We are investigating CPI Aerostructures, Inc. (CVU) (“CPI” or the “Company”) for potential violations of the federal securities laws.
On February 8, 2019, CPI filed a Form 8-K with the SEC, reporting that its previously filed quarterly report for the third quarter of 2018 should no longer be relied upon. Specifically, CPI disclosed that during the three and nine months ended September 30, 2018, the Company’s revenue was overstated by $900,000 to $950,000, net income was overstated by $725,000 to $775,000, and as a result, earnings per share were overstated by $0.09 per share for each such period. CPI also disclosed that management determined that the Company had a material weakness in its internal control over financial reporting as of September 30, 2018 and that its disclosure controls and procedures were not effective. On this news, CPI’s stock price fell $0.59 per share, or 8.51%, to close at $6.34 per share on February 8, 2019. Then, on February 14, 2020, CPI issued a press release, entitled “CPI Aerostructures to Restate Fiscal 2018 and Year-to-Date Fiscal 2019 Financial Statements as a Result of Errors in Connection With Revenue Recognition Under ASC Topic 606,” which announced that its financial statements for the fiscal year 2018 and year-to-date for 2019 could no longer be relied upon. On this news, CPI’s stock price fell $1.80 per share, or 26.99%, to close at $4.87 per share on February 14, 2020.