The short arguments exposed

[admin]

You will see people posting stuff on message boards or even the comment section of our Seeking Alpha articles, trying to scare you out of your shares. So far, we haven't seen much that should give investors things to worry about.

For instance, they have argued that the auditor has, in the latest 10-K (the 2018 year-end report), expressed that the company has shortcomings in its control systems. Here is why that is less worrying than might seem at first sight:

1. This is a small, fast-growing company absorbing two acquisitions, some organizational shortcomings for such companies are not all that uncommon.
   
2. What the critics/(shorters?) conveniently left out was that the audit did specifically stated that these shortcomings haven't affected the financial figures. That is, the auditors are vouching for these, including those backlog figures..
   
3. What the critics conveniently left out is that the company reported extensive measures to shore up their control systems in the same 10-K.
   

Here is what the auditors said about the finances:

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America

And here is what management said about improving the control systems

Remediation
Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented and operating effectively. The remediation actions to the Company’s internal controls over financial reporting include a thorough review and documentation of all processes involved in our financial reporting to ensure that there is segregation of duties, access security and documented review processes in place that happen at appropriate intervals throughout the year that covers all elements of the Company’s financial reporting. This includes, but is not limited to, testing samples and documenting that testing has occurred with the results of the findings being reported to senior management and that they occur at appropriate intervals and continuously making improvements to our processes as necessary.

To addres ineffective design, implementation and monitoring of information technology general controls pertaining to the Company’s change management process, the Company has
(i) removed all live access to all developers, internal and external, from being able to make coding changes directly in our reporting system; 
(ii) will continue to monitor and document all changes made in our reporting system and add additional layers of documented review of these changes; 
(iii) will institute sample testing of changes made in our reporting system to ensure the documented policies are being followed and report the results of these tests to senior management in regular appropriate intervals; and 
(iv) enhance our quarterly reporting on the remediation measures to the Audit Committee of the Board of Directors. We believe that these actions will remediate the material weakness.

The weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of this material weakness will be completed prior to the end of fiscal 2019.