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CPI Aero shares fall after receiving delisting notice

CPI Aerostructures received a delisting notice because the

CPI Aerostructures received a delisting notice because the company failed to file a quarterly financial report for the period ended March 31. Credit: Barry Sloan

Shares of CPI Aerostructures Inc. tumbled Wednesday after the defense contractor said it had received a delisting notice from the New York Stock Exchange.

The Edgewood company, which has grappled with ongoing accounting issues in recent years, made the disclosure in a news release and filing with the Securities and Exchange Commission after Tuesday's market close.

The May 25 delisting notice was issued because the company failed to file a quarterly financial report for the period ended March 31.

CPI Aero's stock fell 5.3% to close Wednesday at $3.75.

The 41-year-old company said that under the rules of stock exchange operator NYSE American LLC, CPI Aero's stock will continue to be listed and it will have six months to file the quarterly report and return to compliance.

On May 17, the company had announced it would be unable to file the report by the May 24 deadline because of absences related to COVID-19 and other issues.

CPI Aero president and chief executive Doug McCrosson said the company plans to return to compliance.

"CPI intends to file its delayed quarterly report within the prescribed timeline and regain compliance," he said in an email.

In April 2020, the NYSE issued a previous delisting notice to the company, which regained compliance in the third quarter of that year.

The SEC subpoenaed CPI Aero's records in May 2020 in connection with an investigation into its restated financial statements, but decided against pursuing enforcement action.

Upheaval in the company's top financial managers has accompanied the disarray in its financial reporting.

Longtime chief financial officer Vincent Palazzolo departed in November 2019. In February 2020, Palazzolo's successor, Dan Azmon resigned. Thomas Powers, a former executive at aerospace manufacturer Triumph Group, is serving as CPI Aero's acting CFO.

CPI Aero, with 267 employees as of Dec. 31, makes structural assemblies for the E-2D Advanced Hawkeye surveillance aircraft, the A-10 Thunderbolt attack jet and the UH-60 Black Hawk helicopter.

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