Cycle Country Accessories Corp.’s board Chairman Bob Hancher Jr., admitted to a misappropriation of funds and resigned from the board, according to a press release.
The misappropriation was discovered through an audit of the company’s financial statements for the period ending Sept. 30.
In October 2008, Hancher recommended a repurchase of some Cycle Country shares and indicated that he would handle such repurchases through an affiliated company and a company with whom he had worked in the past. These entities were paid a total of $570,000. However, after irregularities were discovered, Hancher acknowledged that he had received the funds but did not use $400,000 of the funds to purchase company stock.
As a result, Cycle Country won’t be able to file its annual Form 10-K report on time and also will need to restate its financial statements for the first three fiscal quarters of 2009.
An investigation is continuing and Cycle Country said it intends to recover the amounts due to it as a result of these events.