TechPrecision Provides Update on Status of Votaw Acquisition

WESTMINSTER, MA / ACCESSWIRE / January 8, 2024 / Today, TechPrecision Corporation (Nasdaq:TPCS) ("TechPrecision" or "we," "us" or "our") announced the expiration of the 45-day diligence period during which it could have terminated its previously disclosed Stock Purchase Agreement related to the acquisition of Votaw Precision Technologies, Inc. ("Votaw"). Accordingly, we are now committed to closing the Votaw acquisition and are taking this opportunity to expand upon our prior comments while being very aware, and making sure that our shareholders know, that at this point in the process we continue to be limited by the securities laws as to what topics we can discuss.

Even prior to completing the acquisition of STADCO in August 2021, it was our intent to relocate STADCO, whether by finding a new location or acquiring a compatible company. We started actively looking in August of 2022, speaking with many companies in the area, and we continued to actively do so until September of 2023 when we signed a Letter of Intent with Votaw, which was our first choice. We believe Votaw is a powerful strategic choice for us, will fit very well with STADCO, and will raise our revenue to a level more consistent with that typically expected of a public company thereby lessening the effects that public company costs have on lower-revenue companies.

The Board is unanimous in support of the acquisition and has a significant personal financial interest in its success as the Board beneficially owns an aggregate of over 15% of the outstanding stock in TechPrecision, as disclosed in TechPrecision's August 3, 2023 Proxy Statement.

For those shareholders who are unaware, the securities laws can be very limiting as to what can be publicly stated about future financing activities. Additionally, until the availability of more fulsome financial data from Votaw's most recently completed fiscal year on October 31, 2023, we are unable to provide more information about Votaw's financial condition and results of operations. We intend and expect to be able to provide additional information to the market and our shareholders very soon.

In the meantime, now that we are committed to proceeding to closing, we are providing some additional information as set forth below.

Expected Benefits of Votaw Acquisition

We believe that value of the transaction can be summed up in seven words:

• Synergy and Growth
• Overhead Savings
• CAPEX Savings.

SYNERGY and GROWTH. A quick review of Votaw's website and the information we previously provided shows that while Votaw performs work similar to our STADCO subsidiary, it operates in a significantly different but adjacent field. The overlap of STADCO and Votaw customers and applications is minimal.

Votaw is a leading supplier of highly engineered space, defense and aerospace mission critical components, structures and hardware. STADCO is a key supplier on various essential and high priority programs supporting flight critical components for the defense, aerospace and naval sectors that have a strong program of record with the U.S. Government with an emphasis on U.S. military helicopters, jet fighters and weapons system components that are vital to the U.S. warfighter. Demand is expected to increase for the product provided by both companies as launch and production rates ramp up on several programs.

Votaw and STADCO each have distinguished industry reputations, combining for 140+ years of continuous operations. They both have significant key capabilities with high-precision close-tolerance machining and welding & fabrication processes. We anticipate that combining these elements will provide further benefits in capacity and capability against a limited universe of competitors, which is one major key to continued long term growth. By redeploying STADCO into the Votaw campus, we expect to expand the breadth and depth of our customized solutions set provided to our key customers. This combination of human and equipment resources, which are not available to these entities acting separately, will enable additive synergies and capabilities, and enhance our ability to focus on higher-margin work.

OVERHEAD SAVINGS. Our immediate plan is to start moving STADCO's operations into the Votaw facility towards the end of 2024, continuing into 2025, with the expectation of formally merging these two entities. This consolidation is one of the major expected savings we referred to in our prior release. In 2023, the aggregate cost of the STADCO plant was approximately $1.3M in rent and other related expenses. Additional cost savings, such as from insurance, taxes and consolidating positions, are projected to be about $1.2M - $1.5M, once fully implemented. This projects out to almost $3M in annual overhead cost savings once the consolidation to one location is completed.

CAPEX SAVINGS. Our shareholders are well aware of the deferred maintenance problems at STADCO. In contrast, Votaw brings strong equipment capability with a robust maintenance history. In addition, STADCO has unique custom critical equipment and Votaw has available space and options to accommodate these critical equipment moves from STADCO. This specific combination provides ready existing equipment and avoids CAPEX and facility buildout expenses that would have been needed without this combination. While always difficult to ascertain as the situation and requirements evolve, we project the CAPEX savings over the next five years will be in excess of $10M.

Closing of Votaw Acquisition

ACQUISITION FINANCING. We will be seeking both debt and equity financing, with the relative amounts of each to be subject to market conditions. Our talks with financing sources are ongoing and fluid and any capital-raising will be done in accordance with the rules of the Nasdaq Stock Market and the SEC.

VOTAW FINANCIALS. Until the availability of more fulsome financial data from Votaw's most recently completed fiscal year on October 31, 2023, we are unable to provide more information about Votaw's financial condition and results of operations.

We expect that once the entire picture is out, you will see that this is a solid acquisition which will enhance shareholder value.

About TechPrecision Corporation

Through our wholly owned subsidiaries, Ranor, Inc. and STADCO, we manufacture large-scale, metal fabricated and machined precision components and equipment. These products are used predominantly in the defense, aerospace, and precision industrial markets. Our goal is to be an end-to-end service provider to our customers by furnishing customized solutions for completed products requiring custom fabrication and machining, assembly, inspection, and testing. To learn more about us, please visit our website at www.techprecision.com. Information on our website or any other website does not constitute a part of this press release.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of TechPrecision and its subsidiary companies. All statements other than statements of current or historical fact contained in this press release, including statements that express our intentions, plans, objectives, beliefs, expectations, strategies, predictions, or any other statements relating to our future activities, the pending acquisition of Votaw or other future events or conditions are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "should," "would" and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements are based on current expectations, estimates and projections made by management about our business, our industry and other conditions affecting our financial condition, results of operations or business prospects. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, the forward-looking statements due to numerous risks and uncertainties. Factors that could cause such outcomes and results to differ include, but are not limited to, risks and uncertainties arising from: the occurrence of any event, change or other circumstances that could give rise to the right of one or more of the parties to terminate the definitive securities purchase agreement between us and Votaw; the failure to obtain any necessary contractual or regulatory approvals or to satisfy any of the other conditions to the transaction on a timely basis or at all; the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; Ts ability to complete the acquisition and integration of Votaw successfully; our reliance on individual purchase orders, rather than long-term contracts, to generate revenue; our ability to balance the composition of our revenues and effectively control operating expenses; external factors that may be outside of our control, including health emergencies, like epidemics or pandemics, the Russia-Ukraine and Israel-Hamas conflicts, price inflation, interest rate increases and supply chain inefficiencies; the availability of appropriate financing facilities impacting our operations, financial condition and/or liquidity; our ability to receive contract awards through competitive bidding processes; our ability to maintain standards to enable us to manufacture products to exacting specifications; our ability to enter new markets for our services; our reliance on a small number of customers for a significant percentage of our business; competitive pressures in the markets we serve; changes in the availability or cost of raw materials and energy for our production facilities; restrictions in our ability to operate our business due to our outstanding indebtedness; government regulations and requirements; pricing and business development difficulties; changes in government spending on national defense; our ability to make acquisitions and successfully integrate those acquisitions with our business; our failure to maintain effective internal controls over financial reporting; general industry and market conditions and growth rates; general economic conditions; and other risks discussed in the our periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). Any forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release, except as required by applicable law. Investors should evaluate any statements made by us in light of these important factors.

SOURCE: TechPrecision Corp

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