Legal & controls
Item 3 and Item 9A as filed · every verdict is the registrant’s own sentence, printed below it · a filing that fails an extraction gate reads “not extracted”
| Fiscal year | Filed | Item 3 | ICFR | disclosure controls | material weakness | Filing |
|---|---|---|---|---|---|---|
| 2025-12-31 | 2026-03-31 | none stated | not extracted | not extracted | disclosed | EDGAR |
Item 3 · From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. As of the date of this Annual Report on Form 10-K, the Company is not a party to any material legal proceedings. Item 9A · ICFR · Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective at the reasonable assurance level as of December 31, 2025. Item 9A · disclosure controls · Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's (SEC) rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Item 9A · material weakness · During the second quarter, a material weakness was identified concerning the application of ASC-470 – Debt, more specifically as it relates to 470-10-45-11, that if a company is in violation of a debt covenant and it is probable that the borrower will not be able to comply with the covenant at measurement dates within the next twelve months, this debt shall be classified as short term. | ||||||
| 2024-12-31 | 2025-03-31 | in the notes | not extracted | not extracted | disclosed | EDGAR |
Item 3 · This information is set forth in Note 16 to our Consolidated Financial Statements, which is hereby incorporated by reference. Item 9A · ICFR · Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective at the reasonable assurance level as of December 31, 2024. Item 9A · disclosure controls · Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's (SEC) rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Item 9A · material weakness · In connection with management’s evaluation of the Company’s internal control over financial reporting described above, management identified a material weakness in its internal controls for the twelve months ended December 31, 2023 relating to the inadequate review, assessment of and reporting of the Company’s temporary differences between book and taxable income. | ||||||
| 2023-12-31 | 2024-04-08 | in the notes | NOT effective | NOT effective | disclosed | EDGAR |
Item 3 · This information is set forth in Note 16 to our Consolidated Financial Statements, which is hereby incorporated by reference. Item 9A · ICFR · Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective at the reasonable assurance level as of December 31, 2023 because of the material weakness described below. Item 9A · disclosure controls · Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were not effective due to the material weakness described below. | ||||||
| 2022-12-31 | 2023-04-14 | described here | NOT effective | NOT effective | disclosed | EDGAR |
Item 3 · Class Action Lawsuit A consolidated class action lawsuit (captioned Rodriguez v. CPI Aerostructures, Inc., et al., No. 20-cv-01026) was filed in the U.S. District Court for the Eastern District of New York against the Company; Douglas McCrosson, the Company’s former Chief Executive Officer; Vincent Palazzolo, the Company’s former Chief Financial Officer; and the two underwriters of the Company’s October 16, 2018 offering of common stock, Canaccord Genuity LLC and B. Riley FBR. The Amended Complaint in the action asserted claims on behalf of two plaintiff classes: (i) purchasers of the Company’s common stock issued pursuant to and/or traceable to the Company’s offering conducted on or about October 16, 2018; and (ii) purchasers of the Company’s common stock between March 22, 2018 and February 14, 2020. The Amended Complaint alleged that the defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act by negligently permitting false and misleading statements to be included in the registration statement and prospectus supplements issued in connection with its October 16, 2018 securities offering. The Amended Complaint also alleged that the defendants violated Sections 10(b)… Item 9A · ICFR · Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective at the reasonable assurance level as of December 31, 2022 because of the material weaknesses described below. Item 9A · disclosure controls · Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were not effective due to the material weaknesses described below. | ||||||
| 2021-12-31 | 2022-08-19 | described here | NOT effective | NOT effective | remediated (prior year) | EDGAR |
Item 3 · Settlement of Working Capital Dispute In December 2018, the Company completed the acquisition of WMI from Air Industries for a purchase price of $7.9 million, subject to a potential post-closing working capital adjustment. Of the purchase price, $2 million was placed in escrow at closing and was to be released after the completion of the working capital adjustment and for indemnification contingencies. Air Industries objected to the Company’s calculation of the post-closing working capital adjustment and rejected the determination of BDO, the independent accountant appointed by the parties to resolve the dispute. On September 27, 2019, the Company filed a notice of motion in the Supreme Court of the State of New York, County of New York, against Air Industries seeking, among other things, a judgment against Air Industries in the amount of approximately $4.1 million. In October 2019, Air Industries and the Company jointly authorized the release to the Company of approximately $619,000 from escrow, which represented the value of certain undisputed items. The Company and Air Industries entered into a settlement agreement dated as of December 23, 2020, to resolve the post-closing worki… Item 9A · ICFR · Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective at the reasonable assurance level as of December 31, 2021 because of the material weakness described below. Item 9A · disclosure controls · Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were not effective due to the material weaknesses described below. | ||||||
5 of 5 annual reports on record have their filing text cached on this host; the rest are listed with their EDGAR link and no extraction, because this surface never fetches from SEC on a page load.
- Item 3 and Item 9A are located in the filing HTML already cached on this host and read with the same line-anchored item matcher and largest-gap body disambiguation the filing-narrative pass uses for Item 1A and Item 7 — no fetch, no model, no summarization.
- A heading is accepted as a section only when it is not a table-of-contents row (a trailing page number), not a quoted reference in prose, and names its own section; the span must then clear a per-item length band and carry readable text after the heading. Anything that fails a gate is served as 'not extracted' with the reason — never as a default value.
- An effectiveness conclusion is read only from a sentence that names its own control set (disclosure controls and procedures, or internal control over financial reporting) and states an outcome. Conditional sentences — the standard limitations paragraph and forward-looking remediation language — are excluded, because they are hypotheses rather than conclusions.
- When a filing's own sentences disagree — an effective conclusion beside an unremediated material-weakness disclosure, or two conclusions of opposite sign — no verdict is asserted. A wrong 'controls were effective' reading is worse than no reading.
- Every verdict is shown beside the verbatim sentence it was read from. The excerpt is the filing's own words, capped at 1,200 characters; the filing itself is one link away.