use of conflict minerals. In the event we produce
any products utilizing conflict minerals, we will be required to comply with the rules discussed above.
Changes in delivery schedules and order specifications may affect
our revenue stream.
Although we perform manufacturing services pursuant to orders placed
by our customers, we have in the past experienced delays in scheduling and changes in the specification of our products. Delays
in scheduling have been and in the future may be caused by disruptions relating to the COVID-19 pandemic, government-imposed lockdowns
and supply chain issues, while changes in order specifications may result from a number of factors, including a determination by the
customer that the product specifications need to be changed after receipt of an initial product or prototype. As a result
of these changes, we may suffer a delay in the recognition of revenue from projects and may incur contract losses. We cannot
assure you that our results of operations will not be affected in the future by delays or changes in specifications or that we will ever
be able to recoup revenue which was lost as a result of the delays or changes. Further, if we cannot allocate our personnel
to a different project, we will continue to incur expenses relating to the initial project, including labor and overhead. Thus,
if orders are postponed, our results of operations would be impacted by our need to maintain staffing and other expense-generating aspects
of production for the postponed projects, even though they were not fully utilized, and revenue associated with the project will not
be recognized, during this period. We cannot assure that our operating results will not decline in future periods as a result
of changes in customers’ orders.
Negative economic conditions may adversely impact the demand for
our services and the ability of our customers to meet their obligations to us on a timely basis. Any disputes with customers could
also have an adverse impact on our income and cash flows.
Negative economic conditions, including tightening of credit in financial
markets may lead businesses to postpone spending, which may impact our customers, causing them to cancel, decrease or delay their existing
and future orders with us. Declines in economic conditions may further impact the ability of our customers to meet their
obligations to us on a timely basis. If customers are unable to meet their obligations to us on a timely basis, it could adversely
impact the realization of receivables, the valuation of inventories and the valuation of long-lived assets. Additionally, we
may be negatively affected by contractual disputes with customers, which could have an adverse impact on our income and cash flows.
If our customers successfully assert product liability claims against
us due to defects in our products, our operating results may suffer and our reputation may be harmed.
Due to the circumstances under which many of our products are used
and the fact that some of our products are relied upon by our customers in their facilities or operations, we face an inherent risk of
exposure to claims in the event that the failure, use or misuse of our products results, or is alleged to result, in bodily injury, property
damage or economic loss. We have been subject to product liability claims in the past, and we may be subject to claims in the future.
A successful product liability claim or series of claims against us, or a significant warranty claim or series of claims against us could
materially decrease our liquidity and impair our financial condition and also materially and adversely affect our results of operations.
We maintain a substantial amount of outstanding indebtedness, which
could impair our ability to operate our business and react to changes in our business, remain in compliance with debt covenants and make
payments on our debt.
As of September 30, 2021, we had indebtedness consisting of approximately
$0.9 million outstanding under our revolving line of credit loan, $2.4 million under the term loan made to Ranor and approximately $4
million under the term loan made to Stadco. Our level of indebtedness could have important consequences, including, without limitation:
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increasing our vulnerability to general economic and industry conditions because our debt payment obligations may limit our ability
to use our cash to respond to or defend against changes in the industry or the economy;
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requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness,
therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;
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limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions
and general corporate or other purposes;
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limiting our ability to pursue our growth strategy, including restricting us from making strategic acquisitions or causing us to make
non-strategic divestitures;
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placing us at a disadvantage compared to our competitors who are less leveraged and may be better able to use their cash flow to fund
competitive responses to changing industry, market or economic conditions; and
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making us more vulnerable in the event of a downturn in our business, our industry or the economy in general.
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In addition, our current credit facilities contain, and any future
credit facilities will likely contain, covenants and other provisions that restrict our operations. These restrictive covenants and provisions
could limit our ability to obtain future financings, make needed capital expenditures, withstand a future downturn in our business, or
the economy in general, or otherwise conduct necessary corporate activities, and may prevent us from taking advantage of business opportunities
that arise in the future.
If we refinance our credit facilities, we cannot guarantee that any
new credit facility will not contain similar covenants and restrictions.
Our liquidity is highly dependent on our available financing facilities
and ability to improve our gross profit and operating income. Our failure to obtain new or additional financing, if required, could impair
our ability to both serve our existing customer base and develop new customers and could result in our failure to continue to operate
as a going concern. To the extent that we require new or additional financing, we cannot assure you that we will be able to get such financing
on terms equal to or better than the terms of our credit facilities with Berkshire Bank. If we are unable to borrow funds under an existing
credit facility, it may be necessary for us to conduct an offering of debt and/or equity securities on terms which may be disadvantageous
to us or have a negative impact on our outstanding securities and the holders of such securities. In the event of an equity offering,
it may be necessary that we offer such securities at a price that is significantly below our current trading levels which may result in
substantial dilution to our investors that do not participate in the offering and a new low trading level for our common stock.
We may need new or additional financing in the future to expand
our business or refinance existing indebtedness, and our inability to obtain capital on satisfactory terms or at all may have an adverse
impact on our operations and our financial results.
We may need new or additional financing in the future to expand our
business, refinance existing indebtedness or make strategic acquisitions, and our inability to obtain capital on satisfactory terms or
at all may have an adverse impact on our operations and our financial results. As we grow our business, we may have to incur significant
capital expenditures. We may make capital investments to, among other things, build new or upgrade our existing facilities, purchase or
lease new equipment and enhance our production processes. If we are unable to access capital on satisfactory terms and conditions, we
may not be able to expand our business or meet our payment requirements under our existing credit facilities. Our ability to obtain new
or additional financing will depend on a variety of factors, many of which are beyond our control. We may not be able to obtain new or
additional financing because we may have substantial debt, our current receivable and inventory balances may not support additional debt
availability or because we may not have sufficient cash flows to service or repay our existing or future debt. In addition, depending
on market conditions and our financial performance, equity financing may not be available on satisfactory terms or at all. Moreover, if
we raise additional funds through issuances of equity or convertible debt securities, our current stockholders could suffer significant
dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common
stock. If we are unable to access capital on satisfactory terms and conditions, this could have an adverse impact on our business, results
of operations and financial condition.
Any deterioration or disruption of the credit and capital markets
may adversely affect our access to sources of funding.
Disruptions in the credit markets have in the past severely restricted
access to capital for companies. When credit markets deteriorate or are disrupted, our ability to incur additional indebtedness to fund
a portion of our working capital needs and other general corporate purposes, or to refinance maturing obligations as they become due,
may be constrained. This risk could be exacerbated by future deterioration in the Company’s credit ratings. In addition, if the
counterparty backing our existing credit facilities were unable to perform on its commitments, our liquidity could be impacted, which
could adversely affect funding of working capital requirements and other general corporate purposes. In the event that we need to access
the capital markets or other sources of financing, there can be no assurance that we will be able to obtain financing on acceptable terms
or within an acceptable time, if at all. In addition, the COVID-19 pandemic has significantly disrupted world financial markets,
increased volatility in U.S. capital markets, and may reduce opportunities for us to seek additional funding. Our inability to obtain
financing on terms and within a time acceptable to us could have an adverse impact on our results of operations, financial condition,
and liquidity.
Risks Related to our Common Stock
Our common stock is quoted on the OTC Markets which may have an
unfavorable impact on our stock price and liquidity.
Our common stock is quoted on the OTC Markets Group Inc.’s OTCQB
Venture Market. The OTCQB Venture Market is a significantly more limited market than the New York Stock Exchange or NASDAQ. The quotation
of our shares on the OTCQB Venture Market may result in a less liquid market available for existing and potential stockholders to trade
shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability
to raise capital in the future on favorable terms, or at all.
Our stock price may fluctuate significantly.
The stock market can experience significant volatility, and the volatility
of stocks often does not relate to the operating performance of the companies represented by the stock. The market price of
our common stock could be subject to significant fluctuations because of general market conditions and because of factors specifically
related to our businesses.
Factors that could cause volatility in the market price of our common
stock include market conditions affecting our customers’ businesses, including the level of mergers and acquisitions activity, anticipated
changes in spending on national defense by the U.S. Government, and actual and anticipated fluctuations in our quarterly operating results,
rumors relating to us or our competitors, actions of stockholders, including sales of shares by our directors and executive officers,
additions or departures of key personnel, and developments concerning current or future strategic alliances or acquisitions. Volatility
in our stock price may also be enhanced by the fact that our common stock is often thinly traded. Additionally, the economic and other
consequences of the COVID-19 pandemic have resulted in significant volatility in the equity capital markets as the economy begins to recover.
These and other factors may cause the market price and demand for our
common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock at a profit
and may otherwise negatively affect the liquidity of our common stock. In addition, in the past, when the market price of a
stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the
stock. If any of our stockholders brought a lawsuit against us, even if the lawsuit is without merit, we could incur substantial
costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management.
The issuance of shares of our common stock as compensation may dilute
the value of existing stockholders and may affect the market price of our stock.
We may use, and have in the past used, stock options, stock grants
and other equity-based incentives to provide motivation and compensation to our directors, officers, employees and key independent consultants. The
award of any such incentives will result in immediate and potentially substantial dilution to our existing stockholders and could result
in a decline in the value of our stock price. The exercise of these options and the sale of stock issued upon such exercise
or pursuant to stock grants may have an adverse effect upon the price of our stock.
The number of shares of common stock being registered for sale is
significant in relation to the number of our outstanding shares of common stock.
We have filed a Registration Statement of which this prospectus is
a part to register the resale of shares of our common stock into the public market by the Selling Securityholders. These shares represent
a significant number of shares of our total number of issued and outstanding shares of common stock, and if sold in the market all at
once or in a short period of time, could depress the market price of our Common Stock during the period the Registration Statement remains
effective.
Sales of substantial amounts of our common stock by the Selling
Securityholders, or the perception that these sales could occur, could adversely affect the price of our securities.
The sale by the Selling Securityholders of a significant number of
shares of our common stock, or the perception in the public markets that the Selling Securityholders may sell all or a portion of such
securities as a result of the registration of the resale of such shares hereunder, could have a material adverse effect on the market
price of our securities.
We will have broad discretion as to the use of the proceeds related
to this offering, and we may not use the proceeds effectively.
While we will not receive any proceeds from the sale of the shares
of common stock offered by this prospectus by the Selling Securityholders, we may receive cash proceeds from the cash exercise of the
Acquisition Warrants. In that case, we have considerable discretion in the application of the proceeds from such exercise. You will not
have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used in a manner agreeable to
you. You must rely on our judgment regarding the application of the net proceeds of the exercise of the Acquisition Warrants. The net
proceeds may be used for corporate purposes that do not improve our profitability or increase the price of our shares of common stock.
The net proceeds may also be placed in investments that do not produce income or that lose value. The failure to use such funds by us
effectively could have a material adverse effect on our business, financial condition, operating results and cash flow.
Trading volume of our common stock has fluctuated from time to time
and is typically low, which may make it difficult for investors to sell their shares at times and prices that investors feel are appropriate.
To date, the trading volume of our common stock has fluctuated, and
there is typically a low volume of trading in our common stock. Generally, lower trading volumes adversely affect the liquidity of our
common stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing
of transactions and reduction in security analysts’ and the media’s coverage of us. This may result in lower prices for our
common stock than might otherwise be obtained and could also result in a larger spread between the bid and asked prices for our common
stock.
Because of our cash requirements and restrictions in our debt agreements,
we may be unable to pay dividends.
In view of the cash requirements of our business, we expect to use
any cash flow generated by our business to finance our operations and growth and to service our indebtedness. Further, we are
subject to certain affirmative and negative covenants under our debt agreements that restrict our ability to declare or pay any dividend
or other distribution on equity, purchase or retire any equity, or alter our capital structure. Accordingly, we expect any return to stockholders
will be limited to the appreciation of the value of their holdings of our stock.
The rights of the holders of our common stock may be impaired by
the potential issuance of preferred stock.
Our certificate of incorporation gives our board of directors the right
to create new series of preferred stock. As a result, the board of directors may, without stockholder approval, issue preferred
stock with voting, dividend, conversion, liquidation or other rights that are superior to the rights associated with our common stock,
which could adversely affect the voting power and equity interest of the holders of our common stock. Preferred stock, which
could be issued with the right to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing
a change of control. The possible impact on takeover attempts could adversely affect the price of our common stock.
We are limited by our inability to use a short form registration
statement on Form S-3, which may affect our ability to access the capital markets, if needed.
A registration statement on Form S-3 permits an eligible issuer
to incorporate by reference its past and future filings and reports made under the Securities Exchange Act of 1934, as amended, or the
Exchange Act. In addition, Form S-3 enables eligible issuers to conduct primary offerings "off the shelf" under Rule 415
of the Securities Act of 1933, as amended, or the Securities Act. The shelf registration process under Form S-3 allows issuers to
avoid additional delays and interruptions in the offering process and to access the capital markets in a more expeditious and efficient
manner than raising capital in a standard offering on Form S-1.
For us to be eligible to use Form S-3 to conduct a
registered offering of our securities to investors, either (1) the aggregate market value of our common stock held by
non-affiliates would have to exceed $75 million or (2) our common stock would have to be listed and registered on a national
securities exchange. Currently, we do not meet either of those eligibility requirements and are therefore precluded from using a
Form S-3 in connection with a registered offering of our securities to investors. Additionally, we would need to be current in
our Exchange Act filings for the twelve months preceding the filing of a Form S-3.
Due to our present inability to use Form S-3, if we wanted to
conduct a registered offering of securities to investors, we will be required to use long-form registration on Form S-1 and may experience
delays. In addition, our ability to undertake certain types of financing transactions, such as at-the-market (ATM) offerings, may be limited
or unavailable to us without the ability to use Form S-3. Furthermore, because of the delay associated with long form registration
and the limitations on the financing transactions we may undertake, the terms of any financing transaction we are able to conduct may
not be advantageous to us or may cause us not to obtain capital in a timely fashion to execute our business strategies.
Risks Related to the Recently Completed Acquisition of Stadco
We may not achieve the intended benefits
of our recent acquisition of Stadco, and the acquisition may disrupt our current plans or operations.
We may not be able to successfully integrate
Stadco’s business and assets or otherwise realize the expected benefits of the transaction, including anticipated annual operating
cost and capital synergies to the extent currently anticipated, or at all. To realize these anticipated benefits, our business and Stadco’s
business must be successfully combined, which is subject to our ability to consolidate operations, corporate cultures and systems and
our ability to eliminate redundancies and costs. Difficulties in integrating Stadco into our operations may result in the combined company
performing differently than expected, in operational challenges or in the failure to realize anticipated synergies and efficiencies in
the expected time frame or at all. The integration of the two companies may result in material challenges, including the diversion of
management’s attention from ongoing business concerns; retaining key management and other employees; retaining existing business
and operational relationships, including customers and other counterparties, and attracting new business and operational relationships;
the possibility of faulty assumptions underlying expectations regarding the integration process and associated expenses; consolidating
corporate and administrative infrastructures and eliminating duplicative operations; coordinating geographically separate organizations;
difficulties in the assimilation of employees and corporate cultures; unanticipated issues in integrating information technology, communications
and other systems; as well as unforeseen expenses or delays associated with the acquisition. If we are not successful in integrating
Stadco’s business and assets or otherwise fail to realize the expected operating efficiencies, cost savings and other benefits currently
anticipated from the Stadco acquisition, our results of operations, cash flows and financial condition may be materially adversely affected.
We expected to incur substantial expenses
related to the integration of the business of Stadco and its affiliates with ours.
We expect to incur substantial expenses in
connection with the continued integration of our business with Stadco and its affiliates. There are a large number of processes, policies,
procedures, operations, technologies and systems that must be integrated, including purchasing, accounting and finance, sales, payroll,
pricing, revenue management, marketing and benefits. In addition, Ranor’s and Stadco’s businesses will continue to maintain
a presence in Westminster, Massachusetts and Los Angeles, California, respectively. We may also incur additional costs to attract, motivate
or retain management personnel and other key employees. We have incurred and will continue to incur acquisition fees and costs related
to formulating integration plans for the combined business, and the execution of these plans may lead to additional unanticipated costs.
Our stockholders may not realize a benefit
from the acquisition of Stadco commensurate with the ownership dilution they will experience in connection with the transaction.
If the combined company is unable to realize
the full strategic and financial benefits currently anticipated from the acquisition of Stadco and its affiliates, our stockholders will
have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part
of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently
anticipated from the acquisition.
General Risk Factors
If securities analysts do not publish research or reports about
our business, if they issue unfavorable commentary or downgrade their rating on our common stock, or if we fail to meet projections and
estimates of earnings developed by such analysts, the price of our common stock could decline.
The trading market for our common stock will rely in part on the research
and reports that securities analysts publish about us and our business. The price of our common stock could decline if one
or more analysts downgrade their rating on our common stock or if those analysts issue other unfavorable commentary or cease publishing
reports about us or our business. In addition, although we do not make projections relating to our future operating results, our operating
results may fall below the expectations of securities analysts and investors. In this event, the market price of our common
stock would likely be adversely affected.
If we fail to maintain effective internal controls over financial
reporting, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results,
our ability to operate our business and investors’ views of us.
We are subject to the Sarbanes-Oxley Act, which requires public companies
to include in their annual report a statement of management’s responsibilities for establishing and maintaining adequate internal
control over financial reporting, together with an assessment of the effectiveness of those internal controls. Ensuring that we have effective
internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis
is a costly and time-consuming effort that needs to be re-evaluated frequently. Our failure to maintain the effectiveness of our internal
controls in accordance with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business. We could
lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of
our common stock, and could result in us being the subject of regulatory scrutiny.
Laws and regulations governing international operations, including
the Foreign Corrupt Practices Act, or “FCPA,” may require us to develop and implement costly compliance programs and the failure
to comply with such laws may result in substantial penalties.
We must comply with laws and regulations relating to international
business operations. The creation and implementation of compliance programs for international business practices is costly
and such programs are difficult to enforce, particularly where reliance on third parties is required. Specifically, the Foreign Corrupt
Practices Act, or FCPA, prohibits any U.S. individual or business from paying, authorizing payment or offering anything of value, directly
or indirectly, to any foreign official, for the purpose of influencing any act or decision of the foreign official in order to assist
the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed
in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately
and fairly reflect all transactions of the company, including international subsidiaries, and to devise and maintain an adequate system
of internal accounting controls for international operations. The anti-bribery provisions of the FCPA are enforced primarily
by the U.S. Department of Justice.
Compliance with the FCPA is expensive and difficult, particularly in
countries in which corruption is a recognized problem. The failure to comply with laws governing international business practices
may result in substantial penalties, including suspension or debarment from government contracting. Violation of the FCPA can
result in significant civil and criminal penalties. Indictment alone under the FCPA can lead to suspension of the right to
do business with the U.S. government until the pending claims are resolved. Conviction of a violation of the FCPA can result
in long-term disqualification as a government contractor.
The termination of a government contract or customer relationship as
a result of our failure to satisfy any of our obligations under laws governing international business practices would have a negative
impact on our operations and harm our reputation and ability to procure government contracts. The SEC also may suspend or bar
issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions.
USE OF PROCEEDS
All of the shares of common stock offered by the
Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts. We will
not receive any of the proceeds from these sales. However, we will receive proceeds from the exercise of the Acquisition Warrants, if
exercised on a cash basis, which proceeds we intend to use for general corporate purposes.
DIVIDEND POLICY
We currently intend to retain all available funds
and any future earnings to fund the growth and development of our business. We have never declared or paid any cash dividends on our capital
stock. We do not intend to pay cash dividends on our common stock in the foreseeable future, and additionally, our credit facility with
Berkshire Bank restricts our ability to pay or declare any cash dividends or make other distributions to our stockholders in money or
property. Investors should not purchase our common stock with the expectation of receiving cash dividends.
Any future determination to declare dividends will
be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements,
general business conditions, and other factors that our board of directors may deem relevant.
DETERMINATION OF OFFERING PRICE
We cannot currently determine the price or prices
at which the shares of common stock may be sold by the Selling Securityholders under this prospectus.
BUSINESS
Our Business
We are a manufacturer of precision, large-scale
fabricated and machined metal structural components and systems. We offer a full range of services required to transform raw materials
into precision finished products. We sell these finished products to customers in two main industry groups: defense and precision industrial.
The finished products are used in a variety of markets including defense, aerospace, nuclear, medical and precision industrial. Our mission
is to be a leading end-to-end service provider to our customers by furnishing custom, fully integrated solutions for complete products
that require custom fabrication, precision machining, assembly, integration, inspection, non-destructive evaluation and testing.
We work with our customers to manufacture products
in accordance with the customers’ drawings and specifications. Our work complies with specific national and international codes
and standards applicable to our industry. We believe that we have earned our reputation through outstanding technical expertise, attention
to detail, and a total commitment to quality and excellence in customer service.
About Us
We are a Delaware corporation
organized in 2005 under the name Lounsberry Holdings II, Inc. On February 24, 2006, we acquired all of the issued and outstanding
capital stock of our wholly owned subsidiary Ranor. Ranor, together with its predecessors, has been in continuous operation since 1956.
From February 24, 2006 until the closing of the Acquisition, our primary business has been the business of Ranor. On March 6,
2006, following the acquisition of Ranor, we changed our corporate name to TechPrecision Corporation.
WCMC, a limited company organized under the laws
of the People’s Republic of China, located in Wuxi City, Jiangsu Province, China, was also one of our other wholly owned subsidiaries
until its dissolution and deregistration in November 2021. WCMC has had no operations or customers for over five years.
On August 25, 2021, the Company completed
its previously announced acquisition of Stadco, a company in the business of manufacturing high-precision parts, assemblies and tooling
for aerospace, defense, research and commercial customers pursuant to that certain stock purchase agreement with Stadco New Acquisition,
LLC, Stadco Acquisition, LLC, Stadco and each equity securityholder of Stadco Acquisition, LLC. On the closing date, pursuant to the stock
purchase agreement, and upon the terms and subject to the conditions therein, the Company, through Stadco New Acquisition, LLC, acquired
all of the issued and outstanding capital stock of Stadco from Stadco Acquisition, LLC in exchange for the issuance of 666,666 newly issued
shares of the Company’s common stock to Stadco Acquisition, LLC. As a result of the Acquisition, Stadco is now our wholly owned
indirect subsidiary.
Our executive offices are
located at 1 Bella Drive, Westminster, Massachusetts 01473, and our telephone number is (978) 874-0591. Our website is www.techprecision.com.
Information on our website, or any other website, is not incorporated by reference in this prospectus.
General
The manufacturing operations of our Ranor subsidiary
are situated on approximately 65 acres in North Central Massachusetts. Our 145,000 square foot facility houses state-of-the-art equipment
which gives us the capability to manufacture products as large as 100 tons. We offer a full range of services required to transform raw
material into precision finished products. Our manufacturing capabilities include: fabrication operations (cutting, press and roll forming,
assembly, welding, heat treating, blasting and painting) and machining operations including CNC (computer numerical controlled) horizontal
and vertical milling centers. We also provide support services to our manufacturing capabilities: manufacturing engineering (planning,
fixture and tooling development, and manufacturing), quality control (inspection and testing), materials procurement, production control
(scheduling, project management and expediting), and final assembly.
All manufacturing at Ranor’s facility is
done in accordance with our written quality assurance program, which meets specific national codes, and international codes, standards,
and specifications. The standards used for each customer project are specific to that customer’s needs, and we have implemented
such standards into our manufacturing operations.
The manufacturing operations of our Stadco subsidiary
are situated in an industrial warehouse and office location comprised of approximately 182,544 square feet in Los Angeles, California.
At this site, Stadco manufacturers large flight-critical components on several high-profile commercial and military aircraft programs,
including military helicopters. It has been a critical supplier to a blue-chip customer base that includes some of the largest OEMs and
prime contractors in the defense and aerospace industries. Stadco also provides tooling, customized molds, fixtures, jigs and dies used
in the production of aircraft components, and has one of the largest electron beam welding machines set up in the United States, allowing
it to weld thick pieces of titanium and other metals.
Products
We manufacture a wide variety of products pursuant
to customer contracts and based on individual customer needs. We can also provide manufacturing engineering services to assist customers
in optimizing their engineering designs for manufacturing efficiency. We do not design the products we manufacture, but rather manufacture
according to “build-to-print” requirements specified by our customers. Accordingly, we do not distribute the products that
we manufacture on the open market and we do not market any specific products on an on-going basis. We do not own the intellectual property
rights to any proprietary marketed product, and we do not manufacture products in anticipation of orders. Manufacturing operations do
not commence on any project before we receive a customer’s purchase order. We only enter into contracts that cover specific products
within the capability of our resources.
Although we seek continuous production programs
with predictable cost structures that provide long-term integrated solutions for our customers, our activities include a variety of both
custom-based and production-based requirements. The custom-based work is typically either a prototype or unique, one-of-a-kind product.
The production-based work is repeat work or a single product with multiple quantity releases.
Changes in market demand for our manufacturing
expertise can be significant and sudden and require us to be able to adapt to the collective needs of the customers and industries that
we serve. Understanding this dynamic, we believe we have developed the capability to transform our workforce to manufacture products
for customers across different industries.
We serve customers in the defense, aerospace, nuclear,
medical and precision industrial markets. Examples of products we have manufactured within such industries during recent years include,
but are not limited to, custom components for ships, submarines and helicopters, aerospace equipment, components for nuclear power plants
and components for large scale medical systems.
Coronavirus Disease (COVID-19) Pandemic Update
Beginning with the new calendar year 2020, the
novel strain of coronavirus known as COVID-19 spread worldwide, including to U.S jurisdictions where the Company does business, and became
a global pandemic. The United States Government declared a national emergency and various state governments imposed “lockdown”
and “shelter-in-place” orders intended to reduce the spread of COVID-19 that have severely restricted business, social activities
and travel. The Governor of the Commonwealth of Massachusetts, in which jurisdiction the Company’s manufacturing and executive offices
are located, issued an emergency order on March 31, 2020, updated on April 28, 2020, imposing such an emergency order. This
order was rescinded on May 15, 2020. As a designated “COVID-19 Essential Service” we continued our operations throughout
the pendency of the order.
The full extent of the COVID-19 pandemic, related
business and travel restrictions and changes to social behavior remain uncertain as the health crisis continues to evolve globally. Management
has been closely monitoring the impact that the COVID-19 pandemic is having on the Company and is taking reasonable precautions and following
state and federal guidelines to protect the health and welfare of our employees, so we can continue to perform and deliver the products
our customers need. During the fiscal year 2021, the COVID-19 pandemic impacted all of the Company’s customers, suppliers and labor
force. Management observed impacts from certain of its customers halting operations entirely for a period of time, shifting to remote
work, and suspending on-site inspections – which resulted in delays of customer acceptance of completed work, milestone payments
and the ultimate delivery of finished goods. While work restrictions have abated during the latter part of fiscal year 2021, the Company
believes that the potential exists for other customer slowdowns or shutdowns to occur.
During the fiscal year ended March 31, 2021,
with respect to suppliers, the Company experienced extended lead-times for delivery of certain critical supplies, and with respect to
the Company’s labor force, we experienced a few issues related to employee attendance such as voluntary avoidance of work out of
fear of contracting the coronavirus, certain employees becoming ill, and others self-quarantining as a result of potential exposure to
other individuals with symptoms of COVID-19. To date, including the first quarter of fiscal 2022, this has had a minor impact on the Company’s
production levels, however, if more employees become ill in the future, the Company could experience a more significant disruption.
In light of the foregoing uncertainty caused by
the COVID-19 pandemic, the Company determined it necessary to obtain additional funds. In this connection, as previously disclosed, on
May 8, 2020, the Company, through Ranor, issued a promissory note, or the “PPP Note,” evidencing an unsecured loan in
the amount of $1,317,100 made to Ranor under the Paycheck Protection Program, or the PPP. The PPP was established under the federal Coronavirus
Aid, Relief, and Economic Security Act, or CARES Act, and is administered by the U.S. Small Business Administration, or SBA. The loan
to Ranor was made through Berkshire Bank. The PPP Note provided for an interest rate of 1.00% per year and was to mature two years after
the issuance date. Principal and accrued interest were payable monthly in equal installments commencing on the date that was six months
after the date funds were first disbursed on the loan and continuing through the maturity date, unless the PPP Note is forgiven. To be
available for loan forgiveness, the PPP Note was to only be used for payroll costs, costs related to certain group health care benefits
and insurance premiums, rent payments, utility payments, mortgage interest payments and interest payments on any other debt obligation
that were incurred before February 15, 2020.
On June 5, 2020, the PPP was amended to give
borrowers more time to spend loan proceeds and request loan forgiveness. The amendments extended the length of the covered period as defined
in the CARES Act from eight to twenty-four weeks, while allowing borrowers that received PPP loans before June 5, 2020 to elect to
use the original eight-week covered period. In addition, the amendments provide that if the borrower does not apply for forgiveness of
a loan within ten months after the last day of the covered period, the PPP loan is no longer deferred and the borrower must begin paying
principal and interest. The Company applied for loan forgiveness within the ten month period on March 26, 2021.
On May 12, 2021, as authorized by Section 1106
of the CARES Act, the SBA has remitted to Berkshire Bank, the lender of record for the PPP loan, a payment of principal and interest in
the amounts of $1,317,000 and $13,207, respectively, for forgiveness of the Company’s PPP loan. The funds credited to the PPP loan
pay this loan off in full.
Given the speed and frequency of continuously evolving
developments with respect to this pandemic, we cannot reasonably estimate the magnitude of the potential impact on our financial condition
and results of operations, and, the impacts could grow and continue for a longer period of time. The full extent to which the COVID-19
pandemic may impact the Company’s results of operations, financial condition or cash flows remains uncertain. Accordingly, we believe
that future operating results, including the operating results for fiscal 2022, could potentially be materially impacted by the COVID-19
pandemic.
Source of Supply
Our manufacturing operations are partly dependent
on the availability of raw materials. Most of our contracts with customers require the use of customer-supplied raw materials in the manufacture
of their product. Accordingly, raw material requirements vary with each contract and are dependent upon customer requirements and specifications.
We have established relationships with numerous suppliers. When we do buy raw materials, we endeavor to establish alternate sources of
material supply to reduce our dependency on any one supplier.
Our projects include the manufacturing of products
from various traditional as well as specialty metal alloys. These materials may include, but are not limited to: steel, nickel, invar,
monel, inconel, aluminum, stainless steel, titanium and other alloys. Certain of these materials are subject to long-lead time delivery
schedules. As noted above, since the beginning of calendar year 2020, we have experienced some adverse effects to our supply sources as
a result of the COVID-19 pandemic. In particular, the Company has seen lead-times for delivery of certain critical supplies extended.
While the overall situation has improved, we continue to experience sporadic delays and supply shortages for specific items. In the fiscal
year ended March 31, 2021, or “fiscal 2021,” two suppliers accounted for 10% or more of our purchased material. In the
fiscal year ended March 31, 2020, or “fiscal 2020,” two suppliers accounted for 10% or more of our purchased material.
Marketing
While we have significant customer concentration,
we endeavor to broaden our customer base as well as the industries we serve. We market to our existing customer base and also initiate
contacts with new potential customers through various sources including personal contacts, customer referrals, and referrals from other
businesses. A significant portion of our business is the result of competitive bidding processes and a significant portion of our business
is from contract negotiation. We believe that the reputation we have developed with our current customers represents an important part
of our marketing effort.
Requests for quotations received from customers
are reviewed to determine the specific requirements and our ability to meet such requirements. Quotations are prepared by estimating the
material and labor costs and assessing our current backlog to determine our delivery commitments. Competitive bid quotations are submitted
to the customer for review and award of contract. Negotiation bids typically require the submission of additional information to substantiate
the quotation. The bidding process can range from several weeks for a competitive bid to several months for a negotiation bid before the
customer awards a contract. However, the spread of the COVID-19 pandemic in the United States slowed our acquisition of new customer purchase
orders during fiscal year 2021 and 2022 because of the inability of Company representatives to visit current and potential customers and
discuss new orders.
Research and Product Development
Many of our customers generate drawings
illustrating their projected unit design and technology requirements. Our research and product development activities are limited
and focused on delivering robust production solutions to such projected unit design and technology requirements. We follow this
product development methodology in all our major product lines. For these reasons, we incurred no expenses for research and
development in the first six months of fiscal 2022, fiscal 2021 and fiscal 2020.
Principal Customers
A significant portion of our business is generated
by a small number of major customers. The balance of our business consists of discrete projects for numerous other customers. As
industry and market demand changes, our major customers may also change. Our ten largest customers generated approximately 99% and 97%
of our total revenue in fiscal 2021 and fiscal 2020, respectively. Our three largest customers generated approximately 61% and 51% of
our total revenue during the six months ended September 30, 2021 and 2020, respectively.
Our group of largest customers can change from
year to year. Our largest single customer in fiscal 2021 and fiscal 2020 was a prime defense contractor and accounted for 17% and 22%
of our net sales during fiscal 2021 and fiscal 2020, respectively. Our largest single customer during the six months ended September 30,
2021 was a prime defense contractor and accounted for 30% and 13% of our net sales during the six months ended September 30, 2021
and 2020, respectively. Our defense customers are engaged in the development, delivery and support of advanced defense, security and aerospace
systems, including the U.S. Navy’s Virginia-class fast attack submarine program, the U.S. Navy’s Columbia-class ballistic
missile submarine program and the current Sikorsky CH-53E model helicopter and the new CH-53K King Stallion heavy lift helicopter. We
also serve customers who supply components to the nuclear power industry, and in our industrial sector, we build large-scale medical device
components and assemblies for installation at certain medical institutions.
We historically have experienced, and continue
to experience, customer concentration. A significant loss of business from our largest customer or a combination of several of our significant
customers could result in lower operating profitability and/or operating losses if we are unable to replace such lost revenue from other
sources. However, our recently completed acquisition of Stadco has resulted in us having a broader regular customer base. The revenue
derived from all of our customers in the designated industry groups for the fiscal years ended March 31, 2021 and 2020 are displayed
in the table below:
(dollars in thousands)
|
|
2021
|
|
|
2020
|
|
Net Sales
|
|
Amount
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
Defense
|
|
$
|
12,651
|
|
|
|
81
|
%
|
|
$
|
13,368
|
|
|
|
83
|
%
|
Precision Industrial
|
|
$
|
2,945
|
|
|
|
19
|
%
|
|
$
|
2,639
|
|
|
|
17
|
%
|
The following table displays
revenue generated by individual customers in specific industry sectors that accounted for 10% or more of our revenue in either fiscal
2021 or fiscal 2020:
(dollars in thousands)
|
|
2021
|
|
|
2020
|
|
Net Sales
|
|
Amount
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
Defense Customer 1
|
|
$
|
2,705
|
|
|
|
17
|
%
|
|
$
|
3,558
|
|
|
|
22
|
%
|
Defense Customer 4
|
|
$
|
2,683
|
|
|
|
17
|
%
|
|
$
|
*
|
|
|
|
*
|
%
|
Defense Customer 2
|
|
$
|
2,309
|
|
|
|
15
|
%
|
|
$
|
2,759
|
|
|
|
17
|
%
|
Defense Customer 3
|
|
$
|
2,145
|
|
|
|
14
|
%
|
|
$
|
2,063
|
|
|
|
13
|
%
|
Precision Industrial Customer 1
|
|
$
|
*
|
|
|
|
*
|
%
|
|
$
|
1,835
|
|
|
|
11
|
%
|
* Revenue from the customer in this market was less than
10% of our total revenue during the period.
At March 31, 2021, we had a backlog of orders
totaling approximately $18.6 million. We expect to deliver the backlog over the course of the next two to three fiscal years. As
of September 30, 2021, the Company had $26.4 million of remaining performance obligations, of which $17.1 million were less than
50% complete. The Company expects to recognize all of its remaining performance obligations as revenue within the next thirty-six months.
Competition
We face competition from both domestic and foreign
entities in the manufacture of metal fabricated and machined precision components and equipment. The industry in which we compete is fragmented
with no one dominant player. We compete against companies that are both larger and smaller than us in size and capacity. Some competitors
may be better known, have greater resources at their disposal, and have lower production costs. For certain products, being a domestic
manufacturer may play a role in determining whether we are awarded a certain contract. For example, we face limited foreign competition
for our defense products. For other products and markets, we may be competing against foreign manufacturers who have a lower cost of production.
If a contracting party has a relationship with a vendor and is required to place a contract for bids, the preferred vendor may provide
or assist in the development of the specification for the product which may be tailored to that vendor’s products. In such event,
we would be at a disadvantage in seeking to obtain that contract. We believe that customers focus on such factors as the quality of work,
the reputation of the vendor, the perception of the vendor’s ability to meet the required schedule, and price in selecting a vendor
for their products. We believe that our strengths in these areas allow us to compete effectively, and that as a result, we are one of
a select group of companies that can provide the products and services we are able to provide.
Government Regulations
We provide a significant portion of our manufacturing
services as a subcontractor to prime government contractors. Such prime government contractors are subject to government procurement and
acquisition regulations which give the government the right to terminate these contracts for convenience, certain renegotiation rights,
and rights of inspection. Any government action which affects our customers who are prime government contractors would affect us.
Because of the nature and use of our products,
we are subject to compliance with quality assurance programs, compliance with which is a condition for our ability to bid on government
contracts and subcontracts. We believe we are in compliance with all of these programs.
We are also subject to laws and regulations applicable
to manufacturing operations, such as federal and state occupational health and safety laws, and environmental laws, which are discussed
in more detail below under “-Environmental Compliance.”
Environmental Compliance
We are subject to U.S. federal, state and local
environmental laws and regulations that involve the use, disposal and cleanup of substances regulated by those laws and the filing of
reports with environmental agencies, and we are subject to periodic inspections to monitor our compliance. We believe that we are currently
in compliance with applicable environmental regulations. As part of our normal business practice, we are required to develop and file
reports and maintain logbooks that document all environmental issues within our organization. We may engage outside consultants to assist
us in keeping current on developments in environmental regulations. Expenditures for environmental compliance purposes during fiscal 2021
and 2020 were not material.
Occupational Health and Safety Laws
Our business and operations are subject to numerous
federal, state and local laws and regulations intended to protect our employees. Due to the nature of manufacturing, we are subject to
substantial regulations related to safety in the workplace. In addition to the requirements of the state government of Massachusetts and
the local governments having jurisdiction over our plant, we must comply with federal health and safety regulations, the most significant
of which are enforced by the Occupational Safety and Health Administration (“OSHA”).
Further, our manufacturing and other business operations
and facilities are subject to additional federal, state or local laws or regulations including supply chain transparency, conflict minerals
sourcing and disclosure, transportation and other laws or regulations relating to health and safety requirements, including COVID-19 safety
and prevention. Our operations are also subject to federal, state and local labor laws relating to employee privacy, wage and hour matters,
overtime pay, harassment and discrimination, equal opportunity and employee leaves and benefits. We are also subject to existing and emerging
federal and state laws relating to data security and privacy.
It is our policy and practice to comply with all
legal and regulatory requirements and our procedures and internal controls are designed to promote such compliance. Expenditures for compliance
with occupational health and safety laws and regulations during fiscal 2021 and 2020 were not material.
Intellectual Property Rights
Presently, we have no registered intellectual property
rights other than certain trademarks for our name and other business and marketing materials. In the course of our business we develop
know-how for use in the manufacturing process. Although we have non-disclosure policies in place with respect to our personnel and in
our contractual relationships, we cannot assure you that we will be able to protect our intellectual property rights with respect to this
know-how.
Human Capital Resources
The success of our business depends in large part
on our ability to attract, retain, and develop a workforce of skilled employees at all levels of our organization. We provide our employees
base wages and salaries that we believe are competitive and consistent with employee positions, and work with local, regional, and state-wide
agencies to facilitate workforce hiring and development initiatives.
As of September 30, 2021, we had 159 full-time
employees and two part-time employees.
In connection with the outbreak of COVID-19, our
production and support workforce continued to work in-person at our facility to provide vital products and services to our customers,
while a number of our employees in support and administrative functions have effectively worked in-person and remotely since mid-March 2020.
DESCRIPTION OF SECURITIES TO BE REGISTERED
TechPrecision Corporation has one class of securities
registered under Section 12 of the Securities Act of 1934, as amended; our common stock. The following description of our common
stock is a summary and is qualified in its entirety by reference to our Certificate of Incorporation (as amended by that certain Certificate
of Designation for Series A Convertible Preferred Stock, and as further amended by that certain Certificate of Amendment to Certificate
of Designation for Series A Convertible Preferred Stock, the “Certificate of Incorporation”) and our Amended and Restated
By-Laws (the “By-Laws”), which are included as exhibits to the registration statement on Form S-1 of which this prospectus
forms a part. We encourage you to read the Certificate of Incorporation and By-Laws as well as the applicable provisions of the General
Corporation Law of the State of Delaware, as amended (the “DGCL”), for more information.
Authorized Shares
We
are authorized to issue 90,000,000 shares of common stock, par value $.0001 per share, and 10,000,000 shares of preferred stock, par value
$.0001 per share. As of December 31, 2021, we had 34,287,450 shares of common stock
and no shares of preferred stock outstanding.
Voting Rights
Holders of common stock
are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights.
Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors
standing for election.
Dividends
Holders of common stock
are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend
rights of outstanding preferred stock. Pursuant to the certificate of designation relating to the series A preferred stock, we are prohibited
from paying dividends on our common stock while the preferred stock is outstanding.
Liquidation
Upon our liquidation,
dissolution or winding up, the holders of common stock are entitled to receive proportionately our net assets available after the payment
of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock.
Other Rights
Holders of common stock
have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are
subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate
and issue in the future. All of our shares of common stock are fully paid and nonassessable. The common stock is not subject to any redemption
or sinking fund provisions.
Listing
Our common stock is quoted
on the OTCQB Venture Market under the symbol “TPCS.”
Anti-Takeover Effects of Various Provisions
of Delaware Law and TechPrecision’s Certificate of Incorporation and By-Laws
Provisions of the DGCL
and our Certificate of Incorporation and By-Laws could make it more difficult to acquire TechPrecision by means of a tender offer, a proxy
contest or otherwise, or to remove incumbent officers and directors. These provisions, including those summarized below, may encourage
certain types of coercive takeover practices and takeover bids.
Delaware
Anti-Takeover Statute. TechPrecision is subject to Section 203 of the DGCL, an anti-takeover statute. In general,
Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a “business combination” with
an “interested stockholder” for a period of three years following the time the person became an interested stockholder, unless
the business combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in
a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting
in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with
affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own) 15% or more
of a corporation’s voting stock. The existence of this provision would be expected to have an anti-takeover effect with respect
to transactions not approved in advance by TechPrecision’s board of directors, including discouraging attempts that might result
in a premium over the market price for the shares of common stock held by TechPrecision’s stockholders.
Removal.
Subject to the rights of any holders of any outstanding series of our Preferred Stock, stockholders may remove our directors with or without
cause. Removal will require the affirmative vote of holders of a majority of our voting stock.
Size
of Board and Vacancies. Our By-Laws provide that the number of directors be fixed exclusively by the board of directors.
Any vacancies created on its board of directors resulting from any increase in the authorized number of directors or the death, resignation,
retirement, disqualification, removal from office or other cause will be filled by a majority of the board of directors then in office,
even if less than a quorum is present, or by a sole remaining director. Any director appointed to fill a vacancy on our board of directors
will be appointed until the next annual meeting and until his or her successor has been elected and qualified.
Requirements
for Advance Notification of Stockholder Nominations and Proposals. Our By-Laws establish advance notice procedures with
respect to stockholder proposals and nomination of candidates for election as directors other than nominations made by or at the direction
of its board of directors or a committee of our board of directors.
Undesignated
Preferred Stock. Our board of directors is authorized to issue up to 10,000,000 shares of preferred stock without additional
stockholder approval, which preferred stock could have voting rights or conversion rights that, if exercised, could adversely affect the
voting power of the holders of common stock. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing
a change in control of the Company without any action by the Company’s stockholders.
Limitation on Liability of Directors and Indemnification of Directors
and Officers
Elimination
of Liability of Directors. The DGCL authorizes corporations to limit or eliminate the personal liability of directors
to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors, and our Certificate
of Incorporation includes such an exculpation provision. Our Certificate of Incorporation provides that, to the fullest extent permitted
by the DGCL, no director will be personally liable to us or to our stockholders for monetary damages for breach of fiduciary duty as a
director. While our Certificate of Incorporation provides directors with protection from awards for monetary damages for breaches of their
duty of care, it does not eliminate this duty. Accordingly, our Certificate of Incorporation has no effect on the availability of equitable
remedies such as an injunction or rescission based on a director’s breach of his or her duty of care. The provisions apply to an
officer of TechPrecision only if he or she is a director of TechPrecision and is acting in his or her capacity as director, and do not
apply to officers of TechPrecision who are not directors.
Indemnification
of Directors, Officers and Employees. Our By-Laws require us to indemnify any person who was or is a party or is threatened
to be made a party to, or was otherwise involved in, a legal proceeding by reason of the fact that he or she is or was a director, officer
or employee of TechPrecision or, while a director, officer or employee of TechPrecision, is or was serving at our request in a fiduciary
capacity with another enterprise (including any corporation, partnership, limited liability company, joint venture, trust, association
or other unincorporated organization or other entity and any employee benefit plan, to the fullest extent authorized by the DGCL, as it
exists or may be amended, against all expense, liability and loss (including attorneys’ fees, judgments, fines, U.S. Employee Retirement
Income Security Act of 1974, as amended, excise taxes or penalties and amounts paid in settlement by or on behalf of such person) actually
and reasonably incurred in connection with such service. We are authorized under our By-Laws to carry directors’ and officers’
insurance protecting us, any director, officer or employee of ours or, against any expense, liability or loss, whether or not we have
the power to indemnify the person under the DGCL. We may, to the extent authorized from time to time, indemnify any of our agents to the
fullest extent permitted with respect to directors, officers and employees in our By-Laws.
The limitation of liability
and indemnification provisions in our Certificate of Incorporation and By-Laws may discourage stockholders from bringing a lawsuit against
our directors for breach of fiduciary duty. These provisions also may reduce the likelihood of derivative litigation against our directors
and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. By its terms, the indemnification
provided for in our By-Laws is not exclusive of any other rights that the indemnified party may be or become entitled to under any law,
agreement, vote of stockholders or directors, provisions of our Certificate of Incorporation or By-Laws or otherwise. Any amendment, alteration
or repeal of our By-Laws’ indemnification provisions is, by the terms of our By-Laws, prospective only and will not adversely affect
the rights of any indemnity in effect at the time of any act or omission occurring prior to such amendment, alteration or repeal.
SELLING SECURITYHOLDERS
This prospectus relates to the resale by the Selling
Securityholders from time to time of up to an aggregate of 3,902,727 shares of common stock consisting of (i) up to 3,202,727 shares
of our common stock that were issued to the PIPE Investors in a private placement in connection with the closing of the Acquisition, (ii) up
to 600,000 shares of our common stock that were issued to a certain former securityholder of Stadco, a wholly owned subsidiary of ours,
at the closing of the Acquisition and (iii) up to 100,000 shares of our common stock issuable upon the exercise of the Acquisition
Warrants originally issued in connection with the Acquisition. The Selling Securityholders may from time to time offer and sell any or
all of the securities set forth below pursuant to this prospectus and any accompanying prospectus supplement. When we refer to the “Selling
Securityholders” in this prospectus, we mean the persons listed in the table below, their permitted transferees and others who later
come to hold any of the Selling Securityholders’ interest in the common stock other than through a public sale.
The following table sets forth, as of the date
of this prospectus, the names of the Selling Securityholders, the aggregate number of shares of common stock beneficially owned, the aggregate
number of shares of common stock that the Selling Securityholders may offer pursuant to this prospectus and the number of shares of common
stock beneficially owned by the Selling Securityholders after the sale of the securities offered hereby. The percentage of beneficial
ownership of after the offered securities are sold is calculated based on 34,287,450 shares of common stock outstanding as of December 31,
2021.
We have determined beneficial ownership in accordance
with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Unless
otherwise indicated below, to our knowledge, the persons and entities named in the tables have sole voting and sole investment power with
respect to all securities that they beneficially own, subject to community property laws where applicable.
We cannot advise you as to whether the Selling
Securityholders will in fact sell any or all of such common stock. In addition, the Selling Securityholders may sell, transfer or otherwise
dispose of, at any time and from time to time, the common stock in transactions exempt from the registration requirements of the Securities
Act after the date of this prospectus. For purposes of this table, we have assumed that the Selling Securityholders will have sold all
of the securities covered by this prospectus upon the completion of the offering.
Selling Securityholder information for each additional
Selling Securityholder, if any, will be set forth by prospectus supplement to the extent required prior to the time of any offer or sale
of such Selling Securityholder’s shares pursuant to this prospectus. Any prospectus supplement may add, update, substitute, or change
the information contained in this prospectus, including the identity of each Selling Securityholder and the number of shares registered
on its behalf. A Selling Securityholder may sell or otherwise transfer all, some or none of such shares in this offering. See “Plan
of Distribution.”
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Before the
Offering
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After the
Offering
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Name of Selling Securityholder
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Number of
Shares of
Common Stock
Beneficially
Owned
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Number of
Shares of
Common Stock
Being Offered
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Number of
Shares of
Common Stock
Beneficially
Owned
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Percentage of
Outstanding
Shares of
Common Stock
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EJL Living Trust(1)
350 West 42nd Street, #34G
New York, New York 10036
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100,000
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100,000
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-
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-
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Joel Yanowitz and Amy Metzenbaum 2003 Family Rev. Trust(2)
3 Stanton Way
Mill Valley CA 94941
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60,000
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60,000
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-
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-
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Gerald Yanowitz
30 Merrill Circle South
Moraga, CA 94556
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72,000
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50,000
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22,000
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-
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Harold Zirkin Living Trust(3)
5630 Wisconsin Avenue, #1703
Chevy Chase, MD 20815
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200,000
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200,000
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-
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-
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Robert D. Straus
327 Boston Post Road, Suite C
Sudbury, MA 01776
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360,000
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360,000
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-
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-
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Jeffrey L.Block GST Trust(4)
4131 Sunbeam Road
Jacksonville, FL 32257
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227,272
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227,272
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-
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-
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Timothy Hasara
7733 Forsyth Boulevard
Clayton, MO 63105
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150,000
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150,000
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-
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-
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Robert Michael Manschot
808 Columbus Avenue, Apt. 3A
New York, NY 10025
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100,000
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100,000
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-
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-
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Potomac Capital Partners V, LP(5)
299 Park Avenue, 21st Floor
New York, NY 10171
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450,000
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450,000
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-
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-
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Henry J. Krause
50 Wireless Boulevard
Hauppauge, NY 11788
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228,000
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|
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228,000
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|
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-
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-
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Laureen E. Blatt
37 Bridle Path
St. James, NY 11780
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682,000
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682,000
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-
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-
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Randy Steven Saluck
10 Mortar Rock Road
Westport, CT 06880
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45,455
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45,455
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-
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-
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John V. Schultz
151 Fort Pitt Boulevard, Apt. 1801
Pittsburgh, PA 15222
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100,000
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|
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100,000
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-
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-
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Jeffrey P. Bash
11 Amy Drive
Westfield, NJ 07090
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50,000
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50,000
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-
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-
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Ellen Brous
4 Kings Terrace Road
Kings Point, NY 11024
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200,000
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|
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200,000
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|
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-
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|
|
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-
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Catalysis Partners, LLC(6)
610 Main Street
Venice, CA 90291
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200,000
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|
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200,000
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|
|
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-
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|
|
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-
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Five Crowns Credit Partners, LLC(7)
2729 West Coast Highway
Newport Beach, CA 92663
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700,000
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(8)
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700,000
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-
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-
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(1)
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E. John Lazerow is the trustee of the EJL Living Trust, and as a result, may be deemed to have sole voting and investment control
of the shares held by the EJL Living Trust.
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(2)
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Joel Yanowitz is the trustee of the Joel Yanowitz and Amy Metzenbaum 2003 Family Trust (the “Yanowitz Trust”), and as
a result, may be deemed to have sole voting and investment control of the shares held by the Yanowitz Trust.
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(3)
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Harold Zirkin is the trustee of the Harold Zirkin Living Trust, and as a result, may be deemed to have sole voting and investment
control of the shares held by the Harold Zirkin Living Trust.
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(4)
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William Block is the trustee of the Jeffrey Block GST, and as a result, may be deemed to have sole voting and investment control of
the shares held by the Jeffrey Block GST.
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(5)
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Paul J. Solit is the managing member of Potomac Capital Management V LLC, the general partner of Potomac Capital Partners V, LP, and
as a result, may be deemed to have voting and investment control of the shares held by Potomac Capital Partners V, LP.
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(6)
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John P. Francis is the managing member of Francis Capital Management,
LLC, the managing member of Catalysis Partners, LLC, and as a result, may be deemed to have voting and investment control of the shares
held by Catalysis Partners, LLC.
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(7)
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Christopher D. Taylor is the managing member of Five Crowns Credit Partners, LLC (“Five Crowns”), and as a result, may
be deemed to have voting and investment control of the shares held by the Five Crowns.
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(8)
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Includes 100,000 shares of our common stock issuable upon the exercise of the Acquisition Warrants held by Five Crowns.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material
U.S. federal income tax consequences of the acquisition, ownership and disposition of our shares of common stock, which we refer to as
our securities. This discussion applies only to securities that are held as capital assets for U.S. federal income tax purposes and is
applicable only to holders who are receiving our securities in this offering.
This discussion is a summary only and does not
describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including but not limited
to the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may apply if you are
subject to special rules that apply to certain types of investors (such as the effects of Section 451 of the Code), including
but not limited to:
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financial institutions or financial services entities;
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·
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retirement plans, individual retirement accounts or other tax-deferred accounts;
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governments or agencies or instrumentalities thereof;
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regulated investment companies;
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“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate
earnings to avoid U.S. federal income tax;
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real estate investment trusts;
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·
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expatriates or former long-term residents of the United States;
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persons that actually or constructively own five percent or more of our voting shares;
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dealers or traders subject to a mark-to-market method of accounting with respect to the securities;
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persons holding the securities as part of a “straddle,” hedge, integrated transaction or similar transaction;
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U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
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·
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persons subject to alternative minimum tax;
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partnerships or other pass-through entities for U.S. federal income tax purposes and any beneficial owners of such entities; and
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This discussion is based on the Code, and administrative
pronouncements, judicial decisions and final, temporary and proposed Treasury regulations as of the date hereof, which are subject to
change, possibly on a retroactive basis, and changes to any of which subsequent to the date of this prospectus may affect the tax consequences
described herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes (e.g., gift
and estate taxes) other than income taxes.
We have not sought, and will not seek, a ruling
from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its
determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings
or court decisions will not adversely affect the accuracy of the statements in this discussion. You are urged to consult your tax advisor
with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the
laws of any state, local or foreign jurisdiction.
This discussion does not consider the tax treatment
of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity
or arrangement classified as a partnership or other pass-through entity for United States federal income tax purposes) is the beneficial
owner of our securities, the United States federal income tax treatment of a partner or member in the partnership or other pass-through
entity generally will depend on the status of the partner or member and the activities of the partnership or other pass-through entity.
If you are a partner or member of a partnership or other pass-through entity holding our securities, we urge you to consult your own tax
advisor.
THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES. EACH PROSPECTIVE INVESTOR IN OUR
SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION,
OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY UNITED STATES FEDERAL NON-INCOME, STATE,
LOCAL, AND NON-U.S. TAX LAWS.
U.S. Holders
This section applies to you if you are a “U.S.
holder.” A U.S. holder is a beneficial owner of our shares of common stock who or that is, for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity taxable as a corporation) organized in or under the laws of the United States, any state thereof or
the District of Columbia; or
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an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
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a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust
and one or more U.S. persons (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it
has a valid election in effect under Treasury Regulations to be treated as a U.S. person.
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Taxation
of Distributions. If we pay distributions in cash or other property (other than certain distributions of our stock or rights
to acquire our stock) to U.S. holders of shares of our common stock, such distributions generally will constitute dividends for U.S. federal
income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax
principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will first
be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in our common stock. Any remaining excess
will be treated as gain realized on the sale or other disposition of the common stock and will be treated as described under “U.S.
Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of common stock” below.
Dividends we pay to a U.S. holder that is a taxable
corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions
(including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and
provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. holder may constitute “qualified
dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. If the holding period requirements
are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income equal
to the entire dividend amount, and non-corporate holders may be subject to tax on such dividend at regular ordinary income tax rates instead
of the preferential rate that applies to qualified dividend income.
Gain
or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock. Upon a sale or other taxable disposition of
our common stock, a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount
realized and the U.S. holder’s adjusted tax basis in the common stock. Any such capital gain or loss generally will be long-term
capital gain or loss if the U.S. holder’s holding period for the common stock so disposed of exceeds one year. If the holding period
requirements are not satisfied, any gain on a sale or taxable disposition of the shares would be subject to short-term capital gain treatment
and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate U.S. holders will be eligible
to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
Generally, the amount of gain or loss recognized
by a U.S. holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any
property received in such disposition and (ii) the U.S. holder’s adjusted tax basis in its common stock disposed. A U.S. holder’s
adjusted tax basis in its common stock generally will equal the U.S. holder’s acquisition cost for the common stock, less any prior
distributions treated as a return of capital. In the case of any shares of common stock originally acquired as part of an investment unit,
additional considerations may apply to the determination of a U.S. holder’s adjusted tax basis in its common stock.
Information
Reporting and Backup Withholding. In general, information reporting requirements may apply to dividends paid to a U.S. holder
and to the proceeds of the sale or other disposition of our shares of common stock, unless the U.S. holder is an exempt recipient. Backup
withholding may apply to such payments if the U.S. holder fails to provide a taxpayer identification number, a certification of exempt
status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn).
Any amounts withheld under the backup withholding
rules generally should be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided
the required information is timely furnished to the IRS.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S.
holder.” As used herein, the term “Non-U.S. holder” means a beneficial owner of our common stock who is not a U.S. Holder
or any other person that is for U.S. federal income tax purposes:
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a non-resident alien individual (other than certain former citizens and residents of the U.S. subject to U.S. tax as expatriates),
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a foreign corporation, or
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an estate or trust that is not a U.S. holder.
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The term “Non-U.S. Holder” generally does not include an
individual who is present in the United States for 183 days or more in the taxable year of disposition of the securities. If you are such
an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership or
sale or other disposition of our securities.
Taxation
of Distributions. In general, any distributions we make to a Non-U.S. holder of shares of our common stock, to the extent paid
out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends
for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. holder’s conduct
of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of
30%, unless such Non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides
proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). Any distribution not constituting
a dividend will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares of our
common stock and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from the sale
or other disposition of the common stock, which will be treated as described under “Non-U.S. Holders — Gain on Sale, Taxable
Exchange or Other Taxable Disposition of common stock” below. If we are unable to determine, at a time reasonably close to the date
of payment of a distribution on our common stock, what portion, if any, of the distribution will constitute a dividend, then we may withhold
U.S. federal income tax on the basis of assuming that the full amount of the distribution will be a dividend. If we or another withholding
agent apply over-withholding, a non-U.S. holder may be entitled to a refund or credit of any excess tax withheld by timely filing an appropriate
claim with the IRS.
The withholding tax does not apply to dividends
paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder’s
conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S.
income tax as if the Non-U.S. holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A Non-U.S.
corporation receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at
a rate of 30% (or a lower treaty rate).
Any documentation provided to an applicable withholding
agent may need to be updated in certain circumstances. The certification requirements described above also may require a non-U.S. holder
to provide its U.S. taxpayer identification number.
Gain
on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock. A Non-U.S. holder generally will not be subject to
U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our common
stock, unless:
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the gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, under
certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder);
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the non-U.S. holder is a nonresident alien individual who is present in the United States for a period or periods aggregating 183
days or more in the taxable year of the disposition and certain other conditions are met, in which case the non-U.S. holder will be subject
to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty) on the amount by which the non-U.S. holder’s
capital gains allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of the disposition (without
taking into account any capital loss carryovers); or
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we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during
the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held our common stock, and,
in the case where shares of our common stock are regularly traded on an established securities market, the Non-U.S. holder has owned,
directly or constructively, more than 5% of our common stock at any time within the shorter of the five-year period preceding the disposition
or such Non-U.S. holder’s holding period for the shares of our common stock. There can be no assurance that our common stock will
be treated as regularly traded on an established securities market for this purpose. Generally, a corporation is a U.S. real property
holding corporation if the fair market value of its U.S. real property interests, as defined in the Code and applicable U.S. Treasury
Regulations, equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets
used or held for use in a trade or business. Although there can be no assurance, we do not believe that we are, or have been, a U.S. real
property holding corporation for U.S. federal income tax purposes, or that we are likely to become one in the future.
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Unless an applicable treaty provides otherwise,
gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the
Non-U.S. holder were a U.S. resident. Any gains described in the first bullet point above of a Non-U.S. holder that is a foreign corporation
may also be subject to an additional “branch profits tax” at a 30% rate (or lower treaty rate).
If the third bullet point above applies to a Non-U.S.
holder, gain recognized by such holder on the sale, exchange or other disposition of our common stock will be subject to tax at generally
applicable U.S. federal income tax rates. In addition, a buyer of our common stock from any such holder may be required to withhold U.S.
income tax at a rate of 15% of the amount realized upon such disposition if our common stock is not treated as regularly traded on an
established securities market.
Information
Reporting and Backup Withholding. Information returns will be filed with the IRS in connection with payments of dividends and
the proceeds from a sale or other disposition of our shares of common stock. A Non-U.S. holder may have to comply with certification procedures
to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements. The certification
procedures required to claim a reduced rate of withholding under a treaty will satisfy the certification requirements necessary to avoid
the backup withholding as well. The amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against
such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information
is timely furnished to the IRS.
FATCA
Withholding Taxes. Provisions commonly referred to as “FATCA” impose withholding of 30% on payments of dividends
(including constructive dividends) on our common stock to “foreign financial institutions” (which is broadly defined for this
purpose and in general includes investment vehicles) and certain other Non-U.S. entities unless various U.S. information reporting and
due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been
satisfied by, or an exemption applies to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E).
Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA
may be subject to different rules. Under certain circumstances, a Non-U.S. holder might be eligible for refunds or credits of such withholding
taxes, and a Non-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits. Prospective
investors should consult their tax advisers regarding the effects of FATCA on their investment in our securities.
The preceding discussion of material U.S. federal
tax considerations is for general information only. It is not tax advice. You should consult your own tax advisors regarding the particular
U.S. federal, state, local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences
of any proposed changes in applicable laws.
PLAN OF DISTRIBUTION
The securities beneficially owned by the Selling
Securityholders covered by this prospectus may be offered and sold from time to time by the Selling Securityholders. The term “Selling
Securityholders” includes donees, pledgees, transferees or other successors-in-interest selling securities received after the date
of this prospectus from a Selling Securityholder as a gift, pledge, partnership distribution or other transfer. The Selling Securityholders
will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one
or more exchanges on which our common stock may then be listed or in the over-the-counter market or otherwise, at prices and under terms
then prevailing or at prices related to the then-current market price or in negotiated transactions. Each Selling Securityholder reserves
the right to accept and, together with its respective agents, to reject, any proposed purchase of securities to be made directly or through
agents. The Selling Securityholders and any of their permitted transferees may sell their securities offered by this prospectus on any
stock exchange, market or trading facility on which the securities are traded or in private transactions. If underwriters are used in
the sale, such underwriters will acquire the shares for their own account. These sales may be at a fixed price or varying prices, which
may be changed, or at market prices prevailing at the time of sale, at prices relating to prevailing market prices or at negotiated prices.
The securities may be offered to the public through underwriting syndicates represented by managing underwriters or by underwriters without
a syndicate. The obligations of the underwriters to purchase the securities will be subject to certain conditions. The underwriters will
be obligated to purchase all the securities offered if any of the securities are purchased.
Subject to the limitations set forth in any applicable
registration rights agreement, the Selling Securityholders may use any one or more of the following methods when selling the securities
offered by this prospectus:
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purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
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ordinary brokerage transactions and transactions in which the broker solicits purchasers;
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block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
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an over-the-counter distribution in accordance with applicable rules of the OTC Markets;
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through trading plans entered into by a Selling Securityholder pursuant to Rule 10b5-1 under the Exchange Act that are in place
at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales
of their securities on the basis of parameters described in such trading plans;
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through one or more underwritten offerings on a firm commitment or best efforts basis;
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settlement of short sales entered into after the date of this prospectus;
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agreements with broker-dealers to sell a specified number of the securities at a stipulated price per share or warrant;
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directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions;
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through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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through a combination of any of the above methods of sale; or
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any other method permitted pursuant to applicable law.
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There can be no assurance that the Selling Securityholders
will sell all or any of the securities offered by this prospectus. In addition, the Selling Securityholders may also sell securities under
Rule 144 under the Securities Act, if available, or in other transactions exempt from registration, rather than under this prospectus.
The Selling Securityholders have the sole and absolute discretion not to accept any purchase offer or make any sale of securities if they
deem the purchase price to be unsatisfactory at any particular time.
In connection with distributions of the securities
or otherwise, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions. In
connection with such transactions, broker-dealers or other financial institutions may engage in short sales of the securities in the course
of hedging the positions they assume with Selling Securityholders. The Selling Securityholders may also sell the securities short and
redeliver the securities to close out such short positions. The Selling Securityholders may also enter into option or other transactions
with broker-dealers or other financial institutions which require the delivery to such broker-dealer or other financial institution of
securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
It is possible that one or more underwriters may
make a market in our securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time
without notice. We cannot give any assurance as to the liquidity of the trading market for our securities.
Our common stock is quoted for trading under the
symbol “TPCS” on the OTCQB Venture Market.
A Selling Securityholder may enter into derivative
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities
pledged by any Selling Securityholder or borrowed from any Selling Securityholder or others to settle those sales or to close out any
related open borrowings of stock, and may use securities received from any Selling Securityholder in settlement of those derivatives to
close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified
in the applicable prospectus supplement (or a post-effective amendment). In addition, any Selling Securityholder may otherwise loan or
pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such
financial institution or other third party may transfer its economic short position to investors in our securities or in connection with
a concurrent offering of other securities.
In effecting sales, broker-dealers or agents engaged
by the Selling Securityholders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions,
discounts or concessions from the Selling Securityholders in amounts to be negotiated immediately prior to the sale.
If at the time of any offering made under this
prospectus a member of FINRA participating in the offering has a “conflict of interest” as defined in FINRA Rule 5121,
or Rule 5121, that offering will be conducted in accordance with the relevant provisions of Rule 5121.
In order to comply with the securities laws of
certain states, if applicable, the securities must be sold in such jurisdictions only through registered or licensed brokers or dealers.
In addition, in certain states the securities may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
The Selling Securityholders and any other persons
participating in the sale or distribution of the securities will be subject to applicable provisions of the Securities Act and the Exchange
Act, and the rules and regulations thereunder, including, without limitation, Regulation M. These provisions may restrict certain
activities of, and limit the timing of purchases and sales of any of the securities by, the Selling Securityholders or any other person,
which limitations may affect the marketability of the shares of the securities.
We will make copies of this prospectus available
to the Selling Securityholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling Securityholders
may indemnify any agent, broker-dealer or underwriter that participates in transactions involving the sale of the securities against certain
liabilities, including liabilities arising under the Securities Act.
LEGAL MATTERS
McGuireWoods LLP, Charlotte, North Carolina, will
pass upon the validity of any securities we offer by this prospectus. If the validity of any securities is also passed upon by counsel
for the underwriters of an offering of those securities, that counsel will be named in the prospectus supplement relating to that offering.
EXPERTS
The consolidated financial statements of
TechPrecision Corporation, as of March 31, 2021 and for the year then ended, included in the Company’s 2021 Annual Report on
Form 10-K, and the related notes have been audited by Marcum LLP, an independent registered public accounting firm, as set forth
in its report thereon, and incorporated herein by reference. Such financial statements have been incorporated by reference in reliance upon the report pertaining to such
financial statements of such firm given upon their authority as experts in accounting and auditing.
The
consolidated financial statements of Stadco, appearing in the Company’s Current Report on Form 8-K/A filed with the SEC on November 15, 2021, have been audited by Baker Tilly US, LLP, an independent registered public accounting firm, as set forth
in its report thereon, included therein and incorporated herein by reference. Such financial statements are, and audited financial statements
to be included in subsequently filed documents will be, incorporated herein in reliance upon the report of Baker Tilly US, LLP pertaining
to such financial statements as of the date (to the extent covered by consents filed with the SEC) given on the authority of such firm
given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports and proxy statements with the SEC.
These filings include our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and proxy
statements on Schedule 14A, as well as any amendments to those reports and proxy statements, which are available free of charge through
our website as soon as reasonably practicable after we file them with, or furnish them to, the SEC. Our Internet website address is www.techprecision.com.
Our website and the information contained on, or that can be accessed through, the website will not be deemed to be incorporated by reference
in, and are not considered part of, this prospectus. You should not rely on any such information in making your decision whether to purchase
our securities. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information
regarding us and other issuers that file electronically with the SEC.
We have filed with the SEC a registration statement
on Form S-1 under the Securities Act relating to the securities being offered by this prospectus. This prospectus, which constitutes
part of that registration statement, does not contain all of the information set forth in the registration statement or the exhibits and
schedules which are part of the registration statement. For further information about us and the securities offered, see the registration
statement and the exhibits and schedules thereto. Statements contained in this prospectus regarding the contents of any contract or any
other document to which reference is made are not necessarily complete, and, in each instance where a copy of a contract or other document
has been filed as an exhibit to the registration statement, reference is made to the copy so filed, each of those statements being qualified
in all respects by the reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus the information we file with the SEC in other documents,
which means that we can disclose important information to you by referring you to those documents instead of having to repeat the information
in this prospectus. The information incorporated by reference is considered to be part of this prospectus, and later information that
we file with the SEC will automatically update and supersede such information. We incorporate by reference the documents listed below
and any future information filed (rather than furnished) with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
between the date of this prospectus and the date all securities to which this prospectus relates have been sold or the offering is otherwise
terminated and also between the date of the initial registration statement and prior to effectiveness of the registration statement, provided,
however, that we are not incorporating any information furnished under Item 2.02 or Item 7.01 of any Current Report on Form 8-K:
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our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2021 and September 30, 2021, filed with the SEC
on August 12, 2021 and December 9, 2021, respectively;
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our Current Reports on Form 8-K and Form 8-K/A filed with the SEC on April 29, 2021, June 29, 2021, July 26, 2021, August 30, 2021, September 14, 2021, November 15, 2021 and December 20, 2021; and
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We will furnish without charge to you a copy of
any or all of the documents incorporated by reference, including exhibits to these documents, upon written or oral request. Direct your
written request to: Corporate Secretary, TechPrecision Corporation, 1 Bella Drive, Westminster, Massachusetts, 01473, or (978) 874-0591.
A statement contained in a document incorporated
by reference into this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus, any prospectus supplement or in any other subsequently filed document which is also incorporated in this
prospectus modifies or replaces such statement. Any statements so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
Up to 3,902,727 Shares of Common Stock
PROSPECTUS
January 18, 2022
Techprecision (QB) (USOTC:TPCS)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Techprecision (QB) (USOTC:TPCS)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024