New Century Companies, Inc. and its wholly owned subsidiary, New Century Remanufacturong,Remanufacturing, Inc., (collectively, the "Company"), a California corporation, was incorporated March 1996 and is located in Southern California. The Company provides after-market services, including rebuilding, retrofitting and remanufacturing of metal cutting machinery. Once completed, a remanufactured machine is "like new" with state-of-the-art computers and the cost to the Company's customers is substantially less than the price of a new machine.

The Company currently sells its services by direct sales and through a network of machinery dealers across the United States. Its customers are generally medium to large sized manufacturing companies in various industries where metal cutting is an integral part of their businesses. The Company grants credit to its customers who are predominately located in the western United States.

The Company trades on the OTC Bulletin Board under the symbol "NCNC.OB""NCNC ".

On October 9, 2009, the Company entered into a share exchange agreement with Precision Aerostructures, Inc. ("PAI") pursuant to which the sole shareholder of PAI agreed to transfer all capital stock of PAI to the Company (see Note 6).  The Company and PAI are currently in the process of determining and settling the final acquisition price.  PAI is a world class supplier of precision machined details and assemblies for many of the major aircraft builders in the United States and around the world. PAI specializes in engineering, and manufacturing of precision CNC machined multi-axis structural aircraft components. PAI’s production facility is in Rancho Cucamonga, CA. The share exchange was consummated on October 9, 2009.

The condensed consolidated financial statements include the accounts of New Century Companies, Inc. and its wholly owned subsidiary, New Century Remanufacturing, Inc..Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such SEC rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements and the notes hereto should be read in conjunction with the financial statements, accounting policies and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC. In the opinion of management, all adjustments necessary to present fairly, in accordance with GAAP, the Company's financial position as of March 31,September 30, 2009, and the results of operations and cash flows for the interim periods presented, have been made.  Such adjustments consist only of normal recurring adjustments.  The results of operations for the three and nine months ended March 31,September 30, 2009 are not necessarily indicative of the results for the full year ending December 31, 2009. Amounts related to disclosure of December 31, 2008 balances within these interim condensed consolidated financial statements were derived from the audited 2008 consolidated financial statements and notes thereto.

The statement of operations for the three and nine months ended September 30, 2008 and the statement of cash flows for the threenine months ended March 31,September 30, 2008 included herein were restated to reflect the effect of changes to the original accounting for the 12% CAMOFI Note issued in February 2006.  The original accounting did not record the separate derivative liability for the conversion option and warrants in accordance with FAS 133, “Accounting for Derivative Instruments and Hedging Activities” and EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled In, a Company’s Own Stock.”U.S. accounting standards. For additional information regarding the restatement, see Note 6 of the condensed consolidated financial statements on Form 10-Q for the three months ended March 31, 2009 included herein5 and see Note 11 to our Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

The Company has reclassified the presentation of current prior-year information to conform to the current presentation.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31,September 30, 2009, the Company has an accumulated deficit of approximately $16,701,824,$37,064,000, had recurring losses, a working capital deficit of approximately $8,485,264,$29,163,000, and was also in default on two of its convertible notes. These factors among others, raise substantial doubt about the Company's ability to continue as a going concern. The Company intends to fund operations through anticipated increased sales along with renegotiated or new debt and equity financing arrangements which management believes may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2009. Therefore, the Company will be required to seek additional funds to finance its long-term operations.  The successful outcome of future activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.

Inventories are stated at the lower of cost or net realizable value. Cost is determined under the first-in, first-out method. Inventories represent cost of work in process on units not yet under contract. Cost includes all direct material and labor, machinery, subcontractors and allocations of indirect overhead.  TheAt each balance sheet date, the Company hadevaluates its ending inventories for excess quantities and obsolescence. Among other factors, the Company considers historical demand and forecasted demand in relation to the inventory reserves approximating $577,000on hand and $533,000 at March 31, 2009,market conditions when determining obsolescence and December 31, 2008, respectively.net realizable value. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventories.

The Company's revenues consist primarily of contracts with customers. The Company uses the percentage-of-completion method of accounting to account for long-term contracts pursuant to Statements of Position 81-1, “Accounting for Performance of Construction-Type and Certain Production-Type Contracts”,U.S. accounting standards, and, therefore, takes into account the cost, estimated earnings and revenue to date on fixed-fee contracts not yet completed. The percentage-of-completion method is used because management considers total cost to be the best available measure of progress on the contracts. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term.  The Company recognizes revenue on contracts.

For contracts, the amount of revenue recognized at the financial statement date is the portion of the total contract price that the cost expended to date bears to the anticipated final cost, based on current estimates of cost to complete. It is not related to the progress billings to customers. Contract costs include all materials, direct labor, machinery, subcontract costs and allocations of indirect overhead.

Because contracts may extend over a period of time, changes in job performance, changes in job conditions and revisions of estimates of cost and earnings during the course of the work are reflected in the accounting period in which the facts that require the revision become known. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is recognized in the financial statements.

Contracts that are substantially complete are considered closed for financial statement purposes. Costs incurred and revenue earned on contracts in progress in excess of billings (under billings) are classified as a current asset. Amounts billed in excess of costs and revenue earned (over billings) are classified as a current liability.

The Company accounts for shipping and handling fees and costs in accordance with Emerging Issues Task Force ("EITF") Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs."U.S accounting standards. Shipping and handling fees and costs incurred by the Company are immaterial to the operations of the Company and are included in cost of sales.

In accordance with Statements of Financial Accounting Standards ("SFAS") No. 48, "Revenue Recognition when Right of Return Exists,"U.S. accounting standards, revenue is recorded net of an estimate for markdowns, price concessions and warranty costs. Such reserve is based on management's evaluation of historical experience, current industry trends and estimated costs. As of March 31,September 30, 2009, the Company estimated the markdowns, price concessions and warranty costs and concluded amounts are immaterial and did not record any adjustment to revenues.

Basic net earnings (loss)loss per share is computed by dividing net income (loss)loss by the weighted average number of common shares outstanding for the period. Diluted net income (loss)loss per share is computed by dividing net loss by the weighted average number of common shares and dilutive common stock equivalents outstanding for each respective period.

Common stock equivalents, representing convertible Preferred Stock, convertible debt, options and warrants totaling approximately 53,887,000132,360,000 and 10,101,000 shares at March 31,September 30, 2009 and 2008, respectively, are not included in the diluted loss per share as they would be anti-dilutive. Common stock equivalents, representing convertible Preferred Stock, convertible debt, options and warrants totaling approximately 41,982,000 are included in the diluted loss per share at March 31, 2008.

From time to time, the Company's Board of Directors grants common share purchase options or warrants to selected directors, officers, employees, consultants and advisors in payment of goods or services provided by such persons on a stand-alone basis outside of any of the Company's formal stock plans. The terms of these grants are individually negotiated and generally expire within five years from the grant date.

Under the terms of the Company's 2000 Stock Option Plan, options to purchase an aggregate of 5,000,000 shares of common stock may be issued to officers, key employees and consultants of the Company. The exercise price of any option generally may not be less than the fair market value of the shares on the date of grant. The term of each option generally may not be more than five years.

There areis no share-based compensation resulting from the application of SFAS No. 123-R to options granted outside of the Company's Stock Option Plan for the three and nine months ended March 31,September 30, 2009 and 2008. Share-based compensation recognized as a result of the adoption of SFAS No. 123-R use the Black Scholes option pricing model for estimating fair value of options granted.

In accordance with SFAS No. 123-R,U.S. accounting standards, the Company’s policy is to adjust share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization after December 31, 2007 is recognized in the period the forfeiture estimate is changed.

The fair value of stock-based awards to employees and directors is calculated using the Company estimated (usingBlack-Scholes option pricing model, even though the Black Scholes pricing model)model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restriction, which differ significantly from the Company's stock options. The Black-Scholes model also requires subjective assumptions regarding future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and no variance has been found. Therefore,post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the effectU.S. Treasury rate that corresponds to the pricing term of forfeiture adjustments at the period ended March 31, 2009 was not applicable.grant effective as of the date of the grant. The expected volatility is based on the historical volatility of our common stock. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods.

a) For transactions where goods have already been delivered or services rendered, the equity instruments are issued on or about the date the performance is complete (and valued on the date of issuance).

b) For transactions where the instruments are issued on a fully vested, non-forfeitable basis, the equity instruments are valued on or about the date of the contract.

c) For any transactions not meeting the criteria in (a) or (b) above, the Company re-measures the consideration at each reporting date based on its then current stock value.

Direct costs of securing debt financing are capitalized and amortized over the term of the related debt. When a loan is paid in full, any unamortized financing costs are removed from the related accounts and charged to operations. During the three months ended March 31,September 30, 2009 and 2008, the Company amortized approximately $80,000$103,000 and $90,000,$35,000, respectively, to interest expense.

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. For the Company, Level 1 inputs include quoted prices on the Company’s securities that are actively traded.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly. For the Company, Level 2 inputs include assumptions such as estimated life, risk free rate and volatility estimates used in determining the fair values of the Company’s option and warrant securities issued.

Level 3: Unobservable inputs for the asset or liability. Beginning January 1, 2009, Level 3 inputs may be required for the determination of fair value associated with certain nonrecurring measurements of nonfinancial assets and liabilities. The Company does not currently present any nonfinancial assets or liabilities at fair value.

In December 2007,the third quarter of 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financialthe FASB Accounting Standards (“SFAS”) No. 141R, “Business Combinations” (“SFAS 141R”Codification (the “Codification”). SFAS 141R establishesThe Codification is the source of authoritative accounting principles and requirements for how an acquirer in a business combination: 1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; 2) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and 3) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for business combinations beginning the first annual reporting period on or after December 15, 2008. Therefore, the Company expects to adopt SFAS 141R for any business combinations entered into beginning in 2009.

ASUs are not authoritative in their own right. The adoption of this Statement isCodification does not expected tochange GAAP and did not have a material impactan effect on the Company’s consolidated financial position or results of operations.

The Company’s convertible debt financing, Amended 12% CAMOFI Master LDC (“CAMOFI”) Convertible Note (“Amended 12% CAMOFI Note) and 15% CAMHZN Master LDC (“CAMZHN”) Convertible Note (“15% CAMHZN Note”), are in default.  The last monthly contractual payment on the CAMOFI note was made in October 2008 and no payments have made on the CAMHZN Note which were scheduled to begin on September 1, 2008.  The Convertible Notes aggregate to $3,784,271As a result, the Company is in default on these two loans, with an aggregated balance of principal and interest.accrued interest of $4,010,156 at September 30, 2009.  As of March 31,September 30, 2009 and December 31, 2008, the principal balances, accrued interest and the debt discounts are presented in the Convertible Debt Table, bellow.below.

During the three months ended March 31,September 30, 2009 and 2008, the Company amortized debt discounts of approximately $333,000$388,000 and $252,000,$85,146, respectively, to interest expense related to the 12% and 15% Convertible Notes. During the nine months ended September 30, 2009 and 2008, the Company amortized debt discounts of approximately $1,164,000 and $892,000, respectively, to interest expense related to the 12% and 15% Convertible Notes.

The Convertible Debt and Warrant Agreements include an anti-dilution feature and a buy-in clause which cause the embedded conversion option and the warrants to be treated as derivative liabilities.liabilities which are fair valued on a quarterly basis and the resulting change in fair value of the derivative liabilities are recorded as a gain or loss upon valuation in the statement of operations.

In connection with the Amended 12% CAMOFI Note, the Company issued 725,000 five year warrants with an exercise price of $0.10 and 725,000 five year warrants with an exercise price of $0.20.  Due to the anti-dilution feature in the warrant agreements, the warrants have a reduced exercise price of $.07$0.04 at September 30, 2009 and $0.07 at December 31, 2008, and adjusted total warrants of 5,625,000 and 3,214,286 at March 31,September 30, 2009 and December 31, 2008.2008, respectively.  As of March 31,September 30, 2009 and December 31, 2008, the fair value of the warrant derivative liability was determined to be $257,143$1,105,472 and 119,369$151,400 respectively.   AUpon valuation, a loss upon valuation of $105,743$896,599 was recorded for the three months ended March 31,September 30, 2009.

In connection with the 15% CAMHZN Note, the Company issued 1,000,000 seven year warrants with an exercise price of $.07.$0.07.  Due to the anti-dilution feature in the warrant agreements, the warrants have a reduced exercise price of $0.04 at September 30, 2009, and adjusted total warrants of 1,750,000. As of March 31, 2008September 30, 2009 and December 31, 2008, the fair value of the warrant derivative liability was determined to be $80,000$347,823 and 50,000$50,000 respectively. AUpon valuation, a loss upon valuation of $30,000$279,349 was recorded for the three months ended March 31,September 30, 2009. For the nine months ended September 30, 2009, a total loss of $297,823 was recorded.

The Amended 12% CAMOFI and 15% CAMHZN Notes are both convertible into shares of common stock at a conversion price of $0.07.$0.04 (subject to adjustment based on the anti-dilution feature). At March 31,September 30, 2009 and December 31, 2008, the aggregate fair value of theCAMOFI conversion option derivative liabilities was $3,330,977$13,762,903 and 1,515,634,$1,516,634, respectively. AUpon valuation, a loss upon valuation of $1,815,343$11,296,007 was recorded for the three months ended MarchSeptember 30, 2009. For the nine months ended September 30, 2009, a total loss of $12,246,269 was recorded. At September 30, 2009 and December 31, 2009.

On February 18, 2009, the Company entered into an agreement with CAMOFI Master LDC for the issuance of a Senior Secured Convertible Note for $701,200 (the “February CAMOFI Note”), maturing on August 18, 2009. The Note can be converted at $0.07 per share at any time during the term of the convertible note. The Note was issued at a discount of 83.42857% of the face amount. The note is secured by all of the assets of the Company.subject to certain anti-dilution adjustments.

On February 18, 2009, New Century Companies, Inc. (the “Company”)the Company entered into an agreement with CAMHZN Master LDC for the issuance of a Senior Secured Convertible Note for $173,800 (the “February CAMHZN Note”) maturing on August 18, 2009. The Note can be converted at $0.07 per share at any time during the term of the convertible note. The Note was issued at a discount of 83.42857% of the face amount.note subject to certain anti-dilution adjustments.

The Notes are convertible into shares of common stock with a conversion price of $0.07. Per FAS 133 “Accounting for Derivative Instruments and Hedging Activities”,U.S. accounting standards, the conversion option is a derivative liability. The Company recorded at issuance a $161,289$384,460 derivative liability for the February CAMOFI Note, and a $39,977$95,292 derivative liability for the February CAMHZN Note. The conversion option liability is revalued each quarter.

At March 31,September 30, 2009 the fair value was $632,931 for the CAMOFI Note, and $156,879 for CAMHZN Note and a loss of $471,643 for the CAMOFI Note and $116,902 for the CAMHZN Note was recorded from the increase in the fair values of these derivative liabilities.the conversion features were $3,413,367 for the February CAMOFI Note and $846,040 for the February CAMHZN Note.  Upon valuation, a loss of $2,866,582 and $710,514, respectively, was recorded for the February CAMOFI and February CAMHZN notes for the three months ended September 30, 2009.  For the nine months ended September 30, 2009, a loss of $3,029,907 and $750,748, respectively, was recorded for the February CAMOFI and February CAMZHN notes.

The discounts are amortized into interest expense ratably over the life of the Notes. As of March 31,For the three and nine months ended September 30, 2009, the Company recorded amortization expense on the conversion option of $7,831 on the July CAMOFI Note and $1,958 on the July CAMHZN Note.

Per U.S. accounting standards, the conversion option of the September CAMOFI and CAMZHN notes is a derivative liability. The Company recorded at issuance a $245,736 derivative liability for the September CAMOFI Note, and a $61,434 derivative liability for the September CAMHZN Note, corresponding debt discounts of $29,050 on$48,000 and $12,000 and interest expense of $197,736 and $49,434, respectively. The conversion option liability is revalued each quarter. At September 30, 2009 the fair value of the conversion features were $233,659 for the September CAMOFI Note and $7,200 on$58,415 for the September CAMHZN Note.  Upon valuation, a gain of $12,077 and $3,019, respectively, was recorded for the September CAMOFI and CAMZHN notes for the three and nine months ended September 30, 2009.

In February 2008, the Company entered into a one year contract with a third party for public relations services valued at $30,000. The fee was paid in the form of 150,000 shares of the Company’s common stock based on the stock market price of the shares at the contract date. The value of the common stock on the date of the transaction was recorded as a deferred charge and is amortized to operating expense over the life of the agreement. Consulting fees under this contract of $2,500$0 and $5,000 were amortized to expense during the quarterthree months ended March 31,September 30, 2009 and March 31,September 30, 2008, respectively. Consulting fees under this contract of $2,500 and $20,000 were amortized to expense during the nine months ended September 30, 2009 and 2008, respectively. As of March 31,September 30, 2009 the balance of deferred consulting fees was fully amortized.

In February 2008, the Company entered into a three month contract with a third party for public relations services valued at $20,000. The fee was paid in the form of 100,000 shares of the Company’s common stock based on the stock market price of the shares at the contract date. The value of the common stock on the date of the transaction was recorded as a deferred charge and is amortized to operating expense over the life of the agreement. Consulting fees under this contract of $20,000 were amortized to expense during the yearnine months ended December 31, 2008 and at March 31, 2009 the balance of deferred consulting fees was fully amortized.September 30, 2008.

In June 2007, the Company entered into a three year contract with a third party for internet public investor relations services valued at $210,000. The fee was paid in the form of 300,000 shares of the Company’s common stock and valued based on the stock market price of the shares at the contract date. The value of the common stock on the date of the transaction was recorded as a deferred charge and $17,000charge. $18,000 was amortized to operating expense during the quarterthree months ended March 31, 2009.September 30, 2009 and 2008. $53,000 was amortized to operating expense during the nine months ended September 30, 2009 and 2008. At March 31,September 30, 2009 and December 31, 2008, the remaining deferred consulting fees totaled $81,667$46,700 and $204,167,$101,667, respectively.

The preferred shares Series C and preferred shares Series D shares have a mandatory cumulative dividend of $1.25 per share, which is payable on a semi-annual basis in September and December each year to holders of record on November 30 and May 31. The preferred shareholders have certain liquidation preferences and do not have voting rights.

At March 31,September 30, 2009 and December 31, 2008, the Company had a total of 26,680 preferred shares Series C and 11,640 preferred shares Series D issued and outstanding. As of March 31,September 30, 2009 and December 31, 2008, the Company’s accumulated dividends payable is $459,275. The Company did not declare any dividends during the three months ended March 31, 2009.

The statement of operations and statement of cash flows for the three and nine months ended March 31,September 30, 2008 included herein were restated to reflect the effect of changes to the original accounting for the CAMOFI Note issued in February 2006.  The original accounting did not record thea separate derivative for the conversion option and the warrants in accordance with FAS 133, “Accounting for Derivative Instruments and Hedging Activities” and EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled In, a Company’s Own Stock”.warrants.

The effect of these changes impacted the balance sheet and the statement of operations from February 2006 through December 31, 2008. The balance sheet effect is due to recording the conversion option and warrant liabilities and the effect on the statement of operations is due to the gains and losses from the quarterly fair value adjustments and an increase in interest expense. Accordingly, the statement of operations for the three and nine months ended March 31,September 30, 2008 has been restated as summarized below:

The following discussion should be read in conjunction with the Company's consolidated financial statements and the notes thereto appearing elsewhere in this Form 10-Q. Certain statements contained herein that are not related to historical results, including, without limitation, statements regarding the Company's business strategy and objectives, future financial position, expectations about pending litigation and estimated cost savings, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act") and involve risks and uncertainties. Although the Company believes that the assumptions on which these forward-looking statements are based are reasonable, there can be no assurance that such assumptions will prove to be accurate, and actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, regulatory policies, and market and general policies, competition from other similar businesses, and market and general economic factors. All forward-looking statements contained in this Form 10-Q are qualified in their entirety by this statement.

The Company is engaged in acquiring, re-manufacturing and selling pre-owned Computer Numerically Controlled ("CNC") machine tools to manufacturing customers. The Company provides rebuilt, retrofit and remanufacturing services for numerous brands of machine tools. The remanufacturing of a machine tool, typically consisting of replacing all components, realigning the machine, adding updated CNC capability and electrical and mechanical enhancements, generally takes two to four months to complete. Once completed, a remanufactured machine is a "like new," state-of-the-art machine with a price ranging from $275,000 to $1,000,000, which is substantially less then the price of an equivalent new machine. The Company also manufactures original equipment CNC large turning lathes and attachments under the trade name Century Turn.

CNC machines use commands from onboard computers to control the movements of cutting tools and rotation speeds of the parts being produced. Computer controls enable operators to program operations such as part rotation, tooling selection and tooling movement for specific parts and then store the programs in memory for future use. The machines are able to produce parts while left unattended. Because of this ability, as well as superior speed of operation, a CNC machine is able to produce the same amount of work as several manually controlled machines, as well as reduce the number of operators required; generating higher profits with less re-work and scrap. Since the introduction of CNC tooling machines, continual advances in computer control technology have allowed for easier programming and additional machine capabilities.

A vertical turning machine permits the production of larger, heavier and more oddly shaped parts on a machine, which uses less floor space when compared to the traditional horizontal turning machine because the spindle and cam are aligned on a vertical plane, with the spindle on the bottom.

The primary industry segments in which the Company’s machines are utilized to make component parts are in aerospace, power generation turbines, military, component parts for the energy sector for natural gas and oil exploration and medical fields. The Company sells its products to customers located in United States, Canada and Mexico.

Over the last four years, the Company has designed and developed a large horizontal CNC turning lathe with productivity features new to the metalworking industry. The Company believes that a potential market for the Century Turn Lathe, in addition to the markets mentioned above, is aircraft landing gear.

We provide our manufactured and remanufactured machines as part of the machine tool industry. The machine tool industry worldwide is approximately a 30 billion dollar business annually. The industry is sensitive to market conditions and generally trends downward prior to poor economic conditions, and improves prior to an improvement in economic conditions.

Our machines are utilized in a wide variety of industry segments as follows: aerospace, energy, valves, fittings, oil and gas, machinery and equipment, and transportation. With the recent downturn in the aerospace industry, we have seen an increase in orders from new industries such as defense and medical industries.

The Company's current strategy is to expand its customer sales base with its present line of machine products. The Company's growth strategy also includes strategic acquisitions in addition to growing the current business. Plans for expansion are funded through current working capital from ongoing sales. A significant acquisition will require additional financing.