<SEC-DOCUMENT>0001144204-14-034850.txt : 20140623
<SEC-HEADER>0001144204-14-034850.hdr.sgml : 20140623
<ACCEPTANCE-DATETIME>20140602091655
ACCESSION NUMBER:		0001144204-14-034850
CONFORMED SUBMISSION TYPE:	SD
PUBLIC DOCUMENT COUNT:		2
<RULE>
<RULE-NAME>13p-1
<ITEM>
<ITEM-NUMBER>1.01
<ITEM-PERIOD>20131231
</ITEM>
<ITEM>
<ITEM-NUMBER>1.02
<ITEM-PERIOD>20131231
</ITEM>
</RULE>
FILED AS OF DATE:		20140602
DATE AS OF CHANGE:		20140602

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CPI AEROSTRUCTURES INC
		CENTRAL INDEX KEY:			0000889348
		STANDARD INDUSTRIAL CLASSIFICATION:	AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728]
		IRS NUMBER:				112520310
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		SD
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11398
		FILM NUMBER:		14882392

	BUSINESS ADDRESS:	
		STREET 1:		200A EXECUTIVE DR
		CITY:			EDGEWOOD
		STATE:			NY
		ZIP:			11717
		BUSINESS PHONE:		5165865200
</SEC-HEADER>
<DOCUMENT>
<TYPE>SD
<SEQUENCE>1
<FILENAME>v380206_sd.htm
<DESCRIPTION>SD
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>______________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM SD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Specialized
Disclosure Report</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><U>CPI AEROSTRUCTURES, INC.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact Name of Registrant as Specified in
Charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 33%; text-align: center"><FONT STYLE="font-size: 10pt"><U>New York</U></FONT></TD>
    <TD STYLE="width: 34%; text-align: center"><FONT STYLE="font-size: 10pt"><U>001-11398</U></FONT></TD>
    <TD STYLE="width: 33%; text-align: center"><FONT STYLE="font-size: 10pt"><U>11-2520310</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(State or Other Jurisdiction </FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(Commission </FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(IRS Employer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">of Incorporation)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">File Number)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Identification No.)</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 67%; text-align: center"><FONT STYLE="font-size: 10pt"><U>91 Heartland Boulevard, Edgewood, New York</U></FONT></TD>
    <TD STYLE="width: 33%; text-align: center"><FONT STYLE="font-size: 10pt"><U>11717</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Address of Principal Executive Offices) </FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(Zip Code)</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><U>Vincent Palazzolo (631) 586-5200</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name and telephone number, including area
code, of the person to contact in connection with</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">this report.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box to indicate the rule pursuant to which
this form is being filed, and provide the period to which the information in this form applies:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">&#120;</FONT><FONT STYLE="font-size: 10pt"> Rule 13p-1 under the Securities
Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2013. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Section 1 - Conflict Minerals Disclosure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 96px; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Item 1.01.</B></FONT></TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Conflict Minerals Disclosure and Report.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A copy of CPI Aerostructures, Inc.&rsquo;s Conflict Minerals
Report is filed as Exhibit 1.02 hereto and is publicly available at www.cpiaero.com under the Investor Relations tab.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 96px; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Item 1.02.</B></FONT></TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Exhibit.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify">See
Item 2.01 of this Form.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify"><B>Section
2 - Exhibits</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><B>Item 2.01.</B></TD><TD STYLE="text-align: justify"><B>Exhibits.</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following exhibit is filed as part of this report:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Exhibit 1.02- Conflict Minerals Report as required by Items
1.01 and 1.02 of this Form.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SIGNATURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dated: June 2, 2014</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <TD>&nbsp;</TD>
    <TD COLSPAN="2">CPI AEROSTRUCTURES, INC.</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 46%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Vincent Palazzolo&#9;&#9;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name: Vincent Palazzolo</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title: Chief Financial Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<TYPE>EX-1.02
<SEQUENCE>2
<FILENAME>v380206_ex1-02.htm
<DESCRIPTION>EX-1.02
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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Exhibit 1.02 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CPI Aerostructures, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Conflict Minerals Report</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>For The Year Ended December 31, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This Conflict Minerals Report (&ldquo;Report&rdquo;)
for the year ended December 31, 2013 has been prepared by the management of CPI Aerostructures, Inc. (hereinafter referred to as
&ldquo;CPI Aero,&rdquo; &ldquo;we,&rdquo; &ldquo;us&rdquo; or &ldquo;our&rdquo;) and is presented to comply with Rule 13p-1 under
the Securities Exchange Act of 1934 (the &ldquo;Rule&rdquo;). The Rule was adopted by the Securities and Exchange Commission to
implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 and imposes reporting obligations on registrants whose manufactured products contain &ldquo;conflict
minerals&rdquo; which are necessary to the functionality or production of their products. &ldquo;Conflict minerals,&rdquo; for
purposes of the Rule, are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited
to tin, tantalum, tungsten, and gold (&ldquo;3TG&rdquo;) for the purposes of this Report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As discussed below, the result of our reasonable
country of origin inquiry and due diligence respecting conflict minerals contained in our products was that we were not able to
obtain adequate information from our supply chain to be able to make a determination as to the source of conflict minerals that
may be contained in our products and therefore, we have determined that such products are &ldquo;DRC conflict undeterminable.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Business Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">CPI Aero is a United
States manufacturer of structural aircraft parts for fixed wing aircraft and helicopters in both the commercial and defense markets.
Within the global aerostructure supply chain, we are either a Tier 1 supplier to aircraft Original Equipment Manufacturers or a
Tier 2 subcontractor to major Tier 1 manufacturers. We also are a prime contractor to the United States Department of Defense,
primarily the Air Force. In conjunction with our assembly operations, we provide engineering, program management, supply chain
management, and Maintenance, Repair &amp; Overhaul services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have approximately 300 employees all
in the United States. We were incorporated in New York in 1980. Our principal executive offices are located at 91 Heartland Blvd.,
Edgewood, NY 11717.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Products and Supply Chain Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our products include skin panels, leading
edges, flight control surfaces, engine components, wing tips, cowl doors, nacelle assemblies and inlet assemblies, as well as other
structural and mechanical assemblies. We conducted an analysis of our products and found that the above SEC defined &ldquo;conflict
minerals&rdquo;, or 3TG, may be found in our products containing wiring or lights, as well as in trace amounts as a result of the
refining process of various metals and metallic alloys. Therefore, the products that we manufacture are subject to the reporting
obligations of Rule 13p-1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our component and outsourced manufacturing
supply chain consists of 216 suppliers. We rely upon our suppliers to provide information on the origin of the 3TG contained in
components and materials supplied to us, including sources of 3TG that are supplied to them from sub-tier suppliers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Reasonable Country of Origin Inquiry
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Despite having conducted a good faith reasonable
country of origin inquiry (&ldquo;RCOI&rdquo;), CPI Aero has concluded that our supply chain remains &ldquo;DRC conflict undeterminable&rdquo;.
We have reached this conclusion because we have been unable to determine the origin of all of the 3TG used in our components parts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to the breadth and complexity of our
products and respective supply chain, it will take additional time for many of our suppliers to verify the origin of all of the
minerals. Using our supply chain due diligence processes, driving accountability within the supply chain by leveraging the industry
standard Conflict-Free Smelter Initiative&rsquo;s Conflict-Free Smelter Program, and continuing our outreach efforts we hope to
further develop transparency into our supply chain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Due Diligence Program</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our due diligence processes and efforts
have been developed in conjunction with the Second Edition of The Organization for Economic Co-operation and Development Due Diligence
Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (&ldquo;OECD Guidance&rdquo;) and
the related supplements for gold and for tin, tantalum and tungsten. We designed our due diligence process, management and measures
to conform in all material respects with the framework OECD Guidance. The OECD Guidance calls for diligence measures to (i) establish
strong company management systems, (ii) identify and assess risk in the supply chain, (iii) design and implement a strategy to
respond to identified risks, (iv) carry out independent third-party audit of supply chain due diligence at identified points in
the supply chain, and (v) report on supply chain due diligence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Establish Strong Company Management
Systems</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">CPI Aero has established a management system
for conflict minerals. We developed and implemented a Conflict Minerals Policy. We also integrated a responsible sourcing of minerals
requirement into our Conflict Minerals Policy and Supplier Code of Conduct pursuant to which our suppliers are expected to provide
the 3TG sourcing information to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We established a Conflict Minerals Task
Force led by our Chief Financial Officer, Vice President of Global Supply Chain and Director of Administration and a team of subject
matter experts from relevant functions such as, purchasing, quality assurance and manufacturing. The team of subject matter experts
is responsible for implementing our conflict minerals compliance strategy,<B> </B>which includes communication with and engagement
of our suppliers, record keeping and escalation procedures. As part of the record-keeping function, CPI Aero created and will maintain
a database of the information collected through our supplier surveys (discussed in more detail below) in our Global Environmental
Management System.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Senior management is regularly briefed
about the progress and results of the Task Force&rsquo;s due diligence efforts. Senior management then reports quarterly to the
Audit Committee of our Board of Directors with respect to our conflict minerals due diligence efforts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Identify and Assess Risk in the Supply
Chain</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Because of our size, the complexity of
our products, and the constant evolution of our supply chain, it is difficult to identify suppliers upstream<B> </B>from our direct
suppliers. We rely on supplier&rsquo;s responses to our supply chain survey to provide us with information about the source of
conflict minerals contained in the components supplied to us. Our direct suppliers are similarly reliant upon information provided
by their suppliers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">CPI Aero has performed a comprehensive
analysis of our product components, and the role that suppliers play throughout our manufacturing and product delivery processes.
As a result, of our total 216 component and outsourced manufacturing suppliers, we identified 118 suppliers that provide components
or engage in manufacturing activities that may contain 3TG. We conducted a survey of these 118 suppliers using the template developed
jointly by Electronic Industry Citizenship Coalition&reg; (EICC&reg;) and The Global e-Sustainability Initiative (GeSI), known
as the CFSI Reporting Template (the &ldquo;Template&rdquo;) to facilitate disclosure and communication of information regarding
smelters that provide material to a company&rsquo;s supply chain. The Template is being widely adopted by many companies in their
due diligence processes related to conflict minerals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Design and Implement a Strategy to Respond
to Risks</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As described above, the status and results
of our due diligence efforts are regularly reported to senior management and the Audit Committee of our Board of Directors. To
the extent any of our suppliers are discovered, through the course of our due diligence efforts, to source from non-Conflict Free
smelters, we will work with them to move towards using Conflict Free smelters within a reasonable time frame. The time frame will
depend on the criticality of the specific part and the availability of alternative suppliers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Carry out Independent Third Party Audit
of Supply Chain Due Diligence at Identified Points in the Supply Chain</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">CPI Aero does not have a direct relationship
with 3TG smelters and refiners, nor do we perform direct audits of these entities that provide our supply chain the 3TG. However,
we do rely upon industry efforts to influence smelters and refineries to participate in the Conflict-Free Smelter Program developed
by EICC&reg; and GeSI.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Report on Due Diligence Process</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Form SD to which this Report is an
exhibit and this Report are publicly available at www.cpiaero.com under the Investor Relations tab.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>2013 Due Diligence Results</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As discussed above, we did not survey our
entire known component and outsourced manufacturing supply chain, which consisted of 216 suppliers. Instead, we began by analyzing
our product components and the role of our direct suppliers in relation to such product components. Through this process, we identified
118 suppliers that provide components or engage in manufacturing activities that may contain 3TG. We sent each such supplier a
supply chain survey based on the Template described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For purposes of our 2013 RCOI and due diligence
efforts, we accepted supply chain survey responses through May 10, 2014. We received responses from 97 of these suppliers. 86 such
suppliers indicated that the products they supplied to us did not contain any 3TG. Of the 11 remaining suppliers who responded,
each reported that 3TG was present in the products they supplied to us but indicated that they were unable to determine the country
of origin or mine for their products at the time. 21 suppliers have not responded to our supply chain survey.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accordingly, at this time we have not been
able to obtain adequate information from our supply chain to make a determination as to the source of conflict minerals that may
be contained in our products and therefore, we have determined that our products are &ldquo;DRC conflict undeterminable.&rdquo;
Due to the inability of our suppliers to identify the source of their 3TG components, we are unable to determine the facilities
used to process 3TG that may be contained in our products, the country of origin, or the mine or location of origin for these products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with the Rule since our products
are &ldquo;DRC conflict undeterminable,&rdquo; this Report does not include an independent private sector audit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Future Steps to Mitigate Conflict Minerals
Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As we move towards refining our due diligence
program, we intend to enhance supplier communication, training and escalation processes to improve due diligence data accuracy
to continue to mitigate any possible risk that the necessary conflict minerals in our products could benefit armed groups in the
Democratic Republic of the Congo or adjoining countries (the &ldquo;Conflict Region&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are also in the process of developing
and implementing additional strategies to support the objectives of the United States regulations on the supply of &ldquo;conflict
minerals.&rdquo; Our commitment includes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 12pt">&bull;</FONT></TD><TD STYLE="text-align: justify">developing policies and processes toward preventing
the use of conflict minerals or derivative metals necessary to the functionality or production of our product(s) that finance
or benefit armed groups in the Conflict Region;</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 12pt">&bull;</FONT></TD><TD STYLE="text-align: justify">not knowingly procuring specified minerals that originate
from facilities in the Conflict Region that are not certified as conflict free;</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 12pt">&bull;</FONT></TD><TD STYLE="text-align: justify">working with our suppliers whose products contain
3TG to establish their own policies, due diligence frameworks, and management systems consistent with the OECD Guidance, and a
commitment to requiring the same of their suppliers.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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