Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2022 | Aug. 05, 2022 | Sep. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Mar. 31, 2022 | ||
Entity Registrant Name | TechPrecision Corporation | ||
Entity File Number | 000-51378 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 51-0539828 | ||
Entity Address, Address Line One | 1 Bella Drive | ||
Entity Address, City or Town | Westminster | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 01473 | ||
City Area Code | 978 | ||
Local Phone Number | 874-0591 | ||
Trading Symbol | TPCS | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --03-31 | ||
Title of 12(b) Security | NONE | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Central Index Key | 0001328792 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Amendment Flag | false | ||
Entity Public Float | $ 61.8 | ||
Entity Common Stock, Shares Outstanding | 34,307,450 | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | Marcum LLP | ||
Auditor Firm ID | 688 | ||
Auditor Location | Philadelphia, Pennsylvania |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 1,052,139 | $ 2,130,711 |
Accounts receivable | 3,009,249 | 608,059 |
Contract assets | 8,350,231 | 5,532,408 |
Raw materials | 874,538 | 503,636 |
Work-in-process | 1,360,137 | 767,520 |
Other current assets | 1,421,459 | 379,437 |
Total current assets | 16,067,753 | 9,921,771 |
Property, plant and equipment, net | 13,153,165 | 4,063,209 |
Right of use asset, net | 6,383,615 | |
Deferred income taxes | 2,126,770 | 1,934,415 |
Other noncurrent assets, net | 121,256 | 84,624 |
Total assets | 37,852,559 | 16,004,019 |
Current liabilities: | ||
Accounts payable | 3,426,921 | 500,848 |
Accrued expenses | 3,435,866 | 1,526,270 |
Contract liabilities | 1,765,319 | 218,152 |
Current portion of long-term lease liability | 593,808 | |
Current portion of long-term debt | 4,093,079 | 2,474,963 |
Total current liabilities | 13,314,993 | 4,720,233 |
Long-term debt, net | 3,114,936 | 1,341,938 |
Long-term lease liability | 5,853,791 | |
Other noncurrent liability | 305,071 | |
Total liabilities | 22,588,791 | 6,062,171 |
Commitments and contingent liabilities (see Note 15) | ||
Stockholders' Equity: | ||
Common stock - par value $.0001 per share, 90,000,000 shares authorized, 34,307,450 and 29,498,662 shares issued and outstanding at March 31, 2022 and 2021 | 3,430 | 2,949 |
Additional paid in capital | 14,637,771 | 8,944,660 |
Accumulated other comprehensive income | 21,838 | |
Retained earnings | 622,567 | 972,401 |
Total stockholders' equity | 15,263,768 | 9,941,848 |
Total liabilities and stockholders' equity | $ 37,852,559 | $ 16,004,019 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Mar. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 34,307,450 | 29,498,662 |
Common stock, shares outstanding | 34,307,450 | 29,498,662 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME | ||
Net sales | $ 22,282,495 | $ 15,595,558 |
Cost of sales | 18,905,938 | 12,131,274 |
Gross profit | 3,376,557 | 3,464,284 |
Selling, general and administrative | 4,938,086 | 2,841,036 |
(Loss) income from operations | (1,561,529) | 623,248 |
Other (expense) income, net | (28,385) | 4,600 |
Interest expense | (269,375) | (202,337) |
PPP loan forgiveness | 1,317,100 | |
Total other income (expense), net | 1,019,340 | (197,737) |
(Loss) income before income taxes | (542,189) | 425,511 |
Income tax (benefit) provision | (192,355) | 104,880 |
Net (loss) income | (349,834) | 320,631 |
Other comprehensive (loss) income before tax: | ||
Foreign currency translation adjustments | (1,909) | 150 |
Foreign currency translation reclassification | (19,929) | |
Other comprehensive (loss) income, net of tax | (21,838) | 150 |
Comprehensive (loss) income | $ (371,672) | $ 320,781 |
Net (loss) income per share - basic | $ (0.01) | $ 0.01 |
Net (loss) income per share - diluted | $ (0.01) | $ 0.01 |
Weighted average number of shares outstanding: | ||
Weighted average number of shares outstanding - basic | 32,380,233 | 29,447,085 |
Weighted average number of shares outstanding - diluted | 32,380,233 | 31,035,355 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid in Capital. | Accumulated Other Comprehensive Income | Retained Earnings | Total |
Balance at Mar. 31, 2020 | $ 2,935 | $ 8,793,062 | $ 21,688 | $ 651,770 | $ 9,469,455 |
Balance (in shares) at Mar. 31, 2020 | 29,354,594 | ||||
Stock-based compensation | 179,917 | 179,917 | |||
Restricted stock award | $ 10 | (10) | |||
Restricted stock award (in shares) | 100,000 | ||||
Shares issued under long-term incentive plan | $ 4 | (4) | |||
Shares issued under long-term incentive plan (in shares) | 44,068 | ||||
Taxes on exercised options | (28,305) | (28,305) | |||
Net income loss | 320,631 | 320,631 | |||
Foreign currency translation adjustment | 150 | 150 | |||
Balance at Mar. 31, 2021 | $ 2,949 | 8,944,660 | 21,838 | 972,401 | 9,941,848 |
Balance (in shares) at Mar. 31, 2021 | 29,498,662 | ||||
Stock-based compensation | 155,754 | 155,754 | |||
Restricted stock award | $ 12 | (12) | |||
Restricted stock award (in shares) | 120,000 | ||||
Net income loss | (349,834) | (349,834) | |||
Foreign currency translation adjustment | $ (21,838) | (21,838) | |||
Issuance of common stock | $ 2 | 34,998 | 35,000 | ||
Issuance of common stock (in shares) | 20,000 | ||||
Issuance of warrants | 46,256 | 46,256 | |||
Common stock issued for acquired business | $ 147 | 2,268,853 | 2,269,000 | ||
Common stock issued for acquired business (in shares) | 1,466,061 | ||||
Proceeds from sale of common stock, net | $ 320 | 3,187,262 | 3,187,582 | ||
Proceeds from sale of common stock, net (in shares) | 3,202,727 | ||||
Balance at Mar. 31, 2022 | $ 3,430 | $ 14,637,771 | $ 622,567 | $ 15,263,768 | |
Balance (in shares) at Mar. 31, 2022 | 34,307,450 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (349,834) | $ 320,631 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,460,439 | 704,049 |
Amortization of debt issue costs | 48,251 | 51,399 |
Gain on disposal of equipment | (1,425) | |
Stock based compensation expense | 190,754 | 179,917 |
Change in contract loss provision | (223,111) | (121,316) |
Deferred income taxes | (192,355) | 181,065 |
PPP loan forgiveness | (1,317,100) | |
Contingent consideration | 50,454 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (842,943) | 382,241 |
Contract assets | 1,012,783 | (1,027,787) |
Inventories | (42,491) | (53,542) |
Other current assets | 354,993 | 226,714 |
Other noncurrent assets | (50,633) | |
Accounts payable | 245,743 | 315,783 |
Accrued expenses | (1,477,552) | 65,018 |
Contract liabilities | 1,390,441 | (586,897) |
Net cash provided by operating activities | 257,839 | 635,850 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Business acquisition, net of cash acquired | (7,795,810) | |
Purchases of property, plant and equipment | (939,004) | (546,890) |
Proceeds from sale of fixed assets | 9,582 | |
Deposit for fixed assets | (70,623) | |
Net cash used in investing activities | (8,734,814) | (607,931) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from term loan | 4,000,000 | |
Closing costs related to common stock sale | (335,418) | |
Proceeds from sale of common stock | 3,523,000 | |
Proceeds from revolver loan | 4,612,002 | 1,000,000 |
Repayment of revolver loan | (3,325,000) | (1,000,000) |
Debt issuance costs | (169,884) | (24,610) |
Proceeds from payroll protection program loan | 1,317,100 | |
Principal payments for leases | (508,806) | |
Repayment of long-term debt | (397,490) | (120,441) |
Net cash provided by financing activities | 7,398,404 | 1,172,049 |
Effect of exchange rate on cash and cash equivalents | (113) | |
Net (decrease) increase in cash and cash equivalents | (1,078,571) | 1,199,855 |
Cash and cash equivalents, beginning of period | 2,130,711 | 930,856 |
Cash and cash equivalents, end of period | 1,052,139 | 2,130,711 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION | ||
Cash paid during the year for interest (net of amounts capitalized) | $ 236,575 | $ 135,320 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | Aug. 25, 2021 | Mar. 31, 2021 | Jun. 16, 2020 |
SUPPLEMENTAL INFORMATION - NONCASH INVESTING AND FINANCING TRANSACTIONS: | |||
Copy and print equipment including property, plant and equipment net | $ 45,663 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | ||
Stadco | |||
SUPPLEMENTAL INFORMATION - NONCASH INVESTING AND FINANCING TRANSACTIONS: | |||
Fair value of the consideration transferred | $ 2,269,000 | ||
Fair Value of Warrants | 46,256 | ||
Noncash right of use asset and liability | $ 6,700,000 | ||
2016 Plan | Executive Officers | |||
SUPPLEMENTAL INFORMATION - NONCASH INVESTING AND FINANCING TRANSACTIONS: | |||
Number of stock options exercised | 150,000 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | ||
Common Stock | Stadco | |||
SUPPLEMENTAL INFORMATION - NONCASH INVESTING AND FINANCING TRANSACTIONS: | |||
Number of shares of common stock and warrants issued for acquired business | 1,466,061 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Mar. 31, 2022 | |
DESCRIPTION OF BUSINESS | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS TechPrecision is the parent company of Ranor, Stadco, Stadco New Acquisition, LLC, Westminster Credit Holdings, LLC, or WCH, and Wuxi Critical Mechanical Components Co., Ltd., or WCMC, and are collectively referred to as the “Company”, “we”, “us” or “our”. WCMC, a former wholly foreign owned enterprise, was legally dissolved and deregistered in November 2021. WCMC has had no operations or customers for over five years, when the Company made the decision to exit the alternative energy markets in China. We manufacture large-scale metal fabricated and machined precision components and equipment. These products are used in a variety of markets including defense and aerospace, nuclear, medical, and precision industrial. All our operations and customers are in the United States (U.S.). TechPrecision Corporation, or TechPrecision, is a Delaware corporation organized in February 2005 under the name Lounsberry Holdings II, Inc. On February 24, 2006, we acquired all 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. The name was changed to TechPrecision Corporation on March 6, 2006. On August 25, 2021, the Company completed its previously announced acquisition of Stadco, 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, the Company, through Stadco New Acquisition, LLC, acquired all the issued and outstanding capital stock of Stadco from Stadco Acquisition, LLC in exchange for the issuance of 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. See Note 3 for additional disclosures related to this business combination. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation - Use of Estimates in the Preparation of Financial Statements - Risks and Uncertainties - Liquidity - As of March 31, 2022, we had $3.9 million in total available liquidity, consisting of $1.1 million in cash and cash equivalents, and $2.8 million in undrawn capacity under our revolver loan. Total debt increased by $3.5 million in fiscal 2022. Our debt financing agreements limit our capital expenditures to $1.5 million annually and contain loan to value, balance sheet leverage, and debt service coverage ratio covenants. We were in compliance with all of the financial covenants at March 31, 2022. On June 16, 2022, Ranor entered into a Third Amendment to Amended and Restated Loan Agreement and Third Amendment to Promissory Note to further extend the maturity date of the Ranor Term Loan to September 16, 2022. The Company has commenced negotiations of a further amended and restated loan agreement with Berkshire Bank (see Note 18 – Subsequent Events). We intend to refinance that Ranor Term Loan by borrowing on terms similar to the current loan and using the proceeds to pay down certain existing debt obligations and lowering our debt levels and debt service requirements. However, there can be no assurance that we will be successful in negotiating for these terms with Berkshire Bank or any other lender. In order for us to continue operations beyond the next twelve months and be able to discharge our liabilities and commitments in the normal course of business, we must secure long-term financing on terms consistent with our near-term business plans. In addition, we must change the composition of our revenues at Stadco to focus on recurring profitable projects which efficiently use our manufacturing capacity and reduce our operating expenses to be in line with current business conditions in order to increase profit margins and decrease the amount of cash used in operations. These factors raise substantial doubt about our ability to continue as a going concern. If successful in changing the composition of projects and reducing costs, we expect that fiscal 2023 operating results will reflect positive cash flows. We plan to closely monitor our expenses and, if required, will reduce operating costs and capital spending to enhance liquidity. We had cash and cash equivalents of $1.1 million and working capital of $2.8 million, a decrease when compared to March 31, 2021. We believe our available cash, plus cash expected to be provided by operations, Employee Retention Credit cash refunds, and borrowing capacity available under the revolver loan (until the expiration date of December 20, 2022), will be sufficient to fund our operations, expected capital expenditures, and principal and interest payments under our lease and debt obligations through the next 12 months from the issuance date of our financial statements. Our revolver loan matures in December 2022 and will not be available to provide liquidity unless it is renewed. The Company intends to renew the revolver loan with Berkshire Bank or another lender. Amounts outstanding under the revolver loan at March 31, 2022 and June 30, 2022, were $1.3 million and $0.3 million, respectively. The consolidated financial statements for the year ended March 31, 2022 were prepared on the basis of a going concern which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should we be required to liquidate assets. Our ability to satisfy our current liabilities and to continue as a going concern is dependent upon the timely availability of long-term financing and successful execution of our operating plan. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Cash and cash equivalents - Accounts receivable and allowance for doubtful accounts - Inventories - Contract Assets Property, plant and equipment, net - whereas maintenance and repairs and small renewals are expensed as incurred. The estimated useful lives are machinery and equipment, 5-15 years; buildings, 30 years; and leasehold improvements, 2-5 years. Upon sale or retirement of machinery and equipment, costs and related accumulated depreciation are eliminated, and gains or losses are recognized in the statement of operations and comprehensive (loss) income. Interest is capitalized for assets that are constructed or otherwise produced for our own use, including assets constructed or produced for us by others for which deposits or progress payments have been made. Interest is capitalized to the date the assets are available and ready for use. When an asset is constructed in stages, interest is capitalized for each stage until it is available and ready for use. We use the interest rate incurred on funds borrowed specifically for the project. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. In accordance with Accounting Standards Codification (ASC) 360, Property, Plant & Equipment Debt Issuance Costs - Contract Liabilities Fair Value Measurements - Fair Value Measurement The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, as presented in the balance sheet, approximates fair value due to the short-term nature of these instruments. The carrying value of short and long-term borrowings approximates their fair value. The following table provides the estimated fair values of the Company’s financial instrument liabilities, for which fair value is measured for disclosure purposes only, compared to the recorded amounts at March 31: 2022 2021 Reported Amount Fair Value Reported Amount Fair Value Contingent consideration $ 63,436 $ 63,436 $ — $ — The estimated liability associated with the above contingent consideration in connection with the Stadco acquisition was valued using a Monte Carlo model simulation. The fair value of the contingent consideration was estimated using closing stock prices and expected volatility of 50.0% based on the historical volatility of our common stock. To determine the value of the contingent consideration liability, we used a Monte Carlo simulation model, which takes into consideration the conversion target stock price, the stock market price of our common stock and historical volatility. Under this approach, a probability distribution is developed that reflects the what the stock price may be at a future date. The following table provides a summary of changes in our Level 3 fair value measurements: Balance at March 31, 2021 $ — Initial measurement at fair value 113,890 Change in fair value recorded in the statement of operations (50,454) Balance at March 31, 2022 $ 63,436 Revenue Recognition Revenue from Contracts with Customers (Topic 606), . The Company recognizes revenue over time based on the transfer of control of the promised goods or services to the customer. This transfer occurs over time when the Company has an enforceable right to payment for performance completed to date, and our performance does not create an asset that has an alternative use to the Company. Otherwise, control to the promised goods or services transfers to customers at a point in time. The majority of the Company’s contracts have a single performance obligation and provide title to, or grant a security interest in, work-in-process to the customer. In addition, these contracts contain enforceable rights to payment, allowing the Company to recover both its cost and a reasonable margin on performance completed to date. The combination of these factors indicates that the customer controls the asset and revenue is recognized as the asset is created or enhanced. The Company measures progress for performance obligations satisfied over time using input methods (e.g., costs incurred, resources consumed, labor hours expended, and time elapsed). Under arrangements where the customer does not have title to, or a security interest in, the work-in-process, our evaluation of whether revenue should be recognized over time requires significant judgment about whether the asset has an alternative use and whether the entity has an enforceable right to payment for performance completed to date. When one or both of these factors is not present, the Company will recognize revenue at the point in time where control over the promised good or service transfers to the customer, i.e. when the customer has taken physical possession of the product the Company has built for the customer. The Company and its customers may occasionally enter into contract modifications, including change orders. The Company may account for the modification as a separate contract, the termination of an old contract and creation of a new contract, or as part of the original contract, depending on the nature and pricing of the goods or services included in the modification. In general, contract modifications - as well as other changes in estimates of sales, costs, and profits on a performance obligation - are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes in current and prior periods. A significant change in an estimate on one or more contracts in a period could have a material effect on the consolidated balance sheet or results of operations for that period. For the fiscal year ended March 31, 2022 and 2021, net cumulative catch-up adjustments were not material. No individual adjustment was material to the Company’s consolidated statements of operations and comprehensive (loss) income for the fiscal year ended March 31, 2022 and 2021. If incentives and other contingencies are provided as part of the contract, the Company will include in the initial transaction price the consideration to which it expects to be entitled under the terms and conditions of the contract, generally estimated using an expected value or most likely amount approach. In the context of variable consideration, the Company limits, or constrains, the transaction price to amounts for which the Company believes a significant reversal of revenue is not probable. Adjustments to constrain the transaction price may be due to a portion of the transaction price being in excess of approved funding, a lack of history with the customer, a lack of history with the goods or services being provided, or other items. Shipping and handling fees and costs incurred in connection with products sold are recorded in cost of sales in the consolidated statements of operations and comprehensive (loss) income and are not considered a performance obligation to our customers. Contract Estimates The cost estimation process requires significant judgment and is based upon the professional knowledge and experience of the Company’s engineers, program managers, and financial professionals. Factors considered in estimating the work to be completed and ultimate contract recovery include the availability, productivity, and cost of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in performance, the availability and timing of funding from the customer, and the recoverability of any claims included in the estimates to complete. Costs allocable to undelivered units are reported as work in process, a component of inventory, in the consolidated balance sheet. Pre-contract fulfillment costs requiring capitalization are not material. Selling, general and administrative 2022 2021 Salaries and related expenses $ 2,484,723 $ 1,656,053 Professional fees 1,630,151 805,304 Other general and administrative 823,212 379,679 Total Selling, General and Administrative $ 4,938,086 $ 2,841,036 Stock-based Compensation - Net (Loss) Income per Share of Common Stock - Foreign currency translation - Foreign Currency Matters Income Taxes - Income Taxes . Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. We recognize the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We recognize interest and penalties accrued related to income tax liabilities in selling, general and administrative expense in our Consolidated Statements of Operations and Comprehensive (Loss) Income. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Mar. 31, 2022 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | NOTE 3 – BUSINESS COMBINATION Stadco Acquisition On August 25, 2021, the closing date, the Company completed its previously announced acquisition of Stadco, pursuant to that certain stock purchase agreement, dated as of October 16, 2020, or the SPA, among TechPrecision, Stadco New Acquisition LLC, Stadco Acquisition, LLC, or Holdco, and each stockholder of Holdco. Stadco is a company in the business of manufacturing high-precision parts, assemblies and tooling for aerospace, defense, and industrial customers. Also on the closing date, the Company completed its previously announced acquisition of certain indebtedness obligations of Stadco, pursuant to that certain Amended and Restated Loan Purchase and Sale Agreement, dated as of April 23, 2021, with Sunflower Bank, N.A., as amended by Amendment to Amended and Restated Loan Purchase and Sale Agreement, dated as of June 28, 2021, together, the Loan Purchase Agreement. On August 25, 2021, WCH, as assignee of Stadco New Acquisition LLC, paid $7.9 million in the aggregate to Sunflower Bank, N.A., under the terms of the Loan Purchase Agreement, to purchase the indebtedness. Pursuant to the SPA, and upon the terms and subject to the conditions therein, the Company acquired all of the issued and outstanding capital stock of Stadco in exchange for the issuance of 666,666 shares of the Company’s common stock to Holdco. In connection with the acquisition of Stadco, the Company reached an agreement with the holders of certain other non-bank indebtedness of Stadco, under which each such lender agreed to forgive such indebtedness in exchange for an aggregate of 199,395 shares of the Company’s common stock. In addition, the Company reached an agreement with a certain other security holder who agreed to sell its Stadco securities to the Company in exchange for the issuance by the Company of 600,000 shares of the Company’s common stock and a warrant to purchase 100,000 shares of the Company’s common stock. On August 25, 2021, the Company entered into a Securities Purchase Agreement with a limited number of institutional and other accredited investors, pursuant to which investors committed to subscribe for and purchase 3,202,727 shares of the Company’s common stock at a purchase price of $1.10 per share. Costs directly attributable to this offering of securities totaled $0.3 million. Stadco’s assets and liabilities were measured at estimated fair values at August 25, 2021, primarily using Level 1 and Level 3 inputs. Estimates of fair value represent management’s best estimate and require a complex series of judgments about future events and uncertainties. Third-party valuation specialists were engaged to assist in the valuation of these assets and liabilities. Included in the total consideration transferred is $113,890 related to a contingent provision in the agreements that could require payment based on the difference between the TechPrecision stock price and contract target stock price. The contingent provision allows the issuer, TechPrecision, to settle the contingency with stock or cash, or a combination of each. If after one year following the closing of the acquisition, the fair value of the consideration stock is less than the target stock price stated in each agreement, TechPrecision will issue to the holder additional shares of consideration stock or cash, or some combination of stock and cash. The target stock price stated in the agreements are guaranteed and, only the number of shares issued can vary, with the final measurement date and amount to be determined on the one-year anniversary date. Since the contract does not specify a fixed maximum number of shares to be issued on the anniversary date, should the company determine to satisfy the contingent consideration with shares, then a number of shares higher than the amount currently authorized by the company’s certificate of incorporation may be required to be issued. In any case, the maximum value of the contingent consideration will be $2,269,000, whether paid in shares of common stock or in cash, or both. The estimated liability associated with the contingent consideration was valued under a Monte Carlo simulation and had a balance of $63,436 on March 31, 2022. The fair value of the contingent consideration was estimated using the Monte Carlo model based on the closing stock prices at the period end date and expected volatility of 50.0% based on the historical volatility of our common stock. Measurement Period Adjustments The Company has completed the process of measuring the fair value of assets acquired and liabilities assumed. In the third and fourth quarters of fiscal 2022, the Company made certain measurement period adjustments to reflect the facts and circumstances in existence at the acquisition date. These measurement period adjustments are related to changes in preliminary assumptions and initial estimates that would have been recognized if all the facts and circumstances had been known at the time of acquisition. The table below presents the fair value of assets acquired and liabilities assumed on the acquisition date based on the best information it has received to date in accordance with ASC 805. Adjusted Totals ERTC Customer Fixed Totals August 25, refundable claim 2 Asset August 25, 2021 credit 1 Warrant 3 Valuation 4 2021 Total consideration transferred $ 10,163,164 $ 46,256 $ 10,209,420 Recognized amounts of identifiable assets acquired and liabilities assumed: Accounts receivable 1,247,015 1,247,015 Inventory 927,188 927,188 Other current assets 4,323,593 1,093,661 5,417,254 Property, plant, and equipment and right of use assets 15,074,273 897,488 15,971,761 Accounts payable, accrued expenses, and other current liabilities (5,882,048) (164,049) (606,415) (6,652,512) Lease obligations (6,701,286) (6,701,286) Net assets 8,988,735 929,612 (606,415) 897,488 10,209,420 Goodwill 1,174,429 (929,612) 652,671 (897,488) — Total $ 10,163,164 $ — $ 46,256 $ — $ 10,209,420 All measurement period adjustments were offset against goodwill: 1 In calendar year 2021 our Stadco subsidiary filed for a refund of tax credits for $1,093,661 from the IRS under the Employee Retention Credit, or ERC program. Fees associated with the filing totaled $164,049 . 2 Customer claim of $471,166 accrued for additional costs incurred in connection with a certain product manufacturing project. Other adjustments to current liabilities totaled $135,249 . 3 Warrant issued to former shareholder in connection with the acquisition valued at $46,256 . 4 Fixed asset adjustments related to changes in preliminary valuation assumptions and estimates, including estimates of asset useful lives. Acquisition related costs totaled approximately $320,000 and are included under general and administrative expenses in our statement of operations. Unaudited Supplemental Pro Forma Information The following table discloses the actual results of Stadco since the August 25, 2021 acquisition which are included in the Company’s consolidated financial statements. Also presented in the table below are pro forma results for the combined entities, assuming the acquisition date had occurred on April 1, 2020, for the following periods: Stadco Actual Pro Forma Pro Forma August 25, 2021- Year ended Year ended March 31, 2022 March 31, 2022 March 31, 2021 Net sales $ 7,755,946 $ 27,002,535 $ 30,216,448 Operating loss $ (1,124,542) $ (2,937,391) $ (1,538,197) Loss before income taxes $ (1,233,925) $ (2,151,614) $ (2,199,897) Net loss $ (1,393,987) $ (1,657,666) EPS basic $ (0.04) $ (0.05) EPS dilutive $ (0.04) $ (0.05) Weighted average shares outstanding: – basic and diluted 34,234,957 34,115,873 The pro forma results have been prepared for comparative purposes only and do not necessarily represent what the revenue or results of operations would have been had the acquisition been completed on April 1, 2020. In addition, these results are not intended to be a projection of future operating results and do not reflect synergies that might be achieved from the acquisition. The pro forma results include adjustments for the estimated purchase accounting impact, including, but not limited to, depreciation and amortization associated with the acquired tangible and intangible assets, and an adjustment for interest expense related to the new long-term debt, the alignment of accounting policies, and the elimination of transactions between TechPrecision and Stadco. Other adjustments reflected in the pro forma results are as follows: Adjustments to Unaudited Pro Forma Consolidated Statement of Operations for the fiscal year ended March 31, 2022 ● Excluded the net change in depreciation and amortization of $0.3 million from cost of goods sold, resulting from a valuation adjustment to Stadco’s property, plant and equipment and the recognition of the right-of-use asset for Stadco’s property lease against the reversal of historical rent expense. ● From selling, general and administrative, excluded non-recurring expense of $0.3 million related to consulting, legal, due diligence, bank fees, and nominal costs incurred during the fiscal year by TechPrecision related to the acquisition of Stadco. We also excluded $0.7 million of management fees due to then-preferred stockholders of Stadco. ● Excluded interest expense of $0.3 million which represents the net change in interest expense resulting from the reduction in Stadco’s bank debt and applicable interest rates, offset by estimated interest expense related to Stadco’s new debt obligation. ● Included an estimated tax benefit of $0.8 million at a tax rate equal to TechPrecision’s fiscal year 2022 statutory tax rate based on the proforma loss for the fiscal year ended March 31, 2022. Adjustments to Unaudited Pro Forma Consolidated Statement of Operations for the fiscal year ended March 31, 2021 ● Excluded net change in depreciation and amortization of $1.4 million from cost of goods sold, resulting from a $1.2 million reversal of amortization for an asset deemed to have zero fair value based on revaluation of the Stadco’s intangible assets upon TechPrecision’s acquisition of Stadco. This amount was partially offset by depreciation and amortization resulting from a valuation adjustment to Stadco’s property, plant, and equipment plus the recognition of the right-of-use asset for Stadco’s property lease against the reversal of historical rent expense. ● Excluded from selling, general and administrative non-recurring expense of $0.4 million related to consulting, legal, diligence and bank fees, plus $0.1 million of expense incurred at TechPrecision Corporation related to the acquisition of Stadco. ● Eliminated management fees totaling $0.5 million due to preferred stockholders of Stadco from other income. ● Excluded interest expense of $0.7 million, reflecting a reduction of Stadco’s bank debt and interest rates. ● Included an estimated tax benefit of $0.7 million at a tax rate equal to TechPrecision’s fiscal year 2021 statutory tax rate based on the proforma loss for the fiscal year ended March 31, 2021. |
REVENUE
REVENUE | 12 Months Ended |
Mar. 31, 2022 | |
REVENUE | |
REVENUE | NOTE 4 - REVENUE The Company generates revenue primarily from performance obligations completed under contracts with customers in two main market sectors: defense and precision industrial. The period over which the Company performs its obligations can be between three thirty -six months Revenue is recognized over-time or at a point-in-time given the terms and conditions of the related contracts. The Company utilizes an inputs methodology based on estimated labor hours to measure performance progress. This model best depicts the transfer of control to the customer. The Company’s contract portfolio is comprised of fixed-price contracts and provide for product type sales only. The following table presents net sales on a disaggregated basis by market and contract type: Net Sales by market Defense Industrial Totals Year ended March 31, 2022 $ 20,854,812 $ 1,427,683 $ 22,282,495 Year ended March 31, 2021 $ 12,650,708 $ 2,944,850 $ 15,595,558 Net Sales by contract type Over-time Point-in-time Totals Year ended March 31, 2022 $ 19,992,438 $ 2,290,057 $ 22,282,495 Year ended March 31, 2021 $ 12,869,520 $ 2,726,038 $ 15,595,558 As of March 31, 2022, the Company had $47.3 million of remaining performance obligations, of which $43.7 million were less than 50% complete. The Company expects to recognize all its remaining performance obligations as revenue within the next thirty-six months We are dependent each year on a small number of customers who generate a significant portion of our business, and these customers change from year to year. The following table sets forth revenues from customers who accounted for more than 10% of our net sales for the fiscal years ended March 31: 2022 2021 Customer Amount Percent Amount Percent Customer A $ 4,448,624 20 % $ 2,704,985 17 % Customer B $ 3,534,619 16 % $ 2,682,881 17 % Customer C $ * * % $ 2,308,564 15 % Customer D $ * * % $ 2,145,465 14 % Customer E $ 2,505,205 11 % $ * * % * Less than 10% of total In our consolidated balance sheet, contract assets and contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. In fiscal 2022 and 2021, we recognized revenue of $0.2 and $0.8 million related to our contract liabilities at April 1, 2021 and 2020, respectively. Contract assets consisted of the following at: Progress Unbilled payments Total March 31, 2022 $ 14,216,187 $ (5,865,955) $ 8,350,231 March 31, 2021 $ 11,392,948 $ (5,860,540) $ 5,532,408 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 5 - INCOME TAXES We account for income taxes under ASC 740, Income Taxes 2022 2021 U.S. operations $ (542,189) $ 435,534 Foreign operations — (10,033) (Loss) income before income taxes (542,189) 425,511 Income tax (benefit) provision (192,355) 104,880 Net (loss) income $ (349,834) $ 320,631 The components of the income tax (benefit) provision consist of the following for the fiscal years ended March 31: 2022 2021 Current: Federal $ — $ (76,185) State — — Total Current $ — $ (76,185) Deferred: Federal $ (567,459) $ 148,151 State 375,104 32,914 Total Deferred $ (192,355) $ 181,065 Income tax (benefit) provision $ (192,355) $ 104,880 On March 27, 2020, the U.S. federal government passed the CARES Act. Under the CARES Act, Alternative Minimum Tax, or AMT, credit refunds are accelerated and fully refundable in tax returns through the year 2019. As a result of this provision, the Company recovered all its final AMT credits as refunds in fiscal 2021. Our fiscal 2022 and 2021 taxes were measured at the U.S. statutory income tax rate of 21%. For the year ended March 31, 2022, the Company's tax benefit was driven by lower taxable income and changes in the state net operating losses and valuation allowance. A reconciliation between income taxes computed at the U.S. federal statutory rate to the actual tax expense for income taxes reported in the Consolidated Statements of Operations and Comprehensive (Loss) Income follows for fiscal years ended March 31: 2022 2021 U.S. statutory income tax $ (113,860) $ 89,358 State income tax, net of federal benefit (70,130) 11,366 Nontaxable PPP loan forgiveness (339,022) — Nondeductible items related to dissolved foreign entity 294,232 — Change in state NOLs 227,037 (10,487) Change in valuation allowance (173,004) 20,484 Stock-based compensation (4,620) (4,830) Other (12,988) (1,011) Income tax (benefit) provision $ (192,355) $ 104,880 Effective tax rate* (35.5) % 24.6 % * Effective tax rate is calculated by dividing the income tax provision by (loss) income before income taxes . The following table summarizes the components of deferred income tax assets and liabilities at March 31: 2022 2021 Deferred tax assets: Net operating loss carryforward $ 6,099,169 $ 3,571,600 Compensation 191,976 347,742 Stock based compensation awards 234,752 238,120 Other items not currently deductible 322,463 189,728 Depreciation — 38,490 Total deferred tax assets 6,848,360 4,385,680 Valuation allowance (1,953,609) (1,731,100) Net deferred tax assets 4,894,751 2,654,580 Deferred tax liabilities: Depreciation (2,259,094) — Contract accounting methods (508,887) (720,165) Total deferred tax liabilities (2,767,981) (720,165) Deferred taxes, net $ 2,126,770 $ 1,934,415 In assessing the recoverability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have determined that it is more likely than not that certain future tax benefits may not be realized. Accordingly, a valuation allowance has been recorded against deferred tax assets that are unlikely to be realized. Realization of the remaining deferred tax assets will depend on the generation of sufficient taxable income in the appropriate jurisdictions, the reversal of deferred tax liabilities, tax planning strategies and other factors prior to the expiration date of the carryforwards. A change in the estimates used to make this determination could require an increase or a reduction the valuation allowance currently recorded against those deferred tax assets. The valuation allowance on deferred tax assets was approximately $2.0 million at March 31, 2022. We believe that it is more likely than not that the benefit from certain NOL carryforwards and other deferred tax assets will not be realized. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, the Company could be required to increase or decrease the valuation allowance for those deferred tax assets. The following table summarizes carryforwards of net operating losses as of March 31, 2022: Begins to Amount Expire: Federal net operating losses $ 17,140,365 2026 State net operating losses $ 37,391,264 2032 The Internal Revenue Code provides for a limitation on the annual use of net operating loss carryforwards following certain ownership changes that could limit our ability to utilize these carryforwards on a yearly basis. We experienced an ownership change in connection with the acquisition of Ranor in 2006. Accordingly, our ability to utilize certain carryforwards relating to 2006 and prior is limited. Our remaining pre-2006 net operating losses total approximately $0.4 million.As of March 31, 2022, we have approximately $6.9 million of federal post-2006 losses available for carryforward, without limitation. U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, we may not be able to take full advantage of these carryforwards for Federal or state income tax purposes. Certain pre-2021 Stadco net operating loss carryforwards available for TechPrecision’s consolidated tax group may be limited. Also, U.S. tax laws limit the time during which these loss carryforwards may be applied against future taxes. Our remaining pre-2021 net operating losses total approximately $9.8 million. We have not accrued any penalties with respect to uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction and various U.S. state jurisdictions. Tax years 2018 and forward remain open for examination. |
CAPITAL STOCK and EARNINGS PER
CAPITAL STOCK and EARNINGS PER SHARE | 12 Months Ended |
Mar. 31, 2022 | |
CAPITAL STOCK and EARNINGS PER SHARE | |
CAPITAL STOCK and EARNINGS PER SHARE | NOTE 6 - CAPITAL STOCK and EARNINGS PER SHARE Common Stock We had 90,000,000 authorized shares of common stock at March 31, 2022 and 2021. There were 34,307,450 and 29,498,662 shares of common stock outstanding at March 31, 2022 and 2021, respectively. Preferred Stock We have 10,000,000 authorized shares of preferred stock and our board of directors has broad power to create one or more series of preferred stock and to designate the rights, preferences, privileges, and limitations of the holders of such series. There were no shares of preferred stock outstanding at March 31, 2022 and 2021. Earnings per Share Basic EPS is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding. Diluted EPS also includes the effect of stock options that would be dilutive. The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required under FASB ASC 260. March 31, March 31, 2022 2021 Basic EPS Net (loss) income $ (349,834) $ 320,631 Weighted average shares 32,380,233 29,447,085 Net (loss) income per share $ (0.01) $ 0.01 Diluted EPS Net (loss) income $ (349,834) $ 320,631 Dilutive effect of stock options — 1,588,270 Weighted average shares 32,380,233 31,035,355 Net (loss) income per share $ (0.01) $ 0.01 All potential common stock equivalents that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the fiscal year ended March 31, 2022, there were potential anti-dilutive stock options and warrants, of 2,720,000 and 100,000, respectively, none of which were included in the EPS calculations above. For the year ended March 31, 2021, there were 49,000 of potential common stock equivalents that were out-of-the-money and were not included in the EPS calculations. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Mar. 31, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 7 - STOCK-BASED COMPENSATION Our board of directors, upon the recommendation of the compensation committee of our board of directors, approved the 2016 TechPrecision Equity Incentive Plan, or the 2016 Plan, on November 10, 2016. Our stockholders approved the 2016 Plan at the Company’s Annual Meeting of Stockholders on December 8, 2016. The 2016 Plan succeeds the 2006 Plan and applies to awards granted after the 2016 Plan’s adoption by the Company’s stockholders. We have designed the 2016 Plan to reflect our commitment to having best practices in both compensation and corporate governance. The 2016 Plan provides for a share reserve of 5,000,000 shares of common stock. The 2016 Plan authorizes the award of incentive and non-qualified stock options, restricted stock awards, restricted stock units, and performance awards to employees, directors, consultants, and other individuals who provide services to TechPrecision or its affiliates. The purpose of the 2016 Plan is to enable TechPrecision and its affiliated companies to recruit and retain highly qualified employees, directors, and consultants; and to provide those employees, directors, and consultants with an incentive for productivity, and an opportunity to share in the growth and value of the Company. Subject to adjustment as provided in the 2016 Plan, the maximum number of shares of common stock that may be issued with respect to awards under the 2016 Plan is 5,000,000 shares (inclusive of awards issued under the 2006 Long-Term Incentive Plan, or the 2006 Plan, that remained outstanding as of the effective date of the 2016 Plan). Shares of our common stock subject to awards that expire unexercised or are otherwise forfeited shall again be available for awards under the 2016 Plan. The fair value of the options we grant is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stock. The average dividend yield over the historical period for which volatility was computed is zero. The risk-free interest rate was selected based upon yields of five-year U.S. Treasury issues. We used the simplified method for all grants to estimate the expected life of the option. We assume that stock options will be exercised evenly over the period from vesting until the awards expire. We account for award forfeitures as they occur. As such, the assumed period for each vesting tranche is computed separately and then averaged together to determine the expected term for the award. At March 31, 2022, there were 1,350,000 shares available for grant under the 2016 Plan. The following table summarizes information about options granted during the two most recently completed fiscal years: Weighted Average Weighted Aggregate Remaining Number Of Average Intrinsic Contractual Life Options Exercise Price Value (in years) Outstanding at 3/31/2020 2,916,000 $ 0.415 $ 2,546,800 6.21 Exercised (150,000) 0.800 Canceled (47,000) Outstanding at 3/31/2021 2,719,000 $ 0.372 $ 2,476,300 5.62 Canceled (49,000) Outstanding at 3/31/2022 2,670,000 $ 0.343 $ 3,597,700 4.66 Vested or expected to vest at 3/31/2022 2,670,000 $ 0.343 $ 3,597,700 4.66 Exercisable and vested at 3/31/2022 2,670,000 $ 0.343 $ 3,597,700 4.66 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on the last trading day of the fourth quarter of fiscal 2022 and fiscal 2021 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2021 and 2022. This amount changes based on the fair value of the Company’s common stock. At March 31, 2022, there was no remaining unrecognized compensation cost related to stock options. The maximum contractual term is ten years for option grants. Other information relating to stock options outstanding at March 31, 2022 is as follows: Weighted Average Remaining Weighted Weighted Options Contractual Average Options Average Range of Exercise Prices: Outstanding Term Exercise Price Exercisable Exercise Price $0.01-$0.49 1,270,000 3.60 $ 0.12 1,270,000 $ 0.12 $0.50-$1.00 1,400,000 5.15 $ 0.55 1,400,000 $ 0.55 Totals 2,670,000 2,670,000 Restricted Stock Awards Our board authorizes the issuance of restricted stock as service-based awards measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. The shares of restricted stock fully vested and ceased to be subject to forfeiture one year from the grant date. Each grantee is required to have been serving as a director on the vesting date and must have been continuously serving in such capacity from the grant date through the vesting date for the shares of restricted stock to vest. Prior to the vesting date, the grantee is not permitted to sell, transfer, pledge, assign or otherwise encumber the shares of restricted stock and if the grantee’s service with the Company has terminated prior to the vesting date, subject to certain exceptions, the grantee’s restricted stock is to have been forfeited automatically. On September 1, 2020, we granted a total of 100,000 shares of restricted stock under the 2016 Plan to the board of directors. The shares of restricted stock fully vested on September 1, 2021. Stock-based compensation expense of $134,000 for service-based restricted stock was measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company's common stock. On September 17, 2021, we granted a total of 100,000 shares of restricted stock under the 2016 Plan to the board of directors. The stock-based compensation expense of $175,000 for service-based restricted stock was measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. On January 24, 2022, the board of directors, in recognition of their special efforts in completing the previously disclosed acquisition of Stadco, granted (a) an aggregate total of 20,000 shares of restricted stock under the Company’s 2016 Equity Incentive Plan and (b) a cash award of $35,000, to Alexander Shen, the Company’s chief executive officer, and Thomas Sammons, the Company’s chief financial officer. The shares were measured at fair value at $34,000 on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. The shares of restricted stock fully vest and cease to be subject to forfeiture on January 24, 2023, or the vesting date, one year following the grant date. Each grantee must be serving as an executive officer on the vesting date and must have been continuously serving in such capacity from the grant date through the vesting date for the shares of restricted stock to vest. Prior to the vesting date, the grantee is not permitted to sell, transfer, pledge, assign or otherwise encumber the shares of restricted stock and if the grantee’s service with the Company terminates prior to the vesting date, the grantee’s restricted stock will be forfeited automatically, subject to certain exceptions. Total recognized compensation cost related to the restricted stock awards for the fiscal year ended March 31, 2022 was $155,754. On March 31, 2022 there was $109,079 of unrecognized compensation cost related to the restricted stock awards. Nonemployee Stock Based Payment On October 5, 2021, the Company issued 20,000 shares of common stock to a third-party consultant as payment of a finder’s fee in connection with the acquisition of Stadco. The estimated fair value of the award is $35,000 and was measured on the date of grant based on the number of shares issued and the quoted market price of the Company’s common stock. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Mar. 31, 2022 | |
CONCENTRATION OF CREDIT RISK | |
CONCENTRATION OF CREDIT RISK | NOTE 8 - CONCENTRATION OF CREDIT RISK We maintain bank account balances, which, at times, may exceed insured limits. We have not experienced any losses with these accounts and believe that we are not exposed to any significant credit risk on cash. On March 31, 2022, there were trade accounts receivable balances outstanding from four customers comprising 73% of the total trade receivables balance. The following table sets forth information as to trade accounts receivable from customers who accounted for more than 10% of our accounts receivable balance as of: March 31, 2022 March 31, 2021 Customer Dollars Percent Dollars Percent A $ 1,079,264 36 % $ * * % B $ 436,051 14 % $ * * % C $ * * % $ 399,692 66 % D $ 382,789 13 % $ * * % E $ 309,500 10 % $ * * % F $ * * % $ 193,368 32 % * less than 10% of total |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Mar. 31, 2022 | |
OTHER CURRENT ASSETS | |
OTHER CURRENT ASSETS | NOTE 9 - OTHER CURRENT ASSETS Other current assets included the following as of: March 31, 2022 March 31, 2021 Prepaid taxes $ 26,497 $ — ERC refundable credits 1,093,661 — Prepaid insurance 184,275 312,669 Prepaid subscriptions 66,098 25,967 Payments advanced to suppliers 21,100 17,010 Employee advances 9,668 16,526 Prepaid advisory fees, other 20,160 7,265 Total $ 1,421,459 $ 379,437 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Mar. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 10 - PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following as of: March 31, 2022 March 31, 2021 Land $ 110,113 $ 110,113 Building and improvements 3,289,901 3,249,577 Machinery equipment, furniture, and fixtures 20,860,152 10,695,578 Equipment under finance leases — 45,663 Total property, plant, and equipment 24,260,166 14,100,931 Less: accumulated depreciation (11,107,001) (10,037,722) Total property, plant and equipment, net $ 13,153,165 $ 4,063,209 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Mar. 31, 2022 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE 11 - ACCRUED EXPENSES Accrued expenses included the following as of: March 31, 2022 March 31, 2021 Accrued compensation $ 947,938 $ 496,320 Provision for claims 935,382 495,000 Provision for contract losses 340,272 164,164 Accrued professional fees 513,379 213,213 Accrued project costs 487,869 114,611 Contingent consideration 63,436 — Other 147,590 42,962 Total $ 3,435,866 $ 1,526,270 Accrued compensation includes amounts for executive bonuses, payroll and vacation and holiday pay. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in the provision are recorded in cost of sales. Accrued project costs are estimates for certain project expenses during the reporting period. A customer of our Stadco subsidiary has provided a notice for collection of additional costs incurred in connection with a certain product manufacturing project. Stadco has booked a contingent loss for approximately $0.8 million which is included on the provision for claims line in the above table. |
DEBT
DEBT | 12 Months Ended |
Mar. 31, 2022 | |
DEBT | |
DEBT | NOTE 12 – DEBT Long-term debt included the following as of: March 31, 2022 March 31, 2021 Stadco Term Loan, at 3.79% interest, due August 2028 $ 3,705,792 $ — Ranor Term Loan, at 5.21% interest, due September 2022 2,363,126 2,466,408 Ranor Revolver Loan, at 2.75% interest, due December 2022 1,287,002 — SBA PPP Loan, at 1% interest, due May 2022 — 1,317,100 Obligations under finance lease — 45,663 Total debt $ 7,355,920 $ 3,829,171 Less: debt issue costs unamortized $ 147,905 $ 12,270 Total debt, net $ 7,208,015 $ 3,816,901 Less: Current portion of long-term debt $ 4,093,079 $ 2,474,963 Total long-term debt, net $ 3,114,936 $ 1,341,938 Amended and Restated Loan Agreement On August 25, 2021, the Company entered into an amended and restated loan agreement with Berkshire Bank, or the Loan Agreement. Under the Loan Agreement, Berkshire Bank will continue to provide the Ranor Term Loan (as defined below) and the revolving line of credit, or the Revolver Loan. In addition, Berkshire Bank provided the Stadco Term Loan (as defined below) in the original amount of $4.0 million. The proceeds of the original Ranor Term Loan of $2.85 million were previously used to refinance existing mortgage debt of Ranor. The proceeds of the Revolver Loan are used for working capital and general corporate purposes of the Company. The proceeds of the Stadco Term Loan were to be used to support the acquisition of Stadco and refinance existing indebtedness of Stadco. Stadco Term Loan On August 25, 2021, Stadco borrowed $4,000,000 from Berkshire Bank, or the Stadco Term Loan. Interest on the Stadco Term Loan is due on unpaid balances beginning on August 25, 2021 at a fixed rate per annum equal to the 7 year Federal Home Loan Bank of Boston Classic Advance Rate plus 2.25%. Since September 25, 2021 and on the 25th day of each month thereafter, Stadco had made and will make monthly payments of principal and interest in the amount of $54,390 each, with all outstanding principal and accrued interest due and payable on August 25, 2028. Interest shall be calculated based on actual days elapsed and a 360-day year. The Company shall pay a late charge in the amount of 5% of each payment due under the Stadco Term Loan (other than the balloon payment due at maturity) which is more than ten days in arrears. In addition, from and after the date on which the Stadco Term Loan becomes, or at Berkshire Bank’s option, could become due and payable (whether accelerated or not), at maturity, upon default or otherwise, interest shall accrue and shall be immediately due and payable at the default rate equal to 5% per annum greater than the interest rate otherwise in effect, but in no event higher than the maximum interest rate permitted by law. Unamortized debt issue costs at March 31, 2022 were $71,617. Ranor Term Loan A term loan was made to Ranor by Berkshire Bank in 2016 in the amount of $2.85 million, or the Ranor Term Loan. Payments began on January 20, 2017, and are made in 60 monthly installments of $19,260 each, inclusive of interest at a fixed rate of 5.21% per annum, with all outstanding principal and accrued interest due and payable on the maturity date. On December 17, 2021, Ranor and certain affiliates of the Company entered into a First Amendment to the Amended and Restated Loan Agreement and First Amendment to Promissory Note to extend the maturity date of the Ranor Term Loan from December 20, 2021 to March 18, 2022. On March 18, 2022, Ranor and certain affiliates of the Company entered into a Second Amendment to Amended and Restated Loan Agreement and Second Amendment to Promissory Note to further extend the maturity date of the Ranor Term Loan to June 16, 2022. On June 16, 2022, Ranor and certain affiliates of the Company entered into a Third Amendment to the Amended and Restated Loan Agreement and Third Amendment to the Promissory Note to further extend the maturity date of the Ranor Term Loan to September 16, 2022. A balloon principal payment of approximately $2.4 million, originally due on December 20, 2021, is now due on September 16, 2022, under the Term Loan. In accordance with the amended loan agreement, the maximum amount that can now be borrowed under the Revolver loan is $5.0 million. Advances under the Revolver Loan are subject to a borrowing base equal to the lesser of (a) $5.0 million or (b) the sum of (i)80% of the net outstanding amount of Base Accounts, plus (ii) the lesser of (x) 25% of Eligible Raw Material Inventory, and (y) $250,000, plus (iii) 80% of the Appraised Value of the Eligible Equipment, as such terms are defined in the Loan Agreement. The Company agrees to pay to Berkshire Bank, as consideration for Berkshire Bank’s agreement to make the Revolver Loan available, a nonrefundable Revolver Loan fee equal to 0.25% per annum (computed based on a year of 360 days and actual days elapsed) on the difference between the amount of: (a) $5.0 million, and (b) the average daily outstanding balance of the Revolver Loan during the quarterly period then ended. All Revolver Loan fees are payable quarterly in arrears on the first day of each January, April, July and October and on the Revolver Maturity Date, or upon acceleration of the Revolver Loan, if earlier. Under the promissory note for the Revolver Loan, the Company can elect to pay interest at an adjusted LIBOR-based rate or an Adjusted Prime Rate. The minimum adjusted LIBOR-based rate is 2.75% and the Adjusted Prime Rate is the greater of (i) the Prime Rate minus 70 basis points or (ii) 2.75%. Interest-only payments on advances made under the Revolver Loan will continue to be payable monthly in arrears. The maturity date of the Revolver Loan is December 20, 2022. This agreement contains customary LIBOR replacement provisions. There was approximately $1.3 million outstanding under the Revolver Loan at March 31, 2022. Interest payments made under the Revolver Loan were $17,066 and $6,664 for the fiscal years ended March 31, 2022 and 2021. Weighted average interest rates at March 31, 2022 and 2021 were 2.75% and 2.67%, respectively. Unused borrowing capacity at March 31, 2022 and March 31, 2021 was approximately $2.8 million and $2.7 million, respectively. Unamortized debt issue costs at March 31, 2022 and 2021 were $76,288 and $26,272, respectively. Berkshire Loan Covenants For purposes of this discussion, Ranor and Stadco are referred to together as the Borrowers. The Ranor Term Loan, the Stadco Term Loan and the Revolver Loan, or together, the Berkshire Loans, may be accelerated upon the occurrence of an event of default as defined in the Berkshire Loan Agreement. Upon the occurrence and during the continuance of any of certain default events, at the option of Berkshire Bank, or automatically without notice or any other action upon the occurrence of any event specified in the loan agreement, the unpaid principal amount of the Loans and the Notes together with accrued interest and all other Obligations owing by the Borrowers to Berkshire Bank would become immediately due and payable without presentment, demand, protest, or further notice of any kind. The Borrowers agree to maintain the ratio of the Cash Flow of TechPrecision to the Total Debt Service of TechPrecision of not less than 1.20 to 1.00, measured quarterly on the last day of each fiscal quarter-annual period of TechPrecision on a trailing twelve (12) month basis, commencing with the fiscal quarter ending as of September 30, 2021. Calculations will be based on the audited (year-end) and unaudited (quarterly) consolidated financial statements of TechPrecision. Quarterly tests will be measured based on the financial statements included in the Company’s quarterly reports on Form 10-Q within sixty days of the end of each quarter, and annual tests will be measured based on the financial statements included in the Company’s annual reports on Form 10-K within one hundred twenty days after the end of each fiscal annual period. Cash Flow means an amount, without duplication, equal to the sum of net income of TechPrecision plus (i) interest expense, plus (ii) taxes, plus (iii) depreciation and amortization, plus (iv) stock based compensation expense taken by TechPrecision, plus (v) non-cash losses and charges and one time or non-recurring expenses at Berkshire Bank’s discretion, less (vi) the amount of cash distributions, if any, made to shareholders or owners of TechPrecision, less (vii) cash taxes paid by the TechPrecision, all as determined in accordance with U.S. GAAP. Total Debt Service shall mean an amount, without duplication, equal to the sum of (i) all amounts of cash interest paid on liabilities, obligations and reserves of TechPrecision paid by TechPrecision, (ii) all amounts paid by TechPrecision in connection with current maturities of long-term debt and preferred dividends, and (iii) all payments on account of capitalized leases, all as determined in accordance with U.S. GAAP. The Borrowers agree to cause their Balance Sheet Leverage to be less than or equal 2.50 to 1.00. Compliance with the foregoing shall be tested quarterly, as of the last day of each fiscal quarter of the Borrowers, commencing with the fiscal quarter ending September 30, 2021. Balance Sheet Leverage means, at any date of determination, the ratio of Borrowers’ (a) Total Liabilities, less Subordinated Debt, to (b) Net Worth, plus Subordinated Debt. The Borrowers agree that their combined annual capital expenditures shall not exceed $1.5 million. Compliance shall be tested annually, commencing with the fiscal year ending March 31, 2022. The Borrowers agree to maintain a Loan to Value Ratio of not greater than 0.75 to 1.00. Loan to Value Ratio means the ratio of (a) the sum of the outstanding balance of the Ranor Term Loan and the Stadco Term Loan, to (b) the fair market value of the property pledged as collateral for the loan, as determined by an appraisal obtained from time to time by Berkshire Bank, but not more frequently than one time during each 365 day period (provided that Berkshire Bank may obtain an appraisal at any time after either the Ranor Term Loan or the Stadco Term Loan has been accelerated), which appraisals shall be at the expense of the Borrowers. The Company was in compliance with all of the financial covenants at March 31, 2022 and March 31, 2021. Collateral securing all the above obligations comprises all personal and real property of the Company, including cash, accounts receivable, inventories, equipment, and financial assets. The carrying value of short and long-term borrowings approximates their fair value. The Company’s short-term and long-term debt is all privately held with no public market for this debt and is considered to be Level 3 under the fair value hierarchy. The scheduled principal maturities for our long-term debt by fiscal year are: 2023 $ 4,169,426 2024 539,324 2025 560,701 2026 582,630 2027 605,417 Thereafter 898,422 Total $ 7,355,920 Small Business Administration Loan On May 8, 2020, the Company, through its wholly owned subsidiary Ranor, issued a promissory note, or the 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 CARES Act and is administered by the U.S. Small Business Administration, or the SBA. The loan to Ranor was made through Berkshire Bank. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all, or a portion of loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs, certain group health care benefits and insurance premiums, and any payments of mortgage interest, rent, and utilities. The terms of any forgiveness may also be subject to further requirements in any regulations and guidelines the SBA may adopt. While the Company currently believes that its use of the Note proceeds will meet the conditions for forgiveness under the PPP, no assurance is provided that the Company will obtain forgiveness of the Note in whole or in part. On June 5, 2020, the PPP was amended to give borrowers more time to spend loan proceeds and still obtain 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 would no longer be 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. Unamortized closing costs in connection with the PPP loan were $3,875 on March 31, 2021. On May 12, 2021, as authorized by Section 1106 of the CARES Act, the SBA remitted to Berkshire Bank, the lender of record, 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. Loan forgiveness is recorded as a gain under other income and expense in the consolidated statement of operations. |
OTHER NONCURRENT LIABILITY
OTHER NONCURRENT LIABILITY | 12 Months Ended |
Mar. 31, 2022 | |
OTHER NONCURRENT LIABILITY. | |
OTHER NONCURRENT LIABILITY | NOTE 13 - OTHER NONCURRENT LIABILITY The Company purchased new equipment in fiscal 2022 for contract project work with a certain customer. Under an addendum to the contract purchase orders, that customer agreed to reimburse the Company for the cost of the new equipment. We received the first payment January 2022. In case of a contract breach, at the time of the breach, the customer may claw back the funds based on a prorated ten-year straight-line annual declining balance recovery period. The obligation of $305,071 is recorded as a noncurrent liability in the balance sheet. |
LEASES
LEASES | 12 Months Ended |
Mar. 31, 2022 | |
LEASES | |
LEASES | NOTE 14 – LEASES After we settled certain default amounts, Stadco became party to an amended building and property operating lease and recorded a right of use asset and liability of $6.6 million. Monthly base rent for the property is $78,233 per month, with a 20% discount through November 30, 2022. The term of the lease will expire on June 30, 2030, and the lessee has no right of renewal beyond the expiration date. The lease contains customary default provisions allowing the Landlord to terminate the lease if the lessee fails to remedy a breach of its obligations under the lease within the period specified in the lease, or upon certain events of bankruptcy or seizure or attachment of the lessee’s assets or interest in the lease. The lease also contains other customary provisions for real property leases of this type. In December 2019, we signed a one-year operating lease for office space which expired in December 2020 and was amortized on a straight-line basis. We leased the office month-to-month until December 31, 2021 and have not renewed the lease. Lease cost was approximately $4,000 per year. The following table lists our right-of-use assets and liabilities on our consolidated balance sheets at: March 31, 2022 March 31, 2021 Finance lease: Right of use asset – operating lease $ 6,649,744 $ — Right of use asset – finance leases 125,032 45,663 Amortization (391,161) — Right of use asset, net $ 6,383,615 $ 45,663 Lease liability – operating lease $ 6,374,691 $ — Lease liability – finance leases 72,908 45,663 Total lease liability $ 6,447,599 $ 45,663 Other supplemental information regarding our leases is contained in the following tables: Components of lease expense for the year ended: March 31, 2022 March 31, 2021 Operating lease amortization $ 363,206 $ 3,788 Finance lease amortization $ 27,955 $ 10,875 Finance lease interest $ 1,851 $ 1,275 Weighted average lease term and discount rate at: March 31, 2022 March 31, 2021 Lease term (years) – operating lease 8.25 — Lease term (years) – finance lease 2.48 5.00 Lease rate – operating lease 4.5 % — Lease rate – finance lease 3.9 % 3.2 % Supplemental cash flow information related to leases for the year ended: March 31, 2022 March 31, 2021 Cash used in operating activities $ 448,206 $ 5,063 Cash used in financing activities $ 508,806 $ 22,460 Maturities of lease liabilities at March 31, 2022 for the next five years and thereafter: 2023 $ 882,581 2024 954,970 2025 948,701 2026 948,701 2027 938,801 Thereafter 2,972,872 Total lease payments $ 7,646,626 Less: imputed interest 1,199,027 Total $ 6,447,599 |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Mar. 31, 2022 | |
COMMITMENTS | |
COMMITMENTS | NOTE 15 - COMMITMENTS Employment Agreements We have employment agreements with each of our executive officers. Such agreements provide for minimum salary levels, adjusted annually, and incentive bonuses that are payable if specified company goals are attained. The aggregate commitment at March 31, 2022 for future executive salaries was approximately $0.6 million. The aggregate commitment at March 31, 2022 was approximately $0.9 million for accrued payroll, vacation and holiday pay for the remainder of our employees. Purchase Commitments As of March 31, 2022, we had approximately $5.8 million in purchase obligations outstanding, which primarily consisted of contractual commitments to purchase new materials and supplies. Retirement Benefits Ranor has a defined contribution and savings plan that covers substantially all Ranor employees who have completed 90 days of service. Ranor retains the option to match employee contributions. The Company contributed $89,316 and $85,359 for the years ended March 31, 2022 and 2021, respectively. Provision for claims settlement On March 15, 2021, the court approved the final class action settlement for all outstanding claims related to a civil class action brought by former employees for past wages claimed under a paid time-off program. As such, the plaintiffs’ claims have been fully and finally dismissed, and the $495,000 payment to the plaintiffs’ counsel was paid on May 10, 2021. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Mar. 31, 2022 | |
SEGMENT INFORMATION. | |
SEGMENT INFORMATION | NOTE 16 – SEGMENT INFORMATION The Company has two wholly-owned subsidiaries, Ranor and Stadco that are reportable segments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. All of the Company’s operations, assets, and customers are located in the U.S. Each reportable segment focuses on the manufacture and assembly of specific components, primarily for defense, aerospace and other industrial customers. However, both segments have separate operating, engineering, and sales teams. The Chief Operating Decision Maker, or CODM, evaluates the performance of our segments based upon, among other things, segment net sales and operating profit. Segment operating profit excludes general corporate costs. Corporate costs include executive and director compensation, stock-based compensation, and other corporate and administrative expenses not allocated to the segments. The segment operating profit metric is what the CODM uses in evaluating our results of operations and the financial measure that provides insight into our overall performance and financial position. The following table provides summarized financial information for our segments: March 31, 2022 March 31, 2021 Ranor $ 14,580,306 $ 15,595,558 Stadco 7,755,946 — Eliminate intersegment revenue (53,757) — Net sales from external customers $ 22,282,495 $ 15,595,558 Ranor operating income 961,392 1,578,307 Stadco operating loss (1,124,542) — Corporate and unallocated (1) (1,398,379) (955,059) Total operating (loss) income $ (1,561,529) $ 623,248 Interest expense and other expense (297,761) (197,737) Unallocated PPP loan forgiveness 1,317,100 — Consolidated (loss) income before income taxes $ (542,189) $ 425,511 Assets Ranor 10,654,579 13,569,908 Stadco 24,907,656 — Corporate and unallocated 2,290,324 2,434,111 Totals $ 37,852,559 $ 16,004,019 Depreciation and amortization Ranor 595,536 704,049 Stadco 864,903 — Totals $ 1,460,439 $ 704,049 Capital expenditures Ranor 825,608 546,890 Stadco 113,396 — Totals $ 939,004 $ 546,890 (1) Corporate general costs include executive and director compensation, and other corporate administrative expenses not allocated to the segments. Prior period segment data is restated to reflect the new reportable segments. |
ACCOUNTING STANDARDS UPDATE
ACCOUNTING STANDARDS UPDATE | 12 Months Ended |
Mar. 31, 2022 | |
ACCOUNTING STANDARDS UPDATE | |
ACCOUNTING STANDARDS UPDATE | NOTE 17 – ACCOUNTING STANDARDS UPDATE New Accounting Standards Recently Adopted On April 1, 2021, we adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. On April 1, 2020, we adopted ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. Issued Standards Not Yet Adopted In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. Earnings Per Share |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS Employee Retention Credit In first quarter of fiscal 2023 our Stadco subsidiary received two payments for an aggregate of $746,453 from the IRS under the Employee Retention Credit, or ERC program. As originally enacted by the CARES Act, the ERC provides a refundable payroll credit for eligible employers whose business has been affected by the coronavirus (COVID-19) pandemic for qualified wages paid after March 12, 2020, and before January 1, 2021. Notice 2021-49 (issued in August 2021) addressed changes made by the American Rescue Plan Act of 2021 to the ERC. These changes—applicable to the third and fourth quarters of 2021—includes a provision that made the ERC available to eligible employers that pay qualified wages after June 30, 2021, and before January 1, 2022. Ranor Term Loan On June 16, 2022, Ranor and certain affiliates of the Company entered into a Third Amendment to the Amended and Restated Loan Agreement and Third Amendment to the Promissory Note to further extend the maturity date of the Ranor Term Loan to September 16, 2022. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation - |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements - |
Risks and Uncertainties | Risks and Uncertainties - |
Liquidity | Liquidity - As of March 31, 2022, we had $3.9 million in total available liquidity, consisting of $1.1 million in cash and cash equivalents, and $2.8 million in undrawn capacity under our revolver loan. Total debt increased by $3.5 million in fiscal 2022. Our debt financing agreements limit our capital expenditures to $1.5 million annually and contain loan to value, balance sheet leverage, and debt service coverage ratio covenants. We were in compliance with all of the financial covenants at March 31, 2022. On June 16, 2022, Ranor entered into a Third Amendment to Amended and Restated Loan Agreement and Third Amendment to Promissory Note to further extend the maturity date of the Ranor Term Loan to September 16, 2022. The Company has commenced negotiations of a further amended and restated loan agreement with Berkshire Bank (see Note 18 – Subsequent Events). We intend to refinance that Ranor Term Loan by borrowing on terms similar to the current loan and using the proceeds to pay down certain existing debt obligations and lowering our debt levels and debt service requirements. However, there can be no assurance that we will be successful in negotiating for these terms with Berkshire Bank or any other lender. In order for us to continue operations beyond the next twelve months and be able to discharge our liabilities and commitments in the normal course of business, we must secure long-term financing on terms consistent with our near-term business plans. In addition, we must change the composition of our revenues at Stadco to focus on recurring profitable projects which efficiently use our manufacturing capacity and reduce our operating expenses to be in line with current business conditions in order to increase profit margins and decrease the amount of cash used in operations. These factors raise substantial doubt about our ability to continue as a going concern. If successful in changing the composition of projects and reducing costs, we expect that fiscal 2023 operating results will reflect positive cash flows. We plan to closely monitor our expenses and, if required, will reduce operating costs and capital spending to enhance liquidity. We had cash and cash equivalents of $1.1 million and working capital of $2.8 million, a decrease when compared to March 31, 2021. We believe our available cash, plus cash expected to be provided by operations, Employee Retention Credit cash refunds, and borrowing capacity available under the revolver loan (until the expiration date of December 20, 2022), will be sufficient to fund our operations, expected capital expenditures, and principal and interest payments under our lease and debt obligations through the next 12 months from the issuance date of our financial statements. Our revolver loan matures in December 2022 and will not be available to provide liquidity unless it is renewed. The Company intends to renew the revolver loan with Berkshire Bank or another lender. Amounts outstanding under the revolver loan at March 31, 2022 and June 30, 2022, were $1.3 million and $0.3 million, respectively. The consolidated financial statements for the year ended March 31, 2022 were prepared on the basis of a going concern which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should we be required to liquidate assets. Our ability to satisfy our current liabilities and to continue as a going concern is dependent upon the timely availability of long-term financing and successful execution of our operating plan. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Cash and cash equivalents | Cash and cash equivalents - |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts - |
Inventories | Inventories - |
Contract Assets | Contract Assets |
Property, plant and equipment, net | Property, plant and equipment, net - whereas maintenance and repairs and small renewals are expensed as incurred. The estimated useful lives are machinery and equipment, 5-15 years; buildings, 30 years; and leasehold improvements, 2-5 years. Upon sale or retirement of machinery and equipment, costs and related accumulated depreciation are eliminated, and gains or losses are recognized in the statement of operations and comprehensive (loss) income. Interest is capitalized for assets that are constructed or otherwise produced for our own use, including assets constructed or produced for us by others for which deposits or progress payments have been made. Interest is capitalized to the date the assets are available and ready for use. When an asset is constructed in stages, interest is capitalized for each stage until it is available and ready for use. We use the interest rate incurred on funds borrowed specifically for the project. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. In accordance with Accounting Standards Codification (ASC) 360, Property, Plant & Equipment |
Debt Issuance Costs | Debt Issuance Costs - |
Contract Liabilities | Contract Liabilities |
Fair Value Measurements | Fair Value Measurements - Fair Value Measurement The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, as presented in the balance sheet, approximates fair value due to the short-term nature of these instruments. The carrying value of short and long-term borrowings approximates their fair value. The following table provides the estimated fair values of the Company’s financial instrument liabilities, for which fair value is measured for disclosure purposes only, compared to the recorded amounts at March 31: 2022 2021 Reported Amount Fair Value Reported Amount Fair Value Contingent consideration $ 63,436 $ 63,436 $ — $ — The estimated liability associated with the above contingent consideration in connection with the Stadco acquisition was valued using a Monte Carlo model simulation. The fair value of the contingent consideration was estimated using closing stock prices and expected volatility of 50.0% based on the historical volatility of our common stock. To determine the value of the contingent consideration liability, we used a Monte Carlo simulation model, which takes into consideration the conversion target stock price, the stock market price of our common stock and historical volatility. Under this approach, a probability distribution is developed that reflects the what the stock price may be at a future date. The following table provides a summary of changes in our Level 3 fair value measurements: Balance at March 31, 2021 $ — Initial measurement at fair value 113,890 Change in fair value recorded in the statement of operations (50,454) Balance at March 31, 2022 $ 63,436 |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers (Topic 606), . The Company recognizes revenue over time based on the transfer of control of the promised goods or services to the customer. This transfer occurs over time when the Company has an enforceable right to payment for performance completed to date, and our performance does not create an asset that has an alternative use to the Company. Otherwise, control to the promised goods or services transfers to customers at a point in time. The majority of the Company’s contracts have a single performance obligation and provide title to, or grant a security interest in, work-in-process to the customer. In addition, these contracts contain enforceable rights to payment, allowing the Company to recover both its cost and a reasonable margin on performance completed to date. The combination of these factors indicates that the customer controls the asset and revenue is recognized as the asset is created or enhanced. The Company measures progress for performance obligations satisfied over time using input methods (e.g., costs incurred, resources consumed, labor hours expended, and time elapsed). Under arrangements where the customer does not have title to, or a security interest in, the work-in-process, our evaluation of whether revenue should be recognized over time requires significant judgment about whether the asset has an alternative use and whether the entity has an enforceable right to payment for performance completed to date. When one or both of these factors is not present, the Company will recognize revenue at the point in time where control over the promised good or service transfers to the customer, i.e. when the customer has taken physical possession of the product the Company has built for the customer. The Company and its customers may occasionally enter into contract modifications, including change orders. The Company may account for the modification as a separate contract, the termination of an old contract and creation of a new contract, or as part of the original contract, depending on the nature and pricing of the goods or services included in the modification. In general, contract modifications - as well as other changes in estimates of sales, costs, and profits on a performance obligation - are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes in current and prior periods. A significant change in an estimate on one or more contracts in a period could have a material effect on the consolidated balance sheet or results of operations for that period. For the fiscal year ended March 31, 2022 and 2021, net cumulative catch-up adjustments were not material. No individual adjustment was material to the Company’s consolidated statements of operations and comprehensive (loss) income for the fiscal year ended March 31, 2022 and 2021. If incentives and other contingencies are provided as part of the contract, the Company will include in the initial transaction price the consideration to which it expects to be entitled under the terms and conditions of the contract, generally estimated using an expected value or most likely amount approach. In the context of variable consideration, the Company limits, or constrains, the transaction price to amounts for which the Company believes a significant reversal of revenue is not probable. Adjustments to constrain the transaction price may be due to a portion of the transaction price being in excess of approved funding, a lack of history with the customer, a lack of history with the goods or services being provided, or other items. Shipping and handling fees and costs incurred in connection with products sold are recorded in cost of sales in the consolidated statements of operations and comprehensive (loss) income and are not considered a performance obligation to our customers. |
Contract Estimates | Contract Estimates The cost estimation process requires significant judgment and is based upon the professional knowledge and experience of the Company’s engineers, program managers, and financial professionals. Factors considered in estimating the work to be completed and ultimate contract recovery include the availability, productivity, and cost of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in performance, the availability and timing of funding from the customer, and the recoverability of any claims included in the estimates to complete. Costs allocable to undelivered units are reported as work in process, a component of inventory, in the consolidated balance sheet. Pre-contract fulfillment costs requiring capitalization are not material. |
Selling, general and administrative | Selling, general and administrative 2022 2021 Salaries and related expenses $ 2,484,723 $ 1,656,053 Professional fees 1,630,151 805,304 Other general and administrative 823,212 379,679 Total Selling, General and Administrative $ 4,938,086 $ 2,841,036 |
Stock-based Compensation | Stock-based Compensation - |
Net Income (Loss) per Share of Common Stock | Net (Loss) Income per Share of Common Stock - |
Foreign currency translation | Foreign currency translation - Foreign Currency Matters |
Income Taxes | Income Taxes - Income Taxes . Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. We recognize the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We recognize interest and penalties accrued related to income tax liabilities in selling, general and administrative expense in our Consolidated Statements of Operations and Comprehensive (Loss) Income. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated fair value of financial instruments | 2022 2021 Reported Amount Fair Value Reported Amount Fair Value Contingent consideration $ 63,436 $ 63,436 $ — $ — |
Schedule of changes in Level 3 fair value measurements | Balance at March 31, 2021 $ — Initial measurement at fair value 113,890 Change in fair value recorded in the statement of operations (50,454) Balance at March 31, 2022 $ 63,436 |
Schedule of selling, general, and administrative expenses | 2022 2021 Salaries and related expenses $ 2,484,723 $ 1,656,053 Professional fees 1,630,151 805,304 Other general and administrative 823,212 379,679 Total Selling, General and Administrative $ 4,938,086 $ 2,841,036 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
BUSINESS COMBINATION | |
Schedule of assets acquired and liabilities assumed recognized at acquisition date | Adjusted Totals ERTC Customer Fixed Totals August 25, refundable claim 2 Asset August 25, 2021 credit 1 Warrant 3 Valuation 4 2021 Total consideration transferred $ 10,163,164 $ 46,256 $ 10,209,420 Recognized amounts of identifiable assets acquired and liabilities assumed: Accounts receivable 1,247,015 1,247,015 Inventory 927,188 927,188 Other current assets 4,323,593 1,093,661 5,417,254 Property, plant, and equipment and right of use assets 15,074,273 897,488 15,971,761 Accounts payable, accrued expenses, and other current liabilities (5,882,048) (164,049) (606,415) (6,652,512) Lease obligations (6,701,286) (6,701,286) Net assets 8,988,735 929,612 (606,415) 897,488 10,209,420 Goodwill 1,174,429 (929,612) 652,671 (897,488) — Total $ 10,163,164 $ — $ 46,256 $ — $ 10,209,420 All measurement period adjustments were offset against goodwill: 1 In calendar year 2021 our Stadco subsidiary filed for a refund of tax credits for $1,093,661 from the IRS under the Employee Retention Credit, or ERC program. Fees associated with the filing totaled $164,049 . 2 Customer claim of $471,166 accrued for additional costs incurred in connection with a certain product manufacturing project. Other adjustments to current liabilities totaled $135,249 . 3 Warrant issued to former shareholder in connection with the acquisition valued at $46,256 . 4 Fixed asset adjustments related to changes in preliminary valuation assumptions and estimates, including estimates of asset useful lives. |
Schedule of pro forma results | Stadco Actual Pro Forma Pro Forma August 25, 2021- Year ended Year ended March 31, 2022 March 31, 2022 March 31, 2021 Net sales $ 7,755,946 $ 27,002,535 $ 30,216,448 Operating loss $ (1,124,542) $ (2,937,391) $ (1,538,197) Loss before income taxes $ (1,233,925) $ (2,151,614) $ (2,199,897) Net loss $ (1,393,987) $ (1,657,666) EPS basic $ (0.04) $ (0.05) EPS dilutive $ (0.04) $ (0.05) Weighted average shares outstanding: – basic and diluted 34,234,957 34,115,873 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Schedule of net sales on a disaggregated basis by market and contract type | The Company’s contract portfolio is comprised of fixed-price contracts and provide for product type sales only. The following table presents net sales on a disaggregated basis by market and contract type: Net Sales by market Defense Industrial Totals Year ended March 31, 2022 $ 20,854,812 $ 1,427,683 $ 22,282,495 Year ended March 31, 2021 $ 12,650,708 $ 2,944,850 $ 15,595,558 Net Sales by contract type Over-time Point-in-time Totals Year ended March 31, 2022 $ 19,992,438 $ 2,290,057 $ 22,282,495 Year ended March 31, 2021 $ 12,869,520 $ 2,726,038 $ 15,595,558 |
Schedule of contract assets | Progress Unbilled payments Total March 31, 2022 $ 14,216,187 $ (5,865,955) $ 8,350,231 March 31, 2021 $ 11,392,948 $ (5,860,540) $ 5,532,408 |
Sales | |
Schedule of revenues from customers who accounted for more than 10% of our net sales | 2022 2021 Customer Amount Percent Amount Percent Customer A $ 4,448,624 20 % $ 2,704,985 17 % Customer B $ 3,534,619 16 % $ 2,682,881 17 % Customer C $ * * % $ 2,308,564 15 % Customer D $ * * % $ 2,145,465 14 % Customer E $ 2,505,205 11 % $ * * % * Less than 10% of total |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
INCOME TAXES | |
Schedule of income (loss) from continuing operations by location | 2022 2021 U.S. operations $ (542,189) $ 435,534 Foreign operations — (10,033) (Loss) income before income taxes (542,189) 425,511 Income tax (benefit) provision (192,355) 104,880 Net (loss) income $ (349,834) $ 320,631 |
Schedule of components of income tax benefit | 2022 2021 Current: Federal $ — $ (76,185) State — — Total Current $ — $ (76,185) Deferred: Federal $ (567,459) $ 148,151 State 375,104 32,914 Total Deferred $ (192,355) $ 181,065 Income tax (benefit) provision $ (192,355) $ 104,880 |
Schedule of reconciliation between federal statutory income tax rate and effective income tax rate | 2022 2021 U.S. statutory income tax $ (113,860) $ 89,358 State income tax, net of federal benefit (70,130) 11,366 Nontaxable PPP loan forgiveness (339,022) — Nondeductible items related to dissolved foreign entity 294,232 — Change in state NOLs 227,037 (10,487) Change in valuation allowance (173,004) 20,484 Stock-based compensation (4,620) (4,830) Other (12,988) (1,011) Income tax (benefit) provision $ (192,355) $ 104,880 Effective tax rate* (35.5) % 24.6 % * Effective tax rate is calculated by dividing the income tax provision by (loss) income before income taxes . |
Summary of the components of deferred income tax assets and liabilities | 2022 2021 Deferred tax assets: Net operating loss carryforward $ 6,099,169 $ 3,571,600 Compensation 191,976 347,742 Stock based compensation awards 234,752 238,120 Other items not currently deductible 322,463 189,728 Depreciation — 38,490 Total deferred tax assets 6,848,360 4,385,680 Valuation allowance (1,953,609) (1,731,100) Net deferred tax assets 4,894,751 2,654,580 Deferred tax liabilities: Depreciation (2,259,094) — Contract accounting methods (508,887) (720,165) Total deferred tax liabilities (2,767,981) (720,165) Deferred taxes, net $ 2,126,770 $ 1,934,415 |
Summary of carryforwards of net operating losses | Begins to Amount Expire: Federal net operating losses $ 17,140,365 2026 State net operating losses $ 37,391,264 2032 |
CAPITAL STOCK and EARNINGS PE_2
CAPITAL STOCK and EARNINGS PER SHARE (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
CAPITAL STOCK and EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share computations | March 31, March 31, 2022 2021 Basic EPS Net (loss) income $ (349,834) $ 320,631 Weighted average shares 32,380,233 29,447,085 Net (loss) income per share $ (0.01) $ 0.01 Diluted EPS Net (loss) income $ (349,834) $ 320,631 Dilutive effect of stock options — 1,588,270 Weighted average shares 32,380,233 31,035,355 Net (loss) income per share $ (0.01) $ 0.01 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
STOCK-BASED COMPENSATION | |
Schedule of information about options granted | Weighted Average Weighted Aggregate Remaining Number Of Average Intrinsic Contractual Life Options Exercise Price Value (in years) Outstanding at 3/31/2020 2,916,000 $ 0.415 $ 2,546,800 6.21 Exercised (150,000) 0.800 Canceled (47,000) Outstanding at 3/31/2021 2,719,000 $ 0.372 $ 2,476,300 5.62 Canceled (49,000) Outstanding at 3/31/2022 2,670,000 $ 0.343 $ 3,597,700 4.66 Vested or expected to vest at 3/31/2022 2,670,000 $ 0.343 $ 3,597,700 4.66 Exercisable and vested at 3/31/2022 2,670,000 $ 0.343 $ 3,597,700 4.66 |
Schedule of exercise price range | Weighted Average Remaining Weighted Weighted Options Contractual Average Options Average Range of Exercise Prices: Outstanding Term Exercise Price Exercisable Exercise Price $0.01-$0.49 1,270,000 3.60 $ 0.12 1,270,000 $ 0.12 $0.50-$1.00 1,400,000 5.15 $ 0.55 1,400,000 $ 0.55 Totals 2,670,000 2,670,000 |
CONCENTRATION OF CREDIT RISK (T
CONCENTRATION OF CREDIT RISK (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Accounts Receivable | |
Concentration of credit risk and major customers | |
Schedule of revenues from customers who accounted for more than 10% of our net sales | March 31, 2022 March 31, 2021 Customer Dollars Percent Dollars Percent A $ 1,079,264 36 % $ * * % B $ 436,051 14 % $ * * % C $ * * % $ 399,692 66 % D $ 382,789 13 % $ * * % E $ 309,500 10 % $ * * % F $ * * % $ 193,368 32 % * less than 10% of total |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
OTHER CURRENT ASSETS | |
Schedule of other current assets | Other current assets included the following as of: March 31, 2022 March 31, 2021 Prepaid taxes $ 26,497 $ — ERC refundable credits 1,093,661 — Prepaid insurance 184,275 312,669 Prepaid subscriptions 66,098 25,967 Payments advanced to suppliers 21,100 17,010 Employee advances 9,668 16,526 Prepaid advisory fees, other 20,160 7,265 Total $ 1,421,459 $ 379,437 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
Schedule of components of property, plant and equipment, net | Property, plant and equipment, net consisted of the following as of: March 31, 2022 March 31, 2021 Land $ 110,113 $ 110,113 Building and improvements 3,289,901 3,249,577 Machinery equipment, furniture, and fixtures 20,860,152 10,695,578 Equipment under finance leases — 45,663 Total property, plant, and equipment 24,260,166 14,100,931 Less: accumulated depreciation (11,107,001) (10,037,722) Total property, plant and equipment, net $ 13,153,165 $ 4,063,209 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | Accrued expenses included the following as of: March 31, 2022 March 31, 2021 Accrued compensation $ 947,938 $ 496,320 Provision for claims 935,382 495,000 Provision for contract losses 340,272 164,164 Accrued professional fees 513,379 213,213 Accrued project costs 487,869 114,611 Contingent consideration 63,436 — Other 147,590 42,962 Total $ 3,435,866 $ 1,526,270 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
DEBT | |
Schedule of outstanding debt obligations | Long-term debt included the following as of: March 31, 2022 March 31, 2021 Stadco Term Loan, at 3.79% interest, due August 2028 $ 3,705,792 $ — Ranor Term Loan, at 5.21% interest, due September 2022 2,363,126 2,466,408 Ranor Revolver Loan, at 2.75% interest, due December 2022 1,287,002 — SBA PPP Loan, at 1% interest, due May 2022 — 1,317,100 Obligations under finance lease — 45,663 Total debt $ 7,355,920 $ 3,829,171 Less: debt issue costs unamortized $ 147,905 $ 12,270 Total debt, net $ 7,208,015 $ 3,816,901 Less: Current portion of long-term debt $ 4,093,079 $ 2,474,963 Total long-term debt, net $ 3,114,936 $ 1,341,938 |
Scheduled principal maturities for our long-term debt | 2023 $ 4,169,426 2024 539,324 2025 560,701 2026 582,630 2027 605,417 Thereafter 898,422 Total $ 7,355,920 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
LEASES | |
Schedule of right-of-use assets and lease liabilities | March 31, 2022 March 31, 2021 Finance lease: Right of use asset – operating lease $ 6,649,744 $ — Right of use asset – finance leases 125,032 45,663 Amortization (391,161) — Right of use asset, net $ 6,383,615 $ 45,663 Lease liability – operating lease $ 6,374,691 $ — Lease liability – finance leases 72,908 45,663 Total lease liability $ 6,447,599 $ 45,663 |
Schedule of supplemental Information of leases | Components of lease expense for the year ended: March 31, 2022 March 31, 2021 Operating lease amortization $ 363,206 $ 3,788 Finance lease amortization $ 27,955 $ 10,875 Finance lease interest $ 1,851 $ 1,275 Weighted average lease term and discount rate at: March 31, 2022 March 31, 2021 Lease term (years) – operating lease 8.25 — Lease term (years) – finance lease 2.48 5.00 Lease rate – operating lease 4.5 % — Lease rate – finance lease 3.9 % 3.2 % |
Schedule of supplemental cash flow information | Supplemental cash flow information related to leases for the year ended: March 31, 2022 March 31, 2021 Cash used in operating activities $ 448,206 $ 5,063 Cash used in financing activities $ 508,806 $ 22,460 |
Schedule of maturities of lease liabilities | 2023 $ 882,581 2024 954,970 2025 948,701 2026 948,701 2027 938,801 Thereafter 2,972,872 Total lease payments $ 7,646,626 Less: imputed interest 1,199,027 Total $ 6,447,599 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
SEGMENT INFORMATION. | |
Summary of financial information for segments | The following table provides summarized financial information for our segments: March 31, 2022 March 31, 2021 Ranor $ 14,580,306 $ 15,595,558 Stadco 7,755,946 — Eliminate intersegment revenue (53,757) — Net sales from external customers $ 22,282,495 $ 15,595,558 Ranor operating income 961,392 1,578,307 Stadco operating loss (1,124,542) — Corporate and unallocated (1) (1,398,379) (955,059) Total operating (loss) income $ (1,561,529) $ 623,248 Interest expense and other expense (297,761) (197,737) Unallocated PPP loan forgiveness 1,317,100 — Consolidated (loss) income before income taxes $ (542,189) $ 425,511 Assets Ranor 10,654,579 13,569,908 Stadco 24,907,656 — Corporate and unallocated 2,290,324 2,434,111 Totals $ 37,852,559 $ 16,004,019 Depreciation and amortization Ranor 595,536 704,049 Stadco 864,903 — Totals $ 1,460,439 $ 704,049 Capital expenditures Ranor 825,608 546,890 Stadco 113,396 — Totals $ 939,004 $ 546,890 (1) Corporate general costs include executive and director compensation, and other corporate administrative expenses not allocated to the segments. |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Cash, Accounts Receivables, and PP&E (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Total available liquidity | $ 3,900,000 | ||
cash and cash equivalents | 1,100,000 | ||
Working capital | 2,800,000 | ||
Undrawn capacity under revolver loan | 2,800,000 | ||
Repayments of Long-term Debt | 397,490 | $ 120,441 | |
capital expenditures | 1,500,000 | ||
Property, plant and equipment, net | |||
Debt increased | 3,500,000 | ||
Line of credit outstanding | $ 300,000 | 1,300,000 | |
Liquidity on Net income loss | 300,000 | 300,000 | |
Total liabilities | $ 22,588,791 | $ 6,062,171 | |
Machinery and equipment | Minimum | |||
Property, plant and equipment, net | |||
Estimated useful lives | 5 years | ||
Machinery and equipment | Maximum | |||
Property, plant and equipment, net | |||
Estimated useful lives | 15 years | ||
Buildings | |||
Property, plant and equipment, net | |||
Estimated useful lives | 30 years | ||
Leasehold improvements | Minimum | |||
Property, plant and equipment, net | |||
Estimated useful lives | 2 years | ||
Leasehold improvements | Maximum | |||
Property, plant and equipment, net | |||
Estimated useful lives | 5 years |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Derivatives, R&D, SG&A, Stock Based Compensation (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Selling, General, and Administrative | ||
Salaries and related expenses | $ 2,484,723 | $ 1,656,053 |
Professional fees | 1,630,151 | 805,304 |
Other general and administrative | 823,212 | 379,679 |
Total Selling, General and Administrative | 4,938,086 | 2,841,036 |
Stock Based Compensation | ||
Stock based compensation cost | $ 190,754 | $ 179,917 |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Mar. 31, 2022 USD ($) | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Amount reclassified from Accumulated Other Comprehensive (Loss) Income to the other (expense) income, net | $ 19,929 |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Estimated fair values of the Company's financial instrument liabilities (Details) | 12 Months Ended |
Mar. 31, 2022 USD ($) | |
Contingent consideration | $ 63,436 |
Stadco | |
Expected volatility | 50% |
Reported Amount [Member] | |
Contingent consideration | $ 63,436 |
Fair Value | |
Contingent consideration | $ 63,436 |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Summary of Changes in Level 3 fair value measurements (Details) | 12 Months Ended |
Mar. 31, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at March 31, 2021 | $ 0 |
Initial measurement at fair value | 113,890 |
Change in fair value recorded in the statement of operations | (50,454) |
Balance at March 31, 2022 | $ 63,436 |
BUSINESS COMBINATION - Assets a
BUSINESS COMBINATION - Assets acquired and liabilities assumed recognized at the acquisition date (Details) - Stadco | Aug. 25, 2021 USD ($) |
Business Acquisition [Line Items] | |
Total consideration transferred | $ 10,163,164 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |
Accounts receivable | 1,247,015 |
Inventory | 927,188 |
Other current assets | 4,323,593 |
Property, plant, and equipment and right of use assets | 15,074,273 |
Accounts payable, accrued expenses, and other current liabilities | (5,882,048) |
Lease obligations | (6,701,286) |
Net assets | 8,988,735 |
Goodwill | 1,174,429 |
Total | 10,163,164 |
Adjustments | |
Business Acquisition [Line Items] | |
Total consideration transferred | 10,209,420 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |
Accounts receivable | 1,247,015 |
Inventory | 927,188 |
Other current assets | 5,417,254 |
Property, plant, and equipment and right of use assets | 15,971,761 |
Accounts payable, accrued expenses, and other current liabilities | (6,652,512) |
Lease obligations | (6,701,286) |
Net assets | 10,209,420 |
Total | 10,209,420 |
ERTC refundable credit | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |
Other current assets | 1,093,661 |
Accounts payable, accrued expenses, and other current liabilities | (164,049) |
Net assets | 929,612 |
Goodwill | (929,612) |
Customer claim | |
Business Acquisition [Line Items] | |
Total consideration transferred | 46,256 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |
Accounts payable, accrued expenses, and other current liabilities | (606,415) |
Net assets | (606,415) |
Goodwill | 652,671 |
Total | 46,256 |
Other | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |
Net assets | 897,488 |
Goodwill | (897,488) |
Fixed Asset Valuation | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |
Property, plant, and equipment and right of use assets | $ 897,488 |
BUSINESS COMBINATION - Proforma
BUSINESS COMBINATION - Proforma results (Details) - USD ($) | 7 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Stadco actual | |||
Net sales | $ 27,002,535 | $ 30,216,448 | |
Operating loss | (2,937,391) | (1,538,197) | |
Loss before income taxes | (2,151,614) | (2,199,897) | |
Net loss | $ (1,393,987) | $ (1,657,666) | |
EPS basic | $ (0.04) | $ (0.05) | |
EPS dilutive | $ (0.04) | $ (0.05) | |
Weighted average shares outstanding - basic | 34,234,957 | 34,115,873 | |
Weighted average shares outstanding - diluted | 34,234,957 | 34,115,873 | |
Stadco | |||
Stadco actual | |||
Net sales | $ 7,755,946 | ||
Operating loss | (1,124,542) | ||
Loss before income taxes | $ (1,233,925) |
BUSINESS COMBINATION - Addition
BUSINESS COMBINATION - Additional information (Details) | 12 Months Ended | ||
Aug. 25, 2021 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) $ / shares shares | Mar. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||
Liability estimated with contingent consideration | $ 63,436 | ||
Acquisition related costs | 320,000 | ||
Other adjustments to current liabilities | 135,249 | ||
Cost of goods sold | 18,905,938 | $ 12,131,274 | |
Selling, general and administrative non-recurring expense | 4,938,086 | 2,841,036 | |
Interest expense | 269,375 | 202,337 | |
Income tax expense (benefit) | (192,355) | 104,880 | |
Depreciation and amortization | 1,460,439 | 704,049 | |
Property, plant and equipment, net | 13,153,165 | 4,063,209 | |
increased other current assets | (354,993) | (226,714) | |
Accrued expenses | $ (1,477,552) | 65,018 | |
Warrants vesting period | 3 years | ||
Exercise Price of Warrants or Rights | $ / shares | $ 1.43 | ||
Fair Value of Warrants | $ 46,256 | ||
Expected volatility | 50 | ||
Volatility | |||
Business Acquisition [Line Items] | |||
Warrants and Rights Outstanding, Measurement Input | 46.7 | ||
Risk Free Interest Rate | |||
Business Acquisition [Line Items] | |||
Warrants and Rights Outstanding, Measurement Input | 0.4 | ||
Customer claim | |||
Business Acquisition [Line Items] | |||
Additional costs accrued with certain product manufacturing project | $ 471,166 | ||
Common Stock | |||
Business Acquisition [Line Items] | |||
Number of shares of common stock and warrants issued for acquired business | shares | 1,466,061 | ||
SPA | |||
Business Acquisition [Line Items] | |||
Shares to be purchased pursuant to agreements | shares | 3,202,727 | ||
Purchase price | $ / shares | $ 1.10 | ||
Securities offering costs | $ 300,000 | ||
Acquisition Sub | Amended and Restated Loan Purchase and Sale Agreement | |||
Business Acquisition [Line Items] | |||
Aggregate payment | 7,900,000 | ||
Stadco | |||
Business Acquisition [Line Items] | |||
Consideration transferred amount | 10,163,164 | ||
Maximum value of contingent consideration | 2,269,000 | ||
Rebate of tax credits | $ 164,049 | ||
Depreciation and amortization | 1,400,000 | ||
Reversal of amortization for asset | 1,200,000 | ||
Fair Value of Warrants | 46,256 | 46,256 | |
Stadco | ERTC refundable credit | |||
Business Acquisition [Line Items] | |||
Refund of tax credits | $ 1,093,661 | ||
Stadco | Customer claim | |||
Business Acquisition [Line Items] | |||
Consideration transferred amount | $ 46,256 | ||
Stadco | Pro Forma | |||
Business Acquisition [Line Items] | |||
Acquisition related costs | 100,000 | ||
Cost, Product and Service [Extensible Enumeration] | Depreciation and amortization | ||
Selling, general and administrative non-recurring expense | $ 300,000 | 400,000 | |
Interest expense | 300,000 | 700,000 | |
Income tax expense (benefit) | 800,000 | 700,000 | |
Depreciation and amortization | 300,000 | ||
Total management fees | $ 700,000 | $ 500,000 | |
Stadco | Common Stock | |||
Business Acquisition [Line Items] | |||
Number of shares of common stock and warrants issued for acquired business | shares | 1,466,061 | ||
Consideration transferred amount | $ 2,300,000 | ||
Stadco | Common Stock | Holders of certain other non-bank indebtness | |||
Business Acquisition [Line Items] | |||
Number of shares of common stock and warrants issued for acquired business | shares | 199,395 | ||
Stadco | Common Stock | Other security holders | |||
Business Acquisition [Line Items] | |||
Number of shares of common stock and warrants issued for acquired business | shares | 600,000 | ||
Issuance of warrant | shares | 100,000 | ||
Stadco | SPA | |||
Business Acquisition [Line Items] | |||
Consideration transferred amount | $ 113,890 | ||
Stadco | Holdco | Common Stock | |||
Business Acquisition [Line Items] | |||
Number of shares of common stock and warrants issued for acquired business | shares | 666,666 |
REVENUE - Disaggregated Basis (
REVENUE - Disaggregated Basis (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer, Including Assessed Tax | $ 22,282,495 | $ 15,595,558 |
Over-time | ||
Revenue from Contract with Customer, Including Assessed Tax | 19,992,438 | 12,869,520 |
Point-in-time | ||
Revenue from Contract with Customer, Including Assessed Tax | 2,290,057 | 2,726,038 |
Defense | ||
Revenue from Contract with Customer, Including Assessed Tax | 20,854,812 | 12,650,708 |
Industrial | ||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,427,683 | $ 2,944,850 |
REVENUE - Net Sales from Custom
REVENUE - Net Sales from Customers (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues | $ 22,282,495 | $ 15,595,558 |
Customer A | Customer Concentration Risk | Sales Revenue, Net | ||
Revenues | $ 4,448,624 | $ 2,704,985 |
Concentration risk percentage | 20% | 17% |
Customer B | Customer Concentration Risk | Sales Revenue, Net | ||
Revenues | $ 3,534,619 | $ 2,682,881 |
Concentration risk percentage | 16% | 17% |
Customer C | Customer Concentration Risk | Sales Revenue, Net | ||
Revenues | $ 2,308,564 | |
Concentration risk percentage | 15% | |
Customer D | Customer Concentration Risk | Sales Revenue, Net | ||
Revenues | $ 2,145,465 | |
Concentration risk percentage | 14% | |
Customer E | Customer Concentration Risk | Sales Revenue, Net | ||
Revenues | $ 2,505,205 | |
Concentration risk percentage | 11% |
REVENUE - Contract Assets and C
REVENUE - Contract Assets and Contract Liabilities (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Contract assets | $ 8,350,231 | $ 5,532,408 |
Unbilled | ||
Contract assets | 14,216,187 | 11,392,948 |
Progress payments | ||
Contract assets | $ (5,865,955) | $ (5,860,540) |
REVENUE - Additional informatio
REVENUE - Additional information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligation Amount | $ 47.3 | |
Revenue Remaining Performance Obligation Completed Less Than 50 | $ 43.7 | |
Revenue, Remaining Performance Obligation, Percentage | 50% | |
Revenue Recognized By Contract Liabilities | $ 0.2 | $ 0.8 |
Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligation Expected Timing of Satisfaction Period | 3 months | |
Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligation Expected Timing of Satisfaction Period | 36 months |
INCOME TAXES - Income tax provi
INCOME TAXES - Income tax provision (benefit) (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
INCOME TAXES | ||
(Loss) income before income taxes | $ (542,189) | $ 425,511 |
Income tax (benefit) provision | (192,355) | 104,880 |
Net (loss) income | (349,834) | 320,631 |
Current | ||
Federal | 0 | (76,185) |
State | 0 | 0 |
Total Current | 0 | (76,185) |
Deferred | ||
Federal | (567,459) | 148,151 |
State | 375,104 | 32,914 |
Total Deferred | (192,355) | 181,065 |
Income tax (benefit) provision | (192,355) | 104,880 |
U.S. operations | ||
INCOME TAXES | ||
(Loss) income before income taxes | $ (542,189) | 435,534 |
Foreign operations | ||
INCOME TAXES | ||
(Loss) income before income taxes | $ (10,033) |
INCOME TAXES - U.S. Federal Sta
INCOME TAXES - U.S. Federal Statutory Rate To Actual Tax Provision (Benefit) For Income Taxes (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
INCOME TAXES | ||
U.S. statutory income tax | $ (113,860) | $ 89,358 |
State income tax, net of federal benefit | (70,130) | 11,366 |
Change in state NOLs, net of federal benefit | 227,037 | (10,487) |
Nontaxable PPP loan forgiveness | (339,022) | |
Nondeductible items related to dissolved foreign entity | 294,232 | |
Stock based compensation | (4,620) | (4,830) |
Change in valuation allowance | (173,004) | 20,484 |
Other | (12,988) | (1,011) |
Income tax (benefit) provision | $ (192,355) | $ 104,880 |
Effective tax rate | (35.50%) | 24.60% |
INCOME TAXES - Deferred Taxes (
INCOME TAXES - Deferred Taxes (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 6,099,169 | $ 3,571,600 |
Compensation | 191,976 | 347,742 |
Stock based compensation awards | 234,752 | 238,120 |
Other items not currently deductible | 322,463 | 189,728 |
Depreciation | 38,490 | |
Total deferred tax assets | 6,848,360 | 4,385,680 |
Valuation allowance | (1,953,609) | (1,731,100) |
Net deferred tax assets | 4,894,751 | 2,654,580 |
Deferred tax liabilities: | ||
Depreciation | (2,259,094) | 0 |
Contract accounting methods | (508,887) | (720,165) |
Total deferred tax liabilities | (2,767,981) | (720,165) |
Deferred taxes, net | $ 2,126,770 | $ 1,934,415 |
INCOME TAXES - Carryforwards an
INCOME TAXES - Carryforwards and Unrecognized Tax Benefits (Details) | Mar. 31, 2022 USD ($) |
Federal | |
Carryforwards of net operating losses and tax credits | |
Net operating losses | $ 17,140,365 |
State | |
Carryforwards of net operating losses and tax credits | |
Net operating losses | $ 37,391,264 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income tax (benefit) provision | $ (192,355) | $ 104,880 |
Percentage of statutory income tax rate | 21% | |
Deferred Tax Assets, Valuation Allowance, Total | $ 1,953,609 | $ 1,731,100 |
Tax Years 2006 And Prior Member | Ranor, Inc. | ||
Net operating losses | 400,000 | |
Tax Years 2007 To Current Member | ||
Net operating losses | 6,900,000 | |
Tax Years Prior to 2021 | ||
Net operating losses | $ 9,800,000 |
CAPITAL STOCK and EARNINGS PE_3
CAPITAL STOCK and EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Basic EPS | ||
Net (loss) income | $ (349,834) | $ 320,631 |
Weighted average shares | 32,380,233 | 29,447,085 |
Net (loss) income per share | $ (0.01) | $ 0.01 |
Diluted EPS | ||
Net (loss) income | $ (349,834) | $ 320,631 |
Dilutive effect of stock options | 1,588,270 | |
Weighted average shares | 32,380,233 | 31,035,355 |
Net (loss) income per share | $ (0.01) | $ 0.01 |
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 49,000 | |
Stock options | ||
Diluted EPS | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 2,720,000 | |
Warrants | ||
Diluted EPS | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 100,000 |
CAPITAL STOCK and EARNINGS PE_4
CAPITAL STOCK and EARNINGS PER SHARE - Additional Information (Details) | Mar. 31, 2022 series shares | Mar. 31, 2021 series shares |
EARNINGS PER SHARE (EPS) | ||
Number of authorized common shares | 90,000,000 | 90,000,000 |
Number of outstanding common shares | 34,307,450 | 29,498,662 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Number of series of preferred stock | series | 1 | 1 |
Shares of preferred stock outstanding | 0 | 0 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Number Of Options | |||
Outstanding at the beginning of the period (in shares) | 2,719,000 | 2,916,000 | |
Exercised (in shares) | (150,000) | ||
Canceled (in shares) | (49,000) | (47,000) | |
Outstanding at the end of the period (in shares) | 2,670,000 | 2,719,000 | 2,916,000 |
Vested or expected to vest at the end of the period (in shares) | 2,670,000 | ||
Exercisable and vested at the end of the period (in shares) | 2,670,000 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 0.372 | $ 0.415 | |
Exercised (in shares) | 0.800 | ||
Outstanding at the end of the period (in dollars per share) | 0.343 | $ 0.372 | $ 0.415 |
Vested or expected to vest at the end of the period (in dollars per share) | 0.343 | ||
Exercisable and vested at the end of the period (in dollars per share) | $ 0.343 | ||
Aggregate Intrinsic Value | |||
Outstanding Value at the beginning of the period | $ 2,476,300 | $ 2,546,800 | |
Outstanding Value at the end of the period | 3,597,700 | $ 2,476,300 | $ 2,546,800 |
Vested or expected to vest at the end of the period | 3,597,700 | ||
Exercisable and vested at the end of the period | $ 3,597,700 | ||
Weighted Average Remaining Contractual Life (in years) | |||
Outstanding at the end of the period | 4 years 7 months 28 days | 5 years 7 months 13 days | 6 years 2 months 15 days |
Vested or expected to vest at the end of the period | 4 years 7 months 28 days | ||
Exercisable and vested at the end of the period | 4 years 7 months 28 days |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock Options Outstanding By Exercise Price (Details) | 12 Months Ended |
Mar. 31, 2022 $ / shares shares | |
Stock Based Compensation By Exercise Price Range | |
Options Outstanding | shares | 2,670,000 |
Options Exercisable | shares | 2,670,000 |
Range One | |
Stock Based Compensation By Exercise Price Range | |
Exercise Price, Lower Range | $ 0.01 |
Exercise Price, Upper Range | $ 0.49 |
Options Outstanding | shares | 1,270,000 |
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 7 months 6 days |
Options Outstanding, Weighted Average Exercise Price | $ 0.12 |
Options Exercisable | shares | 1,270,000 |
Options Exercisable, Weighted Average Exercise Price | $ 0.12 |
Range Two | |
Stock Based Compensation By Exercise Price Range | |
Exercise Price, Lower Range | 0.50 |
Exercise Price, Upper Range | $ 1 |
Options Outstanding | shares | 1,400,000 |
Options Outstanding, Weighted Average Remaining Contractual Term | 5 years 1 month 24 days |
Options Outstanding, Weighted Average Exercise Price | $ 0.55 |
Options Exercisable | shares | 1,400,000 |
Options Exercisable, Weighted Average Exercise Price | $ 0.55 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | 12 Months Ended | ||||||
Jan. 24, 2022 | Oct. 05, 2021 | Sep. 17, 2021 | Sep. 01, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Share based compensation | |||||||
Unrecognized compensation cost related to stock options | $ 0 | ||||||
Maximum contractual term (in years) | 4 years 7 months 28 days | 5 years 7 months 13 days | 6 years 2 months 15 days | ||||
Stock based compensation cost | $ 190,754 | $ 179,917 | |||||
Stock based compensation expense | $ 190,754 | $ 179,917 | |||||
Fair value number of shares expected to vest | $ 34,000 | ||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected term | 5 years | ||||||
Exercise price of warrants | $ 1.43 | ||||||
Warrant valuation | $ 46,256 | ||||||
Expected life - years | 5 years | ||||||
Stock issued for finder's fee (in shares) | 20,000 | ||||||
Stock issued for finder's fee | $ 35,000 | ||||||
Stadco | |||||||
Share based compensation | |||||||
Expected volatility | 50% | ||||||
Restricted Stock | |||||||
Share based compensation | |||||||
Granted a total of shares of restricted stock | 100,000 | ||||||
Stock based compensation cost | $ 134,000 | ||||||
Stock based compensation expense | $ 155,754 | ||||||
Total unrecognized compensation cost related to restricted stock awards | $ 109,079 | ||||||
Service-based restricted stock one | |||||||
Share based compensation | |||||||
Granted a total of shares of restricted stock | 100,000 | ||||||
Service-based restricted stock two | |||||||
Share based compensation | |||||||
Stock based compensation cost | $ 175,000 | ||||||
2016 Plan | |||||||
Share based compensation | |||||||
Shares available for grant | 1,350,000 | ||||||
Shares reserved | 5,000,000 | ||||||
Maximum | |||||||
Share based compensation | |||||||
Maximum contractual term (in years) | 10 years | ||||||
Maximum | 2016 Plan | |||||||
Share based compensation | |||||||
Number of shares of common stock | 5,000,000 | ||||||
Executive Officers | 2016 Plan | |||||||
Share based compensation | |||||||
Restricted stock award (in shares) | 20,000 | ||||||
Stock issued for finder's fee | $ 35,000 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details) | 12 Months Ended | |
Mar. 31, 2022 USD ($) customer | Mar. 31, 2021 USD ($) | |
Concentration of credit risk and major customers | ||
Accounts receivable | $ 3,009,249 | $ 608,059 |
Accounts Receivable | Customer Concentration Risk | Customers | ||
Concentration of credit risk and major customers | ||
Concentration risk percentage | 10% | |
Accounts Receivable | Customer Concentration Risk | Customer A | ||
Concentration of credit risk and major customers | ||
Accounts receivable | $ 1,079,264 | |
Concentration risk percentage | 36% | |
Accounts Receivable | Customer Concentration Risk | Customer B | ||
Concentration of credit risk and major customers | ||
Accounts receivable | $ 436,051 | |
Concentration risk percentage | 14% | |
Accounts Receivable | Customer Concentration Risk | Customer C | ||
Concentration of credit risk and major customers | ||
Accounts receivable | $ 399,692 | |
Concentration risk percentage | 66% | |
Accounts Receivable | Customer Concentration Risk | Customer D | ||
Concentration of credit risk and major customers | ||
Accounts receivable | $ 382,789 | |
Concentration risk percentage | 13% | |
Accounts Receivable | Customer Concentration Risk | Customer E | ||
Concentration of credit risk and major customers | ||
Accounts receivable | $ 309,500 | |
Concentration risk percentage | 10% | |
Accounts Receivable | Customer Concentration Risk | Customer F | ||
Concentration of credit risk and major customers | ||
Accounts receivable | $ 193,368 | |
Concentration risk percentage | 32% | |
Trade Receivables | ||
Concentration of credit risk and major customers | ||
Number of significant customers | customer | 4 | |
Trade Receivables | Customer Concentration Risk | Customer A,C,D | ||
Concentration of credit risk and major customers | ||
Concentration risk percentage | 73% |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
OTHER CURRENT ASSETS | ||
Prepaid taxes | $ 26,497 | |
ERC refundable credits | 1,093,661 | |
Prepaid insurance | 184,275 | $ 312,669 |
Prepaid subscriptions | 66,098 | 25,967 |
Payments advanced to suppliers | 21,100 | 17,010 |
Employee advances | 9,668 | 16,526 |
Prepaid advisory fees, other | 20,160 | 7,265 |
Total | $ 1,421,459 | $ 379,437 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Property, Plant and Equipment, Net | ||
Total property, plant and equipment | $ 24,260,166 | $ 14,100,931 |
Less: accumulated depreciation | (11,107,001) | (10,037,722) |
Total property, plant and equipment, net | 13,153,165 | 4,063,209 |
Land | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, Gross | 110,113 | 110,113 |
Building and improvements | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, Gross | 3,289,901 | 3,249,577 |
Machinery equipment, furniture, and fixtures | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, Gross | $ 20,860,152 | 10,695,578 |
Equipment under finance leases | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, Gross | $ 45,663 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
ACCRUED EXPENSES | ||
Accrued compensation | $ 947,938 | $ 496,320 |
Provision for claims | 935,382 | 495,000 |
Provision for contract losses | 340,272 | 164,164 |
Accrued professional fees | 513,379 | 213,213 |
Accrued project costs | 487,869 | 114,611 |
Contingent consideration | 63,436 | |
Other | 147,590 | 42,962 |
Total | 3,435,866 | $ 1,526,270 |
contingent loss | $ 800,000 |
DEBT - Long-term Debt (Details)
DEBT - Long-term Debt (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Long-term Debt | ||
Total debt | $ 7,355,920 | $ 3,829,171 |
Less: debt issue costs unamortized | 147,905 | 12,270 |
Total debt, net | 7,208,015 | 3,816,901 |
Less: Current portion of long-term debt | 4,093,079 | 2,474,963 |
Total long-term debt, net | 3,114,936 | 1,341,938 |
Stadco Term Loan at 3.79% interest, due August 2028. | ||
Long-term Debt | ||
Total debt | $ 3,705,792 | |
Interest rate (as a percent) | 3.79% | |
Ranor Term Loan, at 5.21% interest, due September 2022 | ||
Long-term Debt | ||
Total debt | $ 2,363,126 | $ 2,466,408 |
Interest rate (as a percent) | 5.21% | 5.21% |
Ranor Revolver Loan, at 2.75% interest, due December 2022 | ||
Long-term Debt | ||
Total debt | $ 1,287,002 | |
Interest rate (as a percent) | 2.75% | 2.75% |
SBA PPP loan at 1% interest, due May 2022 | ||
Long-term Debt | ||
Total debt | $ 1,317,100 | |
Interest rate (as a percent) | 1% | |
Finance lease liability | ||
Long-term Debt | ||
Obligations under finance lease | $ 45,663 |
DEBT - Scheduled principal matu
DEBT - Scheduled principal maturities for our long-term debt (Details) | Mar. 31, 2022 USD ($) |
Long-Term Debt, Fiscal Year Maturity [Abstract] | |
2023 | $ 4,169,426 |
2024 | 539,324 |
2025 | 560,701 |
2026 | 582,630 |
2027 | 605,417 |
Thereafter | 898,422 |
Total | $ 7,355,920 |
DEBT - Small Business Administr
DEBT - Small Business Administrative PPP loan (Details) - Paycheck Protection Program - USD ($) | May 12, 2021 | Mar. 31, 2021 | May 08, 2020 |
Debt | |||
Face amount of debt | $ 1,317,100 | ||
Principal amount forgiven | $ 1,317,000 | ||
Interest amount for forgiveness | $ 13,207 | ||
Unamortized closing costs | $ 3,875 |
DEBT - Additional Information (
DEBT - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Aug. 25, 2021 USD ($) | Dec. 21, 2016 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||
Proceeds from term loan | $ 4,000,000 | |||
Late fee (in percent) | 5 | |||
Default interest rate | 5 | |||
Debt amount | $ 7,355,920 | |||
Revolver loan | ||||
Debt Instrument [Line Items] | ||||
Interest payments | 17,066 | $ 6,664 | ||
Ranor, Inc. | ||||
Debt Instrument [Line Items] | ||||
Unamortized closing costs | 76,288 | $ 26,272 | ||
Berkshire Loan | ||||
Debt Instrument [Line Items] | ||||
Annual capital expenditure | $ 1,500,000 | |||
Debt Instrument Covenant Loan To Value Ratio | 0.75 | |||
Berkshire Loan | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum Amount Of Borrowing Base Required To Grant Loan Advance | $ 5,000,000 | |||
Debt Instrument Percentage Of Accounts Receivable Used For Determination Of Aggregate Amount Of Advances | 80% | |||
Debt Instrument Percentage Of Eligible Raw Material Used For Determination Of Aggregate Amount Of Advances | 25% | |||
Amount Included In Sum To Calculate Maximum Borrowing Base | $ 250,000 | |||
Berkshire Loan | Revolver loan | ||||
Debt Instrument [Line Items] | ||||
Maximum Amount Of Borrowing Base Required To Grant Loan Advance | $ 5,000,000 | |||
Amount outstanding | $ 1,300,000 | |||
Nonrefundable Commitment Fee percentages | 0.25% | |||
Adjusted interest rate (as a percent) | 2.75% | |||
Berkshire Loan | Revolver loan | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Adjusted interest rate (as a percent) | 2.75% | |||
Basis spread on variable rate (as a percent) | 70% | |||
Berkshire Loan | Secured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 2,400,000 | |||
Maturity term | 60 months | |||
Debt instrument, Periodic Payment | $ 19,260 | |||
Interest rate (as a percent) | 5.21% | |||
Berkshire Loan | Notes Payable, Other Payables | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument Percentage Of Appraised Value Of Equipment For Determination Of Aggregate Amount Of Advances | 80% | |||
Berkshire Loan | Ranor, Inc. | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument Covenant Trailing Period For Measurement Of Loan To Value Ratio | 365 days | |||
Berkshire Loan | Ranor, Inc. | Secured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 2,850,000 | |||
Berkshire Loan | Maximum | ||||
Debt Instrument [Line Items] | ||||
Cash flow ratio of debt service | 1.20 | |||
Debt Instrument Covenant Leverage Ratio Year One | 2.50 | |||
Berkshire Loan | Minimum | ||||
Debt Instrument [Line Items] | ||||
Cash flow ratio of debt service | 1 | |||
Debt Instrument Covenant Leverage Ratio Year One | 1 | |||
Stadco Term Loan at 3.79% interest, due August 2028 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 4,000,000 | |||
Maturity term | 7 years | |||
Debt instrument, Periodic Payment | $ 54,390 | |||
Stadco Term Loan at 3.79% interest, due August 2028 | FHLBBC advance rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 2.25% | |||
Stadco Term Loan at 3.79% interest, due August 2028 | Ranor, Inc. | Revolver loan | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 4,000,000 | |||
Stadco Term Loan at 2.25% interest, due August 2028 | ||||
Debt Instrument [Line Items] | ||||
Unamortized Debt Issuance Expense | $ 71,617 | |||
Ranor term loan | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate (as a percent) | 2.75% | 2.67% | ||
Unused borrowing capacity | $ 2,700,000 | |||
Unused borrowing capacity | $ 2,800,000 | |||
Ranor term loan | Ranor, Inc. | Revolver loan | ||||
Debt Instrument [Line Items] | ||||
Proceeds from term loan | $ 2,850,000 |
OTHER NONCURRENT LIABILITY - Ad
OTHER NONCURRENT LIABILITY - Additional Information (Details) | Mar. 31, 2022 USD ($) |
OTHER NONCURRENT LIABILITY. | |
Other noncurrent liability | $ 305,071 |
LEASES (Details)
LEASES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | |
Other lease assets and liabilities | $ 6,600,000 | ||
Lessee operating lease renewal term | 1 year | ||
Right of use asset - finance lease | 6,383,615 | ||
Lease liability - finance lease | 6,447,599 | ||
Office space | |||
Operating lease cost | $ 4,000 | ||
Building and property lease | |||
Monthly payments | $ 78,233 | ||
Percentage of discount on base rent | 20% | ||
Right of use asset - operating lease | $ 6,649,744 | ||
Right of use asset - finance lease | 125,032 | $ 45,663 | |
Amortization | (391,161) | ||
Right of use asset, net | 6,383,615 | 45,663 | |
Lease liability - operating lease | 6,374,691 | ||
Lease liability - finance lease | 72,908 | 45,663 | |
Total lease liability | $ 6,447,599 | $ 45,663 |
LEASES - Other supplemental inf
LEASES - Other supplemental information of Leases (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
LEASES | ||
Operating lease amortization | $ 363,206 | $ 3,788 |
Finance lease amortization | 27,955 | 10,875 |
Finance lease interest | $ 1,851 | $ 1,275 |
Lease term (years) - operating lease | 8 years 3 months | 0 years |
Lease term (years) - finance lease | 2 years 5 months 23 days | 5 years |
Lease rate - operating lease | 4.50% | |
Lease rate - finance lease | 3.90% | 3.20% |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
LEASES | ||
Cash used in operating activities | $ 448,206 | $ 5,063 |
Cash used in financing activities | $ 508,806 | $ 22,460 |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) | Mar. 31, 2022 USD ($) |
Maturities of lease liabilities | |
2023 | $ 882,581 |
2024 | 954,970 |
2025 | 948,701 |
2026 | 948,701 |
2027 | 938,801 |
Thereafter | 2,972,872 |
Total lease payments | 7,646,626 |
Less: imputed interest | 1,199,027 |
Total | $ 6,447,599 |
COMMITMENTS (Details)
COMMITMENTS (Details) - USD ($) | 12 Months Ended | ||
May 10, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Contractual commitments | |||
Aggregate commitment for future executive salaries and bonus | $ 600,000 | ||
Aggregate commitment for accrued payroll, vacation and holiday | 900,000 | ||
Defined Contribution Plan, Cost | 89,316 | $ 85,359 | |
Purchase obligations outstanding to purchase raw materials and supplies at fixed prices | $ 5,800,000 | ||
Payments made | $ 495,000 |
SEGMENT INFORMATION - Financial
SEGMENT INFORMATION - Financial information for segments (Details) | 12 Months Ended | |
Mar. 31, 2022 USD ($) item | Mar. 31, 2021 USD ($) | |
SEGMENT INFORMATION | ||
Number of reportable segment | item | 2 | |
Net sales from external customers | $ 22,282,495 | $ 15,595,558 |
Total operating (loss) income | (1,561,529) | 623,248 |
Interest expense and other expense | (297,761) | (197,737) |
Unallocated PPP loan forgiveness | 1,317,100 | |
Consolidated (loss) income before income taxes | (542,189) | 425,511 |
Assets | 37,852,559 | 16,004,019 |
Depreciation and amortization | 1,460,439 | 704,049 |
Capital expenditures | 939,004 | 546,890 |
Eliminate intersegment revenue | ||
SEGMENT INFORMATION | ||
Net sales from external customers | (53,757) | |
Corporate and unallocated | ||
SEGMENT INFORMATION | ||
Total operating (loss) income | (1,398,379) | (955,059) |
Assets | 2,290,324 | 2,434,111 |
Ranor, Inc. | ||
SEGMENT INFORMATION | ||
Net sales from external customers | 14,580,306 | 15,595,558 |
Total operating (loss) income | 961,392 | 1,578,307 |
Assets | 10,654,579 | 13,569,908 |
Depreciation and amortization | 595,536 | 704,049 |
Capital expenditures | 825,608 | $ 546,890 |
Stadco | ||
SEGMENT INFORMATION | ||
Net sales from external customers | 7,755,946 | |
Total operating (loss) income | (1,124,542) | |
Assets | 24,907,656 | |
Depreciation and amortization | 864,903 | |
Capital expenditures | $ 113,396 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Forecast - Employee Retention Credit Program - Stadco | 3 Months Ended |
Jun. 30, 2022 USD ($) item | |
Executive Officers | |
Subsequent Event [Line Items] | |
Tax credit received from IRS | $ | $ 746,453 |
Subsequent event | |
Subsequent Event [Line Items] | |
Number of payments received | item | 2 |