STOCK-BASED COMPENSATION

12 Months Ended

Mar. 31, 2026

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 7 – STOCK-BASED COMPENSATION

Our board of directors, upon the recommendation of the compensation committee of our board of directors, approved the 2016 TechPrecision Equity Incentive Plan, or the “2016 Plan”, on November 10, 2016. Our stockholders approved the 2016 Plan at the Company’s Annual Meeting of Stockholders on December 8, 2016. The 2016 Plan succeeds the 2006 Plan (as defined below) and applies to awards granted after the 2016 Plan’s adoption by the Company’s stockholders. We have designed the 2016 Plan to reflect our commitment to having best practices in both compensation and corporate governance. The Plan shall terminate on the 10-year anniversary of the effective date, and no Awards under the Plan shall thereafter be granted.

The 2016 Plan authorizes the award of incentive and non-qualified stock options, restricted and unrestricted stock awards, restricted stock units, and performance awards to employees, directors, consultants, and other individuals who provide services to TechPrecision or its affiliates. The purpose of the 2016 Plan is to enable TechPrecision and its affiliated companies to recruit and retain highly qualified employees, directors, and consultants; and to provide those employees, directors, and consultants with an incentive for productivity, and an opportunity to share in the growth and value of the Company. Subject to adjustment as provided in the 2016 Plan, the maximum number of shares of common stock that may be issued with respect to awards under the 2016 Plan is 1,250,000 shares (inclusive of awards issued under the 2006 Long-Term Incentive Plan, or the “2006 Plan”, that remained outstanding as of the effective date of the 2016 Plan). Shares of our common stock subject to awards that expire unexercised or are otherwise forfeited shall again be available for awards under the 2016 Plan.

The fair value of the options we grant is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stock. The average dividend yield over the historical period for which volatility was computed is zero. The risk-free interest rate was selected based upon yields of five-year U.S. Treasury issues. We used the simplified method for all grants to estimate the expected term. We assume that stock options will be exercised evenly over the period from vesting until the awards expire. We account for award forfeitures as they occur. As such, the assumed period for each vesting tranche is computed separately and then averaged together to determine the expected term for the award. On March 31, 2026, there were 60,635 shares available for grant under the 2016 Plan.

The following table summarizes information about options granted during the two most recently completed fiscal years:

						Weighted
						Average
		Weighted		Aggregate		Remaining
	Number Of	Average		Intrinsic		Contractual Life
	Options	Exercise Price		Value		(in years)
Outstanding at April 1, 2024	542,500	$	1.53	$	1,128,825	2.93
Outstanding at March 31, 2025	542,500	$	1.53	$	456,150	2.08
Exercised	(242,500)	$	1.89	$	74,905	—
Outstanding at March 31, 2026	300,000	$	2.11	$	630,462	1.24
Vested or expected to vest at March 31, 2026	300,000	$	2.11	$	630,462	1.24
Exercisable and vested at March 31, 2026	300,000	$	2.11	$	630,462	1.24

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price and the exercise price multiplied by the number of in-the-money options on the measurement date) that would have been received by the option holders had all option holders exercised their options on March 31, 2026 and 2025. This amount changes based on the fair value of the Company’s common stock. On March 31, 2026, there was no remaining unrecognized compensation cost related to stock options. The maximum contractual term is ten years for option grants. Other information relating to stock options outstanding on March 31, 2026 is as follows:

		Weighted
		Average
		Remaining	Weighted			Weighted
	Options	Contractual	Average		Options	Average
Range of Exercise Prices:	Outstanding	Term	Exercise Price		Exercisable	Exercise Price
$2.00-$2.99	300,000	1.24	$	2.11	300,000	$	2.11

Stock Awards

On August 3, 2023, pursuant to the 2016 Plan, we issued 15,000 shares of restricted common stock to our former chief financial officer. Under the terms of the employment agreement, provided employment with the Company continues from the grant date through the applicable vesting dates, 5,000 shares of the restricted stock will vest on each of the first, second, and third anniversaries of the effective employment date of July 17, 2023. Fair value of $111 was measured on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. Stock-based compensation expense will be recognized ratably over the vesting period. Total recognized compensation cost related to this award for the twelve months ended March 31, 2026 was $37. There is $9 of unrecognized compensation cost related to this award which is expected to be recognized over the next three months.

On November 26, 2024, we issued 45,000 shares of restricted common stock to a former chief financial officer. Under the terms of the employment agreement, provided employment with the Company continues from the grant date through the applicable vesting dates, 15,000 shares of the restricted stock would vest on each of the first, second, and third anniversaries of the effective employment date of September 30, 2024. Fair value was measured on the date of grant, and total recognized compensation cost related to this award was $21. Employment with the Company ended in February 2025. As such, all the shares were canceled and returned to the pool of shares authorized for issuance under the 2016 Plan.

On January 24, 2025, pursuant to the 2016 Plan, we awarded 54,880 shares, in the aggregate, of restricted common stock to our four non-employee directors. The common stock vested and become nonforfeitable on December 19, 2025. The grantee must have served as a director as of the vesting date and must have been continuously serving in such capacity from the grant date through the vesting date. During the period commencing on the grant date and ending on the vesting date, the grantee was not permitted to sell, transfer, pledge, assign or otherwise encumber the common stock. Fair value of $180 was measured on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. Stock-based compensation expense was recognized ratably over the vesting period and total recognized compensation cost related to this award for the twelve months ended March 31, 2026 was $135.

On March 31, 2025, pursuant to the 2016 Plan, following the announcement of our newly appointed CFO, we agreed to grant in the amount of $180, restricted shares of our common stock, or 78,261 shares, based on the stock closing price of $2.30. The fair value of $180 will be amortized ratably over a three-year vesting period, following the transition date. Stock-based compensation expense of $60 was recognized for the twelve months ended March 31, 2026. There is $120 of remaining unrecognized compensation cost under this award expected to be recognized over the next twenty-four months.

On October 2, 2025, the Company issued 60,000 shares, in the aggregate, of common stock to certain non-employee directors as compensation awards for services rendered in fiscal 2025 pursuant to agreements with each of the recipients. The shares immediately vested on the issue date and were subsequently registered with the SEC. The effectiveness date for the registration was December 11, 2025. Fair value of $314 was measured on the date of issuance based on the number of shares vested and the quoted market price of the Company’s common stock.

On March 6, 2026, pursuant to the 2016 Plan, the Company issued 67,049 shares, in the aggregate, of common stock to non-employee directors as compensation awards for services rendered in fiscal year 2026 pursuant to agreements with each of the recipients. There were 18,137 shares that were vested immediately, and 48,912 shares that will vest on October 28, 2026. Stock-based compensation expense of $89 was recognized for the twelve months ended March 31, 2026. There is $157 of remaining unrecognized compensation cost under this award expected to be recognized over the next six months.

The total recognized stock-based compensation cost related to all restricted stock awards for the fiscal year ended March 31, 2026 and 2025 was $635 and $103, respectively.