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v3.25.2

DEBT | 3 Months Ended
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Jun. 30, 2025
DEBT |
DEBT | NOTE 11 – DEBT ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Long-term debt included the following as of: |  | June 30, 2025 |  | March 31, 2025
Stadco Term Loan, at 3.79% interest, due August 2028 | ​ | $ | 1,943 | ​ | $ | 2,086
Ranor Term Loan, at 6.05% interest, due December 2027 | ​ | ​ | 2,134 | ​ | ​ | 2,151
Ranor Revolver Loan, due August 2025 | ​ | ​ | 1,664 | ​ | ​ | 3,150
Stadco equipment financing, at 13.38% interest, due April 2026 | ​ | ​ | 29 | ​ | ​ | 37
Total debt | ​ | $ | 5,770 | ​ | $ | 7,424
Less: debt issue costs unamortized | ​ | $ | 56 | ​ | $ | 68
Total debt, net | ​ | $ | 5,714 | ​ | $ | 7,356
Less: Current portion of long-term debt | ​ | $ | 5,714 | ​ | $ | 7,353
Total long-term debt, net | ​ | $ | — | ​ | $ | 3
​ 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 $4,000. The proceeds of the original Ranor Term Loan of $2,850 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 used to support the acquisition of Stadco and refinance existing indebtedness of Stadco. Since December 20, 2021, Ranor and certain affiliates of the Company entered into eleven separate amendments to the Amended and Restated Loan Agreement and First Amendment to Promissory Note to extend the maturity date of the Ranor Term Loan and Revolver Loan to December 15, 2027 and August 29, 2025, respectively. Stadco Term Loan On August 25, 2021, Stadco borrowed $4,000 from Berkshire Bank, or the “Stadco Term Loan”, under the Loan Agreement. Interest on the Stadco Term Loan is due on unpaid balances 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 has made and will continue to make monthly payments of principal and interest in the amount of $54, with all remaining 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. Unamortized debt issue costs on June 30, 2025 and March 31, 2025 were $16 and $18, respectively. Ranor Term Loan and Revolver Loan A term loan was made to Ranor by Berkshire Bank in 2016 in the amount of $2,850, or the “Ranor Term Loan”. Payments are made in monthly installments of $17 each, inclusive of interest at a fixed rate of 6.05% per annum, with all outstanding principal and accrued interest due and payable on December 15, 2027. 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) $4,500, 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. Interest-only payments on advances made under the Revolver Loan will continue to be payable monthly in arrears. Under the amended promissory note for the Revolver Loan, the Company pays interest at the Term SOFR-based rate. Paid and accrued interest expense under the Revolver Loan during the three months ended June 30, 2025 and 2024 was $53 and $56, respectively. The weighted average interest rate as of June 30, 2025 and March 31, 2025 was 6.93% and 7.47%, respectively. The weighted average amount outstanding during the three months ended June 30, 2025 was $2,991. There was $1,664 outstanding under the Revolver Loan as of June 30, 2025. Unused borrowing capacity as of June 30, 2025 and March 31, 2025 was $1,949 and $1,256, respectively. Unamortized debt issue costs on June 30, 2025 and March 31, 2025 were $40 and $50, respectively. Berkshire Loan Covenants For purposes of this discussion, Ranor and Stadco are referred to together as the “Borrowers”. The Company agreed to maintain compliance with certain financial covenants under the Loan Agreement. Namely, 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, or annual period of TechPrecision on a trailing 12-month basis. 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 60 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 120 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 stockholders or owners of TechPrecision, less (vii) cash taxes paid by the TechPrecision, all as determined in accordance with U.S. GAAP. “Total Debt Service” means 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. For purposes of this covenant, “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 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 not in compliance with certain debt covenants as of June 30, 2025 and March 31, 2025. It is also probable that the Company will not be in compliance with the same debt covenants at subsequent measurement dates within the next twelve months. As a result of the above, all of our long-term debt has been classified as current in our consolidated balance sheet. 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 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 carrying value of short and long-term borrowings approximates their fair value. Stadco Equipment Financing Stadco entered into a two-year equipment financing agreement dated May 1, 2024 to purchase certain computer hardware for $65. On the last day of each month, Stadco will make monthly payments of $3, with all remaining outstanding amounts due and payable on April 30, 2026.

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