Statement Regarding Forward Looking Disclosure

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:

? our reliance on individual purchase orders, rather than long-term contracts, to

? our ability to balance the composition of our revenues and effectively control

external factors, including the COVID-19 pandemic, Russia's invasion of

? Ukraine, high inflation and increasing interest rates, that may be outside of

? the impacts of the COVID-19 pandemic and government-imposed lockdowns in

? 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

? our ability to enter new markets for our services;

? our reliance on a small number of customers for a significant percentage of our

? competitive pressures in the markets we serve;

? changes in the availability or cost of raw materials and energy for our

? restrictions in our ability to operate our business due to our outstanding

? pricing and business development difficulties;

? changes in government spending on national defense;

? our ability to make acquisitions and successfully integrate those acquisitions

? general industry and market conditions and growth rates;

? unexpected costs, charges or expenses resulting from the recently completed

those risks discussed in "Item 1A. Risk Factors" and elsewhere in this Annual

? Report on Form 10-K, as well as those described in any other filings which we

Critical Accounting Policies and Estimates

Revenue and Related Cost Recognition

reported as work in process, a component of inventory, in the consolidated balance sheet. Pre-contract fulfillment costs requiring capitalization are not material.

As of March 31, 2022, our federal net operating loss carryforward was approximately $17.1 million. U.S. tax laws limit the time during which these carryforwards may be applied against future taxes.

See Note 17, Accounting Standards Update, in the Notes to the Consolidated Financial Statements under "Item 8. Financial Statements and Supplementary Data", for a discussion of recently adopted new accounting guidance and new accounting guidance not yet adopted.

Percentages in the following tables and throughout this "Results of Operations" section may reflect rounding adjustments.

Fiscal Years Ended March 31, 2022 and 2021

The following table presents net sales, gross profit and gross margin, consolidated and by reportable segment:

heavy lift helicopters. Stadco had remaining performance obligations, or backlog, of $23.3 million that is expected to be delivered over the next 36 months.

Gross Profit and Gross Margin

Selling, General and Administrative (SG&A) Expenses

Ranor - Advisory fees, travel expenses and other office costs increased by a total of $0.6 million due to a return to pre-pandemic travel and business activity.

Stadco - The increase was primarily due to the inclusion of Stadco operations since August 25, 2021.

Stadco - New project startups and related production activities resulted in unfavorable throughput, higher unabsorbed overhead and operating losses of $1.1 million. We expect better throughput and overhead absorption in fiscal 2023.

Corporate and unallocated - Corporate expenses were higher in fiscal 2022, primarily from outside advisory fees ($0.7 million) in connection with the Stadco acquisition.

(70,187) (47) % Amortization of debt issue costs $ (48,251) $ (51,399) $ 3,148

On May 12, 2021, as authorized by Section 1106 of the CARES Act, the SBA remitted to Berkshire Bank, the lender of record, a payment of principal in the amount of $1,317,100, for forgiveness of the Company's PPP loan. The funds credited to the PPP loan paid this loan off in full.

For fiscal year 2022 the Company recorded a tax benefit of $192,355, a result of lower taxable income. In fiscal 2021, the Company recorded tax expense of $104,880.

As a result of the foregoing, for fiscal 2022, we recorded net loss of $349,834, or $0.01 per share basic and fully diluted, compared with net income of $320,631, or $0.01 per share basic and fully diluted in fiscal 2021.

The next table summarizes changes in cash by primary component in the cash flows statements for the fiscal years ended:

Net (decrease) increase in cash $ (1,079) $ 1,200 $ (2,279)

We invested approximately $0.6 million in new factory machinery and equipment in fiscal 2021.

The following contractual obligations associated with our normal business activities are expected to result in cash payments in future periods, and include the following material items at March 31, 2022:

We enter into various commitments with suppliers for the purchase of raw

materials and work supplies. In accordance with U.S. GAAP, these purchase

obligations are not reflected in the accompanying consolidated balance sheets. ? Our outstanding unconditional contractual commitments, including for the

purchase of raw materials and supplies goods, totaled $5.8 million, all of it

due to be paid in fiscal 2023. These purchase commitments are in the normal

Our long-term debt obligations, including fixed and variable-rate debt, totaled ? $7.4 million, with $4.2 million due in fiscal 2023, $0.5 million due in 2024

Our operating lease obligation of $7.6 million is for land and buildings at our ? Stadco operation through 2030; $0.8 million is due in fiscal 2023, $0.9 million

due in 2024 and $0.9 million due in 2025.

(1) Includes amortization of debt issue costs.

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