## **FORM 10-K/A**

**(Amendment No.1)**

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.  20549**

 

**(Mark One)**
| **x**      | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934**                                                                                                                                                                                                                                       |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                 |
| ** ** | **For the fiscal year ended June 30, 2008**                                                                                                                                                                                                                                                                                           |
| ** ** |                                                                                                                                                                                                                                                                                                                                       |
| ** ** | **OR**                                                                                                                                                                                                                                                                                                                                     |
| ** ** |                                                                                                                                                                                                                                                                                                                                       |
| **o**      | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934**                                                                                                                                                                                                                                   |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                 |
| ** ** | **for the  transition period from                            to                         ** |

 

**Commission filenumber:  0-51715**

 

**SPORT-HALEY, INC.**

(Exact Name of Registrant asSpecified in Its Charter)

 
| **Colorado**                              | **84-1111669**         |
|-------------------------------------------|------------------------|
| (State or Other  Jurisdiction of          | (I.R.S. Employer       |
| Incorporation or  Organization)           | Identification Number) |
|                                      |                   |
| **4600 East 48th Avenue**                 |                   |
| **Denver, Colorado**                      | **80216-3215**         |
| (Address of Principal  Executive Offices) | (Zip Code)             |

 

Registrant’stelephone number, including area code:  **(303) 320-8800**

 

Securitiesregistered pursuant to Section 12(b) of the Exchange Act:

 
| **Title of each class**                   | ** ** | **Name of each exchange on which registered** |
|-------------------------------------------|------------|-----------------------------------------------|
| **Common Stock, no par value per  share** | ** ** | **NASDAQ Capital Market****SM**               |

 

Securitiesregistered pursuant to section 12(g) of the Exchange Act:

**None**

 

Indicate by check markwhether the registrant is a well-known seasoned issuer, as defined in Rule 405of the Securities Act.

Yeso No x

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Act.

Yeso No x

 

Indicate by checkmarkwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the Registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.

Yesx No o

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer or a smaller reporting company. See the definitions of“large accelerated filer,” “accelerated filer,” and “smaller reporting company”in Rule 12b-2 of theExchange Act.

 

| Large Accelerated Filer o | Accelerated Filer o | Non-accelerated Filer o                         | Smaller Reporting Company x |
|---------------------------|--------------------------|-------------------------------------------------|----------------------------------|
|                      |                     | (Do not check if a  smaller  reporting company) |                             |

 

Indicate by check mark whetherthe registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).

Yeso No x

 

As of December 31,2007, the last business day of the registrant’s most recently completed secondfiscal quarter, the aggregate market value of the 1,896,373 shares of CommonStock (the Registrant’s only common equity) held by non-affiliates was$3,963,000 based on the closing sale price of the Registrant’s Common Stock onthe NASDAQ Global MarketSM onsuch date. For purposes of the foregoing calculation only, each of theRegistrant’s officers and directors is deemed to be an affiliate. Thisdetermination of affiliate status is not a conclusive determination for otherpurposes.

 

There were 2,284,490 sharesof the Registrant’s Common Stock outstanding at the close of business on October 10,2008.

 

DOCUMENTSINCORPORATED BY REFERENCE:

**None**

 

 

 

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**PART I**

 

**Explanatory Note**

 

This amendment to the annual report of Sport-Haley, Inc.on Form 10-K for the fiscal year ended June 30, 2008, is being madeto amend certain matters in Part II Item 9A. The remainder of the Company’sForm 10-K, previously filed on October 14, 2008 (the “Original Form 10-K”),has not been changed or amended.

 

This amendment updates our disclosures in Part IIItem 9A with regard to management’s assessment of the Company’s internalcontrol over financial reporting as of June 30, 2008. Except as otherwiseexpressly noted herein, this Amendment to Annual Report on Form 10-K/Adoes not reflect events occurring after the October 14, 2008, filing ofour Original Form 10-K, except to reflect the changes discussed in thisamendment. The Registrant does not undertake to update any item on that AnnualReport other than those items set forth below. Accordingly, this amendmentshould be read in conjunction with the Original Form 10-K.

 

The Company is also filing as exhibits to thisAmendment the certifications pursuant to Rule 13a-14(a). Because nofinancial statements are contained within this Amendment, the Company is notincluding those parts of the Rule 13a-14(a) certifications pertainingto financial statements and is not including certifications pursuant to Rule 13a-14(b) (18U.S.C. §1350). Except for the amendment described above, this Amendment doesnot modify or update any other disclosures in, or exhibits to, the Original Form 10-K.

 

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**PART II**

 

**ITEM 9A.****     CONTROLSAND PROCEDURES**

 

**(a)****   Evaluation of DisclosureControls and Procedures.**We designed our disclosure controls and proceduresto provide reasonable assurance of achieving our desired disclosure controlobjectives. We maintain disclosure controls and procedures to ensure thatinformation required to be disclosed in the reports we file pursuant to theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), are recorded,processed, summarized and reported within the time periods specified in the rules andforms of the Securities and Exchange Commission, and that such information isaccumulated and communicated to our management, including our Chief ExecutiveOfficer and Chief Financial Officer as appropriate, to allow timely decisionsregarding required disclosure. In designing and evaluating the disclosurecontrols and procedures, management recognizes that any control and procedure,no matter how well designed and operated, can only provide reasonable assuranceof achieving the desired control objectives, and in reaching a reasonable levelof assurance management necessarily was required to apply its judgment inevaluating the cost-benefit relationship of possible disclosure controls andprocedures.

 

Our management,with the participation of our Chief Executive Officer and our Chief FinancialOfficer, conducted an evaluation of the effectiveness of our disclosurecontrols and procedures pursuant to Rule 13a-15 under the Exchange Act asof June 30, 2008. Based on that evaluation, management, including ourChief Executive Officer and our Chief Financial Officer, concluded that, as of June 30,2008, our disclosure controls and procedures were not effective in reaching areasonable level of assurance that: (a) all material information relatingto the Company, required to be disclosed in this report, was made known tomanagement in a timely manner; and (b) information was recorded,processed, summarized and reported within the time periods specified in the SEC’srules and regulations. As previously reported, in August 2008, webecame aware that our internal control over financial reporting was ineffectiveto prevent the underpayment of customs duties on certain of our imports offashion apparel purchased from foreign suppliers, which revealed a significantdeficiency in our internal control over financial reporting. Accordingly, webelieve that our disclosure controls and procedures were not effective as of June 30,2008, because they failed to accumulate and communicate this significantdeficiency to management, to allow timely disclosure of such information.

 

**(b)****    Management’s Annual Report onInternal Control over Financial Reporting.**Our management, including ourChief Executive Officer and our Chief Financial Officer, is responsible forestablishing and maintaining adequate internal control over financial reportingas defined in Rules 13a-15(f) and 15d-15(f) under the ExchangeAct. Internal control over financial reporting refers to the process designedby, or under the supervision of, our Chief Executive Officer and ChiefFinancial Officer, and effected by our Board of Directors, management and otherpersonnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles, andincludes those policies and procedures that:

 

(i)    pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect thetransactions and dispositions of our assets;

 

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(ii)   provide reasonable assurancethat transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles, andthat our receipts and expenditures are being made only in accordance with theauthorization of our management and directors; and,

 

(iii)  provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use or dispositionof our assets that could have a material effect on the financial statements.

 

Our management,including our Chief Executive Officer and our Chief Financial Officer, does notexpect that our internal control over financial reporting will, in allinstances, prevent all errors and all fraud. A control system, no matter howwell conceived or operated, can only provide reasonable, not absolute,assurance that the objectives of the control system are met. While our controlsystems provide a reasonable assurance level, the design of our control systemsreflects the fact that there are resource constraints, and the benefits of suchcontrols were considered relative to their costs. Because of the inherentlimitations in all control systems, no evaluation of controls can provideabsolute assurance that all control issues and instances of fraud, if any,within the financial reports of Sport-Haley, Inc. have been detected.These inherent limitations include the realities that judgments indecision-making can be faulty, and that breakdowns can occur because of simpleerrors or mistakes. Additionally, a control can be circumvented by theindividual act of some person, by collusion of two or more persons, or bymanagement’s override of a specific control. The design of any system ofcontrols is also based in part on certain assumptions about the likelihood offuture events, and there can be no assurance that any design will succeed inachieving its stated goals under all potential future conditions. Because ofthe inherent limitations in a cost-effective control system, misstatements dueto error or fraud may occur and not be detected.

 

During fiscal2008, under the supervision of our Chief Executive Officer and our ChiefFinancial Officer, we completed the design, documentation and implementation ofour internal control over financial reporting. We believe that we have designedour controls to provide reasonable assurance regarding the reliability of ourfinancial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. Aspreviously reported, in August 2008, we became aware that our controlswere ineffective to prevent the underpayment of customs duties on certain ofour imports of fashion apparel purchased from foreign suppliers, which revealeda significant deficiency in our internal control over financial reporting. Asignificant deficiency in internal controls means a deficiency, or acombination of deficiencies, in internal control over financial reporting thatis less severe than a material weakness, yet important enough to meritattention by those responsible for oversight of the registrant’s financial reporting.In March 2009, we completed an assessment of the effectiveness of ourinternal control over financial reporting by utilizing the framework set forthin the report entitled *“Internal Control —Integrated Framework”* published by the Committee of SponsoringOrganizations of the Treadway Commission, known as “COSO.” Our March 2009assessment revealed no material weaknesses and no significant deficiencies,other than the underpayment of customs duties, nor any deficiencies which, whencombined with other deficiencies, could be considered to be a significantdeficiency in our internal control over financial reporting. However, due tothe significant deficiency discovered in August 2008, management concludedthat the Company’s internal control over financial reporting was not effectiveas of June 30, 2008.

 

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**(c)****   Attestation Report of theRegistered Public Accounting Firm.** This Amendment on Form 10-K/A doesnot include an attestation report of our independent registered publicaccounting firm regarding internal control over financial reporting. Neitherthis Amendment nor our Original Form 10-K was subject to attestation byour independent registered public accounting firm pursuant to temporary rules ofthe Securities and Exchange Commission that permit us to provide onlymanagement’s report on internal control over financial reporting. Ourindependent registered public accounting firm issued an unqualified opinion onour financial statements for the year ended June 30, 2008, which wasincluded in our Original Form 10-K.

 

**(d)****   Changes in Internal ControlOver Financial Reporting.**Except as noted above, there have been nosignificant changes in our internal control over financial reporting as definedin Rules 13a-15(f) or 15d-15(f) under the Exchange Act duringthe three months ended June 30, 2008, that materially affected, or arereasonably likely to materially affect, our internal control over financialreporting.

 

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**PART IV**

 

**ITEM 15.****      EXHIBITS AND FINANCIALSTATEMENT SCHEDULES**

 

**(a)****   Exhibits, Financial Statementsand Financial Statement Schedules**

 

The followingdocuments are filed herewith or have been included as exhibits to previousfilings with the Securities and Exchange Commission and are incorporated hereinby this reference:

 

**(3)****   Exhibits**

 
| **Exhibit No.** | ** ** | **Document**                                                                                |
|----------------------|------------|---------------------------------------------------------------------------------------------|
|                 |       |                                                                                        |
| *** 31.1             |       | Certification of  Donald W. Jewell pursuant to Exchange Act Rule 13a-14(a)/15d-14(a).  |
|                 |       |                                                                                        |
| *** 31.2             |       | Certification of  Patrick W. Hurley pursuant to Exchange Act Rule 13a-14(a)/15d-14(a). |

 

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***         Filed herewith.

 

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**SIGNATURES**

 

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.

 

 
|                 |   | SPORT-HALEY,  INC.                          |
|----------------------|--------|---------------------------------------------|
|                 |   |                                        |
|                 |   |                                        |
| April 13,  2009 | By:    | /s/PATRICK W.  HURLEY                       |
|                 |   | Patrick W.  Hurley, Chief Financial Officer |

 

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.

 

 
| **Signature**            | ** ** | **Title**                                         | ** ** | **Date**             |
|--------------------------|------------|---------------------------------------------------|------------|----------------------|
|                     |       |                                              |       |                 |
| /s/ DONALD W. JEWELL     |       | Chief Executive  Officer, President and Director  |       | April 13,  2009 |
| Donald W. Jewell         |       |                                              |       |                 |
|                     |       |                                              |       |                 |
|                     |       |                                              |       |                 |
| /s/ PATRICK W. HURLEY    |       | Chief Financial  Officer, Secretary and Treasurer |       | April 13,  2009 |
| Patrick W. Hurley        |       |                                              |       |                 |
|                     |       |                                              |       |                 |
|                     |       |                                              |       |                 |
| /s/ RONALD J. NORICK     |       | Director and  Chairman of the Board               |       | April 13,  2009 |
| Ronald J. Norick         |       |                                              |       |                 |
|                     |       |                                              |       |                 |
|                     |       |                                              |       |                 |
| /s/ JAMES R. TENBROOK    |       | Director and  Audit Committee Chairman            |       | April 13,  2009 |
| James R. TenBrook        |       |                                              |       |                 |
|                     |       |                                              |       |                 |
|                     |       |                                              |       |                 |
| /s/ MARK J. STEVENSON    |       | Director and  Compensation Committee Chairman     |       | April 13,  2009 |
| Mark J. Stevenson        |       |                                              |       |                 |
|                     |       |                                              |       |                 |
|                     |       |                                              |       |                 |
| /s/ WILLIAM O. JOHNSTONE |       | Director                                          |       | April 13,  2009 |
| William O. Johnstone     |       |                                              |       |                 |

 

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