NOTE 1 - DESCRIPTION OF BUSINESS

 

TechPrecision Corporation, or TechPrecision, is a Delaware corporation organized in February 2005 under the name Lounsberry Holdings II, Inc. The name was changed to TechPrecision Corporation on March 6, 2006. TechPrecision is the parent company of Ranor, Inc., or Ranor, a Delaware corporation and Wuxi Critical Mechanical Components Co., Ltd., or WCMC, a wholly foreign owned enterprise (WFOE). TechPrecision, WCMC and Ranor are collectively referred to as the “Company”, “we”, “us” or “our”.

 

We manufacture large scale metal fabricated and machined precision components and equipment. These products are used in a variety of markets including the defense, nuclear, medical, commercial, and aerospace industries.

 

Liquidity

 

Prior to fiscal 2016 there were certain conditions and events that raised doubt about our ability to continue as a going concern. Certain negative financial trends such as recurring operating losses, contract losses, working capital deficiencies, and negative cash flows from operating activities have occurred. The negative financial trends have been abated during fiscal 2016.

 

We plan to closely monitor our expenses and, if required, will further reduce operating costs and capital spending to enhance liquidity. We must continue to replenish our backlog and continue to focus on recurring unit of delivery projects that result in a more predictable revenue stream and delivery dates. We must continue to maintain our operating expenses at a level in line with current business conditions in order to increase profit margins and decrease the amount of cash used in operations. A delay in deliveries or cancellations of orders can have an unfavorable impact on liquidity, cause us to have inventories in excess of our short-term needs, and delay our ability to recognize, or prevent us from recognizing, revenue on contracts in our order backlog.

 

At March 31, 2016, we had cash and cash equivalents of $1.3 million, of which $8,115 is located in China and may not be able to be repatriated for use in the United States without undue cost or expense, if at all. On April 26, 2016, we refinanced our Loan and Security Agreement, or LSA, with a new lender at a lower rate of interest. See Note 17 — Subsequent Events for additional disclosures regarding our refinancing. We believe that we will have sufficient cash to fund our operations, capital expenditures and principal and interest payments under our debt obligations through the twelve months from the date of our financial statements.