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Cherokee Delays Annual Report

Cites ineffective "controls" in filing with SEC.

The Cherokee Group Inc. missed the Thursday deadline for the filing of its annual report with the Securities and Exchange Commission because of what it described as insufficient accounting controls.

The company told the SEC that its internal mechanisms over financial reporting as of the Feb. 2 conclusion of its fiscal year “were not effective with respect to certain controls. The time and resources required of management to address these deficiencies has impacted the company’s ability to timely file its Form 10-K without unreasonable effort or expense.”

Cherokee said the annual report will be filed “as soon as practical.”

With a public float of about $93 million, based on its closing stock price of $13.01 Thursday and about 7.2 million shares in public hands, Cherokee’s annual report was due on Thursday, 75 days after the conclusion of its fiscal year. With a float of $75 million or less, it would have had an additional 15 days to file. Public companies with a float of $700 million or more have 60 days to submit the paperwork.

The company said no “significant change” in financial results for the prior fiscal year is expected when the 10-K is filed.

Jason Boling became chief financial officer of Cherokee last month following the resignation in February of Mark DiSiena. Ernst & Young LLC was appointed the company’s auditor in January after the dismissal of Moss Adams LLP in December.

Henry Stupp, chief executive officer of Cherokee, declined comment on the filing.