UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.  )

 

TECHPRECISION CORPORATION

OctoberAugust    , 20102011

It is my pleasure to invite you to attend our Annual Meeting of Shareholders.Stockholders.  The meeting will be held on November 22, 2010September 15, 2011 at 10 a.m. Eastern Time at Pepper Hamilton LLP, The New York Times Building, 37th Floor, 620 Eighth Avenue New York, New York 10018.TechPrecision’s corporate office located at 3477 Corporate Parkway, Suite 140, Center Valley, Pennsylvania, 18034.  The Notice of Annual Meeting and Proxy Statement accompanying this letter describesdescribe the business to be conducted at the meeting.

If you plan to attend the meeting and you hold your shares in registered form, and not through a bank, brokerage firm or other nominee, please mark the appropriate box on your proxy card.  If you plan to attend and your shares are held by a bank, brokerage firm or other nominee, please send written notification to 1 Bella Drive, Westminster, MA 01473,3477 Corporate Parkway, Suite 140, Center Valley, Pennsylvania 18034, Attention: Richard Fitzgerald, and enclose evidence of your ownership (such as a letter from the bank, brokerage firm or other nominee confirming your ownership, or a bank or brokerage firm account statement).  The names of all those indicating they plan to attend will be placed on an admission list held at the registration desk at the entrance to the meeting.

It is important that your shares be represented at the meeting, regardless of the number you may hold.  Whether or not you plan to attend, if you hold your shares in registered form, please sign, date and return your proxy card as soon as possible.  If, on the other hand, you hold your shares through a bank, brokerage firm or other nominee, please sign, date and return to your bank, brokerage firm or other nominee the enclosed voting instruction form, or if you prefer, you can vote by telephone or through the Internet in accordance with instructions set forth in the enclosed voting instruction form.

Chief Executive Officer

 

10:00 a.m. Eastern Time

OctoberAugust    , 20102011

You are invited to the Annual Meeting of ShareholdersStockholders of TechPrecision Corporation (the “Company”).  We will hold the meeting at the time and place noted above.  At the meeting, we will ask you to:

 

 

2006 Long-Term Incentive Plan

Compensation Policies and Practices and Risk Management

One of the responsibilities of our compensation committee is to ensure that the Company’s compensation programs are structured so as to discourage inappropriate risk-taking.  The Company believes that its existing compensation practices and policies for all employees, including executive officers, mitigate against this risk by, among other things, providing a meaningful portion of total compensation in the form of equity incentives.  These equity incentives are awarded with either staggered or cliff vesting over several years, so as to promote long-term rather than short-term financial performance and to encourage employees to focus on sustained stock price appreciation.  In addition, the Company’s existing compensation policies attempt to discourage employees from taking excessive risks t oto achieve individual performance objectives such as annual cash incentive compensation and long termlong-term incentive compensation which are based upon balanced company-wide, business unit and individual performance and base salaries structured so as to be consistent with an employee’s responsibilities and general market practices.  The compensation committee will continue to monitor the Company’s existing compensation practices and policies and investigate applicable enhancements to align the Company’s existing practices and policies with long-term shareholderstockholder value.

VII.  RELATED PARTY TRANSACTIONS

We lease our facilities inOn December 20, 2010, the Company, through its wholly owned subsidiary, Ranor, purchased the property located at Bella Drive, Westminster, Massachusetts pursuant to a Purchase and Sale Agreement, by and among the former owner of the property WM Realty (an entity controlled by the Company’s director, Andrew Levy), and Ranor.  Prior to consummation of the sale under the Purchase Agreement, the Company had leased the purchased property from WM Realty.

The property includes a 125,000 sq. ft. manufacturing facility that serves as Ranor’s primary operating location.  Pursuant to the Purchase Agreement, Ranor paid WM Realty $4,275,000 for the property, which is controlled by Andrew A. Levy, a director and a principal stockholder. We currently pay an annual rent of $450,000, which is subject to increaseprice was based on increasesindependent, third-party appraisals obtained by the Company.  Under the Purchase Agreement, the parties agreed to share equally in the cost$91,448 prepayment penalty associated with the early termination of living index. We also have a right to purchasethe mortgage that encumbered the property at fair market value.  The Company anticipates that it may exerciseand which was paid off in full in connection with the purchase optionclosing under the Purchase Agreement.  In addition, the Purchase Agreement provided for the early termination of Ranor’s lease and acquireof the property from WM Realty, at appraised value during fiscal 2011.pursuant to which Ranor had been paying annual rent of $450,000.

All transactions with related parties are subject to approval by the audit committee.  As part of its review of related party transactions, the audit committee generally seeks to obtain evidence regarding whether the terms of the related party transaction are market-based.  The audit committee relies on such information, in addition to other transaction-specific factors, in its review and approval of related party transactions.

VIII.  PROPOSAL TWO – AMENDMENT OF THE 2006 LONG-TERM INCENTIVE PLAN

At the Annual Meeting, stockholders will be asked to approve amendmentsan amendment (the “Amendments”“Amendment”) to the Company’s 2006 Long-Term Incentive Plan (the “Plan”).Plan.  If approved, the AmendmentsAmendment will increase the number of shares of Common Stock available for issuance under the Plan from 1,000,0003,000,000 shares to an aggregate of 3,000,0003,300,000 shares (the additional 2,000,000300,000 shares, the “Additional Pool”).  The terms of the Plan and information regarding awards granted thereunder are summarized below.

The Plan was first approved by stockholders at our Annual Meeting in 2006.  The Plan is intended to provide a flexible structure within which we may utilize various compensation devices to recruit and retain key personnel.  Currently, awards under the Plan may be granted in the form of incentive stock options, (except with respect to shares reserved for issuance under the Additional Pool), non-qualified stock options, stock appreciation rights, restricted stock, performance awards, bonuses, or any other form of share-based or non-share-based award or any combination of these awards.  In 2010, the Company’s stockholders approved amendments to the Plan increasing the number of shares of Common Stock authorized for issuance under the Plan from 1,000,000 to 3,000,000, as well as ratifying certain incentive stock options granted under the Plan and extending the period during which incentive stock options may be granted under the Plan.  To date, non-qualified stock options, incentive stock options and restricted stock have been granted under the Plan, and in August 2010, the Board issued incentive stock options (the “Issued Options”) under the Plan to our Chief Execu tive Officer and to our Chief Financial Officer, in the following amounts:Plan.

In order to ensure that the shares remaining under the Plan will be sufficient to support our equity incentive programs on a going forward basis, the Board has adopted the AmendmentsAmendment to increase the number of shares of Common Stock available for issuance under the Plan by the amount of the Additional Pool.

Reasons for Stockholder Approval

Summary of the Plan

Except with respect to shares reserved for issuance under the Additional Pool that are not currently subject to incentive stock option treatment, optionsOptions intended to be incentive stock options must be granted at an exercise price per share which is not less than the fair market value of the Common Stock on the date of grant and may have a term which is not longer than ten years.  If the option holder holds 10% of our Common Stock, the exercise price must be at least 110% of the fair market value on the date of grant and the term of the option cannot exceed five years.  Awards under the Plan, unless waived by the administrator, are subject to certain restrictions on transferability.  Awards may be forfeitable in certain circumstances and are exercisable at such time or times and during such periods as shall be set forth in the agreement evidencing an award.

There are presently a total of 2,000,8272,623,662 shares subject to all outstanding awards under the Plan.

Each Initial OptionGrant and Annual OptionGrant shall expire on the first to occur of (x) the fifth anniversary of the date of grant, or (y) seven months from the date the applicable independent director’s service as a director ceases (other than as a result of his or her death or disability) or (z) twelve months after the date of the independent director’s death or disability.

The committee may determine the applicable option exercise period for each option; provided, however, that the exercise period may not exceed ten (10) years from the date of grant.  Additionally, to the extent that an option holder holds 10% of our Common Stock, the exercise period applicable to an ISO may not exceed five (5) years from the date of grant.  Vesting for each option will also be determined by the committee.

Payment of the option price will be made either by check, note or such other instrument, securities or property as the committee may accept.  In addition, and to the extent determined by the committee, in its sole discretion, payments in full or in part may also be made in the form of stock already owned by the participant or, in the case of the exercise of a NQSO, restricted stock or deferred stock subject to an otherwise outstanding award.

Unless the committee determines otherwise, in the event of a change in control or a potential change in control, outstanding awards shall be purchased by the Company in a manner determined by the committee, in its sole discretion, on the basis of the “change in control price” (as defined in the Plan) as of the date such change in control or such potential change in control.

Federal Income Tax Consequences of Awards Granted under the 2006 Plan

Set forth below is a general description of the federal income tax consequences relating to awards granted under the Plan other than stock purchase rights and other stock based awards (which may have the same or similar tax attributes as the types of awards described below, depending on the terms established by the committee).  Participants are urged to consult with their personal tax advisors concerning the application of the principles discussed below to their own situations and the application of state and local tax laws.

If such sale occurs within one year from the date of exercise of the ISO or within two years from the date of grant (a “disqualifying disposition”), the participant generally will recognize ordinary income equal to the lesser of the excess of the fair market value of the shares on the date of exercise over the exercise price, or the excess of the amount realized on the sale of the shares over the exercise price.  The Company generally will be entitled to a tax deduction on a disqualifying disposition corresponding to the ordinary compensation income recognized by the participant.

A participant may, however, elect to recognize ordinary income in the year the restricted stock is awarded in an amount equal to the difference between the fair market value of the shares of Common Stock at that time, determined without regard to any restrictions, and the amount paid by the participant for the shares, if any.  In this event, the Company will be entitled to a deduction equal to the amount recognized as compensation by the participant in the same year.  In addition, in this event, the participant will not be required to recognize any taxable income upon vesting of the shares.  If, after making the election, any shares subject to the award are forfeited, the participant will not be entitled to any tax deduction or refund with respect to taxes previously paid.

In either case, the tax basis of shares subject to a restricted stock award will be equal to their fair market value on the date the participant recognizes ordinary income with respect to the award, and the holding period of the shares will commence on that date for purposes of determining whether a subsequent disposition of the shares will result in long-term or short-term capital gain or loss.

New Plan Benefits

Other than with respect to the Issued Options as described above, itIt is not possible to determine the number, name or positions of persons who will benefit from the Amendments,Amendment, if it is approved by stockholders, or the terms of any such benefits due to the fact that awards are granted under the Plan in the discretion of the committee.

IX.  PROPOSAL THREE –- REVERSE STOCK SPLIT

OurIn connection with the meeting of the Company’s stockholders held in 2010 (the “2010 Annual Meeting”), our Board of Directors has adopted, declared advisablerecommended, and is submitting for stockholder approval a proposal to approvethe stockholders approved, an amendment to our Certificate of Incorporation to effect a reverse stock split of our Common Stock at an exchange ratio of 1−for−2,1-for-2, at any time prior to the one year anniversary of such meeting, the implementation and timing of which was subject to the discretion of our Board of Directors.  According to the terms of the proposal approved at the 2010 Annual Meeting, the Board of Directors’ authority to implement the amendment to our Certificate of Incorporation and to effectuate the reverse stock split will expire on the one year anniversary of the 2010 Annual Meeting, or November 22, 2011.

Our Board of Directors has not yet implemented the amendment to our Certificate of Incorporation as approved by the stockholders and desires to extend the time period during which it may implement the amendment.  As such, our Board of Directors has adopted, declared advisable and is submitting for stockholder approval a similar amendment to our Certificate of Incorporation to effect a reverse stock split of our Common Stock at an exchange ratio in the range of 1-for-1 to 1-for-2, such ratio to be determined by the Board of Directors, at any time prior to the one year anniversary of this Annual Meeting, the implementation and timing of which shall beis subject to the discretion of theour Board of Directors.

By voting in favor of Proposal Three, stockholders will be approving an amendment to our Certificate of Incorporation in order to effect a reverse stock split of our outstanding Common Stock at an exchange ratio no greater than 1-for-2, such ratio to be determined by the Board of Directors.  The Board of Directors believes that stockholder approval of a 1-for-2 ratio.range of ratios (as opposed to approval of a specified ratio) provides the Board with maximum flexibility to achieve the purposes of the Reverse Stock Split and, therefore, is in the best interests of the Company and its stockholders.  After the receipt of stockholder approval of this amendment, our Board of Directors will thereafter have the ability at any time prior to the one year anniversary of the An nualAnnual Meeting to unilaterally give effect to this amendment, and thereafter, the amendment will be filed with the Secretary of State of the State of Delaware.  Pursuant to the law of our state of incorporation, Delaware, our Board of Directors must adopt any amendment to our Certificate of Incorporation and submit the amendment to our stockholders for their approval.  The affirmative vote of a majority of the outstanding shares of common stock is required to approve Proposal Three.  Upon implementation of the reverse stock split, up to two shares of outstanding Common Stock will be automatically converted into one share of Common Stock.  We refer to this transaction in this proxy statement as the “Reverse Stock Split.”

Our Board of Directors, in its discretion, may elect to file the Certificate of Amendment upon receipt of stockholder approval if it determines, in its discretion, to proceed with the Reverse Stock Split.  In determining whether to effect the Reverse Stock Split following the receipt of stockholder approval, our Board of Directors may consider, among other things, factors such as:

 

Purposes of the Reverse Stock Split

Reverse stock splits generally cause the stock price per share to rise because there are less outstanding common shares that represent the entire equity of the Company.  An increased stock price may encourage investor interest and improve the marketability and liquidity of our Common Stock.  Because of the trading volatility often associated with low-priced stocks, many brokerage firms and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers.  Some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers.  Our Board of Directors believes that the anticipated higher market price resulting from the Reverse Stock Split may reduce, to some extent, the negative effects on the liquidity and marketability of the Common Stock inherent in some of the policies and practices of these institutional investors and brokerage firms described above.  Additionally, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of our Common Stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher.  Our Board of Directors also believes that the Reverse Stock Split is an effective means of increasing the per share market price of our common stock in order to achieve the minimum per share stock price necessary to qualify for listing on well recognized stock exchanges, such as the American Stock Exchange or the NasdaqNASDAQ Capital Market.

Our Board of Directors would effect the Reverse Stock Split only upon the Board’s determination that the Reverse Stock Split would be in our best interests following stockholder approval after the distribution of this Proxy Statement to our stockholders at the 2010 annual meeting.Annual Meeting.  If the Board of Directors were to effect the Reverse Stock Split, the Board of Directors would determine the exact exchange ratio for the Reverse Stock Split (which will be no greater than 1-for-2), set the timing for the Reverse Stock Split and file the Certificate of Amendment.  No further action on the part of stockholders is required to either implement or abandon the Reverse Stock Split.  If the Board of Directors determines to implement the Reverse Stock Split, we would communicate to the public,will publicly announce, prior to the effective date of the Reverse Stock Split, additional details regarding the Reverse Stock Split.  If the Board of Directors does not implement the Reverse Stock Split prior t oto the one year anniversary of the Annual Meeting, the authority granted in this proposal to implement the Reverse Stock Split will terminate.  The Board of Directors reserves its right to elect not to proceed, and to abandon, the Reverse Stock Split if it determines, in its sole discretion, that this proposal is no longer in our best interests.

Potential Risks of the Reverse Stock Split

If the Board of Directors were to effect the Reverse Stock Split, there can be no assurance that the Common Stock will be listed on stock exchanges such as the American Stock Exchange or the NasdaqNASDAQ Capital Market.  Further, regardless of which stock market the stock is trading, there is no assurance that the trading price of the Common Stock will continue at a level in proportion to the reduction in the number of outstanding shares resulting from the Reverse Stock Split.  For example, based on the closing price on the OTC Bulletin Board of our Common Stock on October       , 2010July 28, 2011 of $$1.62 per share, if the Board of Directors decided to implement a reverse stock split at a ratio of 1−for−2, there can be no assurance that the post-split market price of our Common Stock would b e $be $3.24 per share or greater on any exchange.  Accordingly, the total market capitalization of our Common Stock after the proposed Reverse Stock Split may be lower than the total market capitalization before the proposed Reverse Stock Split.

Additionally, the liquidity of our Common Stock could be affected adversely by the reduced number of shares outstanding after the Reverse Stock Split.  Although our Board of Directors believes that a higher stock price may help generate investor interest, there can be no assurance that the Reverse Stock Split will result in a per share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds.  As a result, the decreased liquidity that may result from having fewer shares outstanding may not be offset by increased investor interest in our Common Stock.  The market price of our common stock will also be based on our performance and other factors, some of which are unrelated to the number of shares outstanding.

Effective Date

Our Board of Directors, in its discretion, may elect not to file the Certificate of Amendment if it determines in its discretion not to proceed with the Reverse Stock Split.  The Reverse Stock Split would become effective at the time specified in the Certificate of Amendment, which we expect to be the date of filing of the Certificate of Amendment with the Secretary of State of the State of Delaware.  On the effective date, shares of Common Stock issued and outstanding immediately prior thereto will be combined and converted, automatically and without any action on the part of the stockholders, into new shares of Common Stock in accordance with an exchange ratio in the range of 1-for-2.1-for-1 to 1-for-2, such ratio to be determined by the Board of Directors.  If our Board of Directors does not implement the Reverse Stock Split prior to the one year anniversary of the Annual Meeting, s tockholderstockholder approval would be required again prior to the implementation of any reverse stock split.

Principal Effects of the Reverse Stock Split

    Common Stock

After the effective date of any Reverse Stock Split, each stockholder will own fewer shares of our Common Stock.  However, the Reverse Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in us, except to the extent that the Reverse Stock Split results in any of our stockholders owning a fractional share as described below.  Proportionate voting rights and other rights and preferences of the holders of our Common Stock will not be affected by the Reverse Stock Split other than as a result of the payment of cash in lieu of fractional shares.  Further, the number of stockholders of record will not be affected by the Reverse Stock Split, except to the extent that any stockholder holds only a fractional share interest and receives cash for such interes tinterest after the Reverse Stock Split, as discussed below.

 

 

The Reverse Stock Split is likely to result in some stockholders owning “odd−lots” of fewer than 100 shares of Common Stock.  Brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions on “round−lots” of even multiples of 100 shares.

The Reverse Stock Split would not change the number of authorized shares of the Common Stock as designated by our Certificate of Incorporation.  Therefore, because the number of issued and outstanding shares of Common Stock would decrease, the number of shares remaining available for issuance under our authorized pool of Common Stock would increase.  These additional shares of Common Stock would be available for issuance from time to time for corporate purposes such as raising additional capital, acquisitions of companies or assets and sales of stock or securities convertible into or exercisable for Common Stock.  We believe that the availability of the additional shares will provide us with the flexibility to meet business needs as they arise and to take advantage of favorable opportunities.  If we issue additional shares for any of these purposes, the ownership interest of our current stockholders would be diluted.  Although we continually examine potential acquisitions of companies or assets or other favorable opportunities, there are no current arrangements to issue any additional shares of our Common Stock for such purposes.

This proposal has been prompted solely by the business considerations discussed in the preceding paragraphs.  Nevertheless, the additional shares of Common Stock that would become available for issuance if the Reverse Stock Split is effected could also be used by the Company’s management to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management, including transactions that are favored by a majority of the stockholders or in which the stockholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner.  For example, without further stockholder approval, the Board could sell shares of Common Stock in a private transaction to purchasers who would oppose a takeover or favor our current Board of Directors.  Our Board of Directors is not aware of any pending takeover or other transactions that would result in a change in control of the Company, and the proposal was not adopted to thwart any such efforts.

    Options and Warrants

In addition, all outstanding options and warrants to purchase shares of our Common Stock would be adjusted as a result of the Reverse Stock Split, as required by the terms of those securities.  In particular, the number of shares issuable upon the exercise of each instrument would be reduced, and the exercise price per share, if applicable, would be increased, in accordance with the terms of each instrument and based on the exchange ratio of the Reverse Stock Split.  The number of shares reserved for issuance under our existing stock option and equity incentive plans would be reduced proportionally based on the exchange ratio of the Reverse Stock Split.

    Treatment of Fractional Shares

No fractional shares would be issued if, as a result of the Reverse Stock Split, a stockholder would otherwise become entitled to a fractional share.  Instead, we would pay to the stockholder, in cash, the value of any fractional share arising from the Reverse Stock Split.  The cash payment would equal the closing sale price per share of our Common Stock as reported on the OTC Bulletin Board on the last trading day preceding the effective date of the Reverse Stock Split multiplied by the number of shares of pre-split Common Stock held by the stockholder that would otherwise have been exchanged for such fractional share.  No transaction costs would be assessed to stockholders for the cash payment.  Stockholders would not be entitled to receive interest for their fractional shares.

If you do not hold sufficient shares of pre-split Common Stock to receive at least one post-split share of Common Stock and you want to hold our Common Stock after the Reverse Stock Split, you may do so by taking either of the following actions far enough in advance so that it is completed before the Reverse Stock Split is effected:

 

 

After the Reverse Stock Split, our then-current stockholders would have no further interest in our Company with respect to their fractional shares.  A person otherwise entitled to a fractional share would not have any voting, dividend or other rights in respect of their fractional share except to receive the cash payment as described above.  Such cash payments would reduce the number of post-split stockholders to the extent that there are stockholders holding one pre-split share.  Reducing the number of post-split stockholders, however, is not the purpose of this proposal.

Stockholders should be aware that, under the escheat laws of the various jurisdictions where stockholders reside, where we are domiciled and where the funds for fractional shares would be deposited, sums due to stockholders in payment for fractional shares that are not timely claimed after the effective date may be required to be paid to the designated agent for each such jurisdiction. Thereafter, stockholders otherwise entitled to receive such funds have to seek to obtain them directly from the state to which they were paid.

    Effect on Non-Registered Stockholders

Non-registered stockholders holding our Common Stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the consolidation than those that would be put in place by us for registered stockholders, and their procedures may result, for example, in differences in the precise cash amount being paid by such nominees in lieu of a fractional share.  If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee.

 

 

    Exchange of Stock Certificates and Payment for Fractional Shares

If our Board of Directors decides to effect the Reverse Stock Split, we will file the Certificate of Amendment with the Secretary of State of the State of Delaware.  The Reverse Stock Split will become effective at the time specified in the Certificate of Amendment, which we expect to be the date of filing of the Certificate of Amendment, and which we refer to as the “Effective Date.”

As soon as practicable after the Effective Date, transmittal forms will be mailed to each holder of record of certificates for shares of our Common Stock to be used in forwarding such certificates for surrender in exchange for any cash payment due for fractional shares and, if so elected by the holder, certificates representing the number of shares of our post-split Common Stock such stockholder is entitled to receive as a result of the Reverse Stock Split.  Our transfer agent will act as exchange agent for purposes of implementing the payment in lieu of fractional shares and exchanging stock certificates.  The transmittal forms will be accompanied by instructions specifying other details of the exchange.  Upon receipt of the transmittal form, each stockholder should surrender the certificates repres entingrepresenting shares of our Common Stock prior to the Reverse Stock Split in accordance with the applicable instructions.  Each stockholder who surrenders certificates will receive any cash payment due for fractional shares and, upon payment of the applicable fee, new certificates representing the whole number of shares of our Common Stock that he or she holds as a result of the Reverse Stock Split.  No new certificates and no payments in lieu of fractional shares will be issued to a stockholder until the stockholder has surrendered his or her outstanding stock certificate(s) together with the properly completed and executed transmittal form to the exchange agent.

Accounting Consequences

No Appraisal Rights

In connection with the approval of the Reverse Stock Split, stockholders of the Company will not have a right to dissent and obtain payment for their shares under Delaware law or our Certificate of Incorporation or bylaws.

No Going Private Transaction

Interests of Certain Persons in the Proposal

 

Federal Income Tax Consequences of the Reverse Stock Split

The following is a summary of the material United States federal income tax consequences of the Reverse Stock Split to U.S. holders (as defined below) of our Common Stock, but does not purport to be a complete analysis of all the potential tax considerations relating thereto.  This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended, or the “Code,” Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof.  These authorities may be changed, possibly retroactively, so as to result in United States federal income tax consequences different from those set forth below.  We have not sought any ruling from the Internal Revenue Service, or “IRS,” with respect to the statements made and the c onclusionsconclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions.

This summary assumes that you hold our Common Stock as a “capital asset” within the meaning of the Code (generally property held for investment).  This summary does not address the tax considerations arising under the laws of any foreign, state or local jurisdiction, or United States federal tax considerations other than income taxation.  In addition, this discussion does not address tax considerations applicable to an investor’s particular circumstances or to investors that may be subject to special tax rules, including, without limitation:

YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION, AS WELL AS ANY TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT OR THE OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE UNITED STATES FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

U.S. Holder

     

Tax Consequences of the Reverse Stock Split Generally

The Board of Directors recommends a vote “FOR” Proposal Three to approve an amendment to our Certificate of Incorporation to effect a reverse stock split of our Common Stock at an exchange ratio in the range of

 

 

X.  PROPOSAL FOUR – RATIFICATION OF

INDEPENDENT AUDITORS

 

TheOn July 6, 2011, in connection with the selection of KPMG LLP (“KPMG”) as our independent registered public accounting firm, the Audit Committee has appointednotified Tabriztchi & Co., CPA, P.C. (“Tabriztchi”) that it had determined to dismiss Tabriztchi as the Company’s independent registered public accounting firmfirm.  The reports of Tabriztchi on the Company’s consolidated financial statements as of and for the years ended March 31, 2011 and 2010, did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

During the books, recordsCompany’s fiscal years ended March 31, 2011 and accountsMarch 31, 2010, and through July 6, 2011, there were no disagreements between the Company and Tabriztchi on any matter of accounting principle or practice, financial statement disclosure, or auditing scope of procedure that, if not resolved to Tabriztchi’s satisfaction, would have caused it to make reference in connection with their audit report to the subject matter of the Company for the fiscal year ending March 31, 2011.disagreements, or “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.

The Audit Committee has recommended that the stockholders vote for ratification of such appointment.the appointment of KPMG as our independent registered public accounting firm.  A representative of TabriztchiKPMG is expected to be present at the Annual Meeting and will have the opportunity to make a statement if desired and is expected to be available to respond to appropriate questions.

Neither the Company’s bylaws nor other governing documents or laws require stockholder ratification of the appointment of TabriztchiKPMG as the Company’s independent registered public accounting firm.  However, the Audit Committee is submitting the appointment of TabriztchiKPMG to the stockholders for ratification as a matter of good corporate practice.  If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain that firm.  Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of different independent public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders.

The affirmative vote of the majority of the votes represented by the holders of shares present in person or represented by proxy and entitled to vote at the Meeting will be required to ratify the appointment of Tabriztchi & Co., CPA, P.C.KPMG.

XI.  AUDIT COMMITTEE REPORT

The Audit Committee Report that follows shall not be deemed to be incorporated by reference into any filing made by us under the Securities Act or the Exchange Act, notwithstanding any general statement contained in any such filing incorporating this proxy statement by reference, except to the extent we incorporate such Report by specific reference.

The Audit Committee of the Board of Directors has:

In reliance upon the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended March 31, 2010.2011.

The Audit Committee

Audit Fees

 

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, requires our directors, executive officers and persons who own more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other of our equity securities.  To our knowledge, during the fiscal year ended March 31, 2009,2011, all reports required to be filed pursuant to Section 16(a) were filed on a timely basis, except for the following: (i) Mr. Stanley Youtt failed to timely file Forms 4 reporting sales consummated on November 9, 2010 and November 24, 2010; (ii) Mr. Richard Fitzgerald failed to timely file a Form 4 reporting the acquisition of stock options on August 4, 2010; (iii) Mr. James S. Molinaro failed to timely file a Form 3 reporting his beneficial ownership of our common stock as of July 21, 2010 (the date he joined us as chief executive officer) and a Form 4 reporting his acquisition of stock options on August 4, 2010; (iv) Mr. Andrew A. Levy failed to timely file Forms 4 reporting sales consummated on August 30, 2010 and March 15, 2011; (v) Mr. Louis A. Winoski failed to timely file a Form 4 reporting the exercise of options and corresponding sale of common stock consummated on February 28, 2011; and (vi) Mr. James G. Reindl, who beneficially ownsformerly a beneficial owner of more than 10% of our common stock, failed to timely file a Form 4 reporting a sale consummated on December 4, 2009; (ii) Robert Lifton, who beneficially owns more than 10% of our common stock, failed to timely file his Form 3 upon attaining such 10% ownership on February 24, 2006; (iii) Howard Weingro w, who beneficially owns more than 10% of our common stock, failed to timely file his Form 3 upon attaining such 10% ownership on February 24, 2006; (iv) Stanley Youtt failed to timely file Forms 4 reporting sales consummated on FebruaryMarch 9, March 19 and March 24, 2010.2011.

ShareholderStockholder Proposals for the 20112012 Annual Meeting

In addition to being able to present proposals for consideration at the 20112012 Annual Meeting, shareholdersstockholders may also be able to have their proposals included in our proxy statement and form of proxy for the 20112012 Annual Meeting.  In order to have a shareholderstockholder proposal included in the proxy statement and form of proxy, the proposal must be delivered to us at the address set forth below not later than         June       , 2011,2012, and the shareholderstockholder must otherwise comply with applicable SEC requirements and our bylaws.  If the shareholderstockholder complies with these requirements for inclusion of a proposal in our proxy statement and form of proxy, the shareholderstockholder need not comply with the notice requirements described in the preceding paragraph.

A copy of the full text of the bylaw provisions discussed above may be obtained by writing to the Secretary of TechPrecision and all notices and nominations referred to above must be sent to the corporate offices of TechPrecision, at the following address: TechPrecision Corporation, 1 Bella Drive, Westminster, MA 01473,Corporation., 3477 Corporate Parkway, Suite 140, Center Valley, Pennsylvania 18034, Attention: Richard F. Fitzgerald, Chief Financial Officer.

Expenses Relating to this Proxy Solicitation

We will pay all expenses relating to this proxy solicitation.  In addition to this solicitation by mail, our officers, directors, and employees may solicit proxies by telephone or personal call without extra compensation for that activity.  We also expect to reimburse banks, brokers and other persons for reasonable out-of-pocket expenses in forwarding proxy material to beneficial owners of our stock and obtaining the proxies of those owners.  We regularly retain the services of Hayden IR to assist with our investor relations adand other shareholderstockholder communications issues.  Hayden IR may assist in the solicitation of proxies but will not receive any additional compensation for these services.  In addition, proxies may be solicited on our behalf by directors, officers or employees in person or by telephone, facsimile, electronic transmissio ntransmission and by mail.  None of these persons will receive any extra compensation for doing this.

 

 

NOW, THEREFORE, the terms of the Plan are amended as follows:

 

 

CERTIFICATE OF AMENDMENT

TO

THE CERTIFICATE OF INCORPORATION

OF

TECHPRECISION CORPORATION