NOTE 9 — DEBT

	June 30, 2016		March 31, 2016
People’s Equipment Loan Facility due April 2021	$	2,929,188	$	—
Utica Credit Loan Note due November 2018	—		2,459,259
Revere Term Loan and Notes due January 2018	2,250,000		2,250,000
Obligations under capital lease	23,634		26,599
Total debt	$	5,202,822	$	4,735,858
Less: Debt issue costs, unamortized	$	142,762	$	47,342
Less: Current portion of long-term debt	$	577,336	$	953,106
Long-term debt, including capital lease	$	4,482,724	$	3,735,410

People’s Capital and Leasing Corp. Equipment Loan Facility

On April 26, 2016, TechPrecision, through Ranor, executed and closed a Master Loan and Security Agreement No. 4180, as supplemented with Schedule No. 0001, or, together, the MLSA, with People’s Capital and Leasing Corp. The MLSA is dated and effective as of March 31, 2016. Loan proceeds were disbursed to Ranor on April 26, 2016. Pursuant to the MLSA, People’s loaned $3,011,648 to Ranor, or the People’s Loan. The People’s Loan is secured by a first lien on certain machinery and equipment of Ranor, or the Equipment Collateral. Payments on the People’s Loan will be made in 60 monthly installments of $60,921 each, inclusive of interest at a fixed rate of 7.90% per annum. The first monthly installment payment was paid on May 26, 2016. A prepayment penalty will apply during the first four years of the loan term. Ranor’s obligations under the MLSA are guaranteed by TechPrecision. The Company covenants to maintain a debt service coverage ratio, or DSCR of at least 1.5 to 1.0 during the term of the People’s Loan. The DSCR will be measured at the end of each fiscal year of the Company.

The People’s Loan may be accelerated upon the occurrence of an “Event of Default” (as defined in the MLSA). Events of Default include (i) the failure to pay any monthly installment payment before the fifth day following the due date of such payment, (ii) the sale, transfer or encumbrance of any Equipment Collateral or other assets of Ranor or TechPrecision (except as otherwise permitted by the terms of the MLSA), (iii) failure to maintain insurance as provided in the MLSA, (iv) failure of Ranor or TechPrecision to observe or perform any obligations under the MLSA or any other obligation to People’s, (v) failure to pay any indebtedness (other than the People’s Loan) or to perform any covenant relating to any such indebtedness, (vi) Ranor’s default under any lease for property where any of the Equipment Collateral is located, (vii) Ranor or TechPrecision cease doing business as a going concern, make an assignment for the benefit of creditors, or commence a bankruptcy or other similar insolvency proceeding, (viii) Ranor or TechPrecision terminate their existence, sell all or substantially all of their assets, or merge into another entity, and (ix) the entry of a judgment against Ranor or TechPrecision in excess of $50,000 which is not fully covered by insurance and which could have a material adverse effect on Ranor or TechPrecision. Some of the Events of Default are subject to certain cure periods.

In connection with the MLSA, $2,653,353 of the proceeds from the People’s Loan were disbursed to Utica Leaseco, LLC, or Utica, as payment in full for principal and interest under the existing Loan and Security Agreement, or LSA. People’s retained a holdback in the amount of $182,763. The holdback was released to Ranor on July 6, 2016 after the Company reported a DSCR of 1.82 to 1.0 as of March 31, 2016. Ranor retained $175,532 of the proceeds from the People’s Loan for general corporate purposes.

Term Loan and Security Agreement

On December 22, 2014, TechPrecision, Ranor and Revere High Yield Fund, LP, or Revere, entered into the Term Loan and Security Agreement, or TLSA, pursuant to which Revere loaned an aggregate of $2.25 million to Ranor under two promissory notes that were secured by certain assets of Ranor. On January 22, 2016, TechPrecision and Ranor entered into the Note and Other Loan Documents Modification Agreement No. 2 with Revere, or the Second Modification Agreement, which made significant amendments to the terms of the TLSA, including extending the maturity date of the term loans made pursuant to the TLSA to January 22, 2018. In connection with the Second Modification Agreement, Ranor executed an Amended and Restated Term Loan Note in the aggregate principal amount of $1.5 million, or the Amended and Restated First Loan Note, and an Amended and Restated Term Loan Note in the aggregate principal amount of $750,000, or the Amended and Restated Second Loan Note, and together with the Amended and Restated First Loan Note, the Amended and Restated Notes, each in favor of Revere and each dated January 22, 2016.

On April 26, 2016, TechPrecision and Ranor executed and closed on a Loan Documents Modification Agreement No. 3, or the Third Modification Agreement, with Revere. The Third Modification Agreement, dated and effective as of March 31, 2016, further amends the TLSA. The Third Modification Agreement, among other things, (i) permits Ranor to pay off in its entirety the indebtedness owed under the LSA with Utica with proceeds from the People’s Loan, (ii) adds the People’s security interest as a “Permitted Lien” under the TLSA, (iii) deletes certain references to Utica, the LSA with Utica and loan documents related to the LSA with Utica and replaces those references with new definitions relating to the People’s Loan, (iv) adds the People’s Loan and TechPrecision’s guaranty of the People’s Loan as “Existing Indebtedness” under the TLSA, (v) requires Ranor, People’s and Revere to enter into an Intercreditor and Subordination Agreement to, among other things, establish the relative priorities between Revere and People’s with regard to certain assets of Ranor, (vi) requires Ranor to cause People’s and Revere to enter into a Mortgagee’s Disclaimer and Consent to, among other things, require that Revere permit People’s access to certain real property owned by Ranor and mortgaged to Revere as collateral for the TLSA in the event that Ranor defaults on the People’s Loan and Revere has taken possession of the real property, and (vii) includes a reaffirmation of TechPrecision’s guarantee of Ranor’s obligations under the TLSA.

Other than as so amended by the First Modification Agreement, the Second Modification Agreement, and the Third Modification Agreement, the terms and conditions of the TLSA remain in full force and effect.

Pursuant to the TLSA, as amended by the Second Modification Agreement and Third Modification Agreement, Ranor is subject to certain affirmative and negative covenants, including a minimum cash balance covenant which requires that we maintain minimum month end cash balances that range from $640,000 to $1,000,000. We were required to maintain a cash balance of $779,968 and $786,212 at June 30, 2016 and March 31, 2016, respectively. We were in compliance with all covenants under the TLSA at June 30, 2016 and March 31, 2016.

Loan and Security Agreement

On April 26, 2016, the obligations under the LSA were paid in full to Utica prior to the maturity date. As such, Ranor was required to pay Utica deferred interest in an amount of $249,000 as provided under the terms of the LSA. In connection with the MLSA, $2,653,353 of the proceeds from the People’s Loan were disbursed to Utica, as payment in full for principal and interest under the LSA.

Capital Lease

We entered into a capital lease in April 2012 for certain office equipment. This lease was amended in fiscal 2014 when we purchased a replacement copier at Ranor. The lease, as amended, will expire in March 2018, bears interest at 6.0% per annum and requires monthly payments of principal and interest of $1,117. The amount of the lease recorded in property, plant and equipment, net as of June 30, 2016 and March 31, 2016 was $20,203 and $23,124, respectively.