2016 Annual Report page 82The following statement in page 82 of the 2016 Annual Report may be what triggered institutional flight from KDX [my red highlights].
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our financial statements for the year ended December 31, 2016 management identified a material weakness in our internal control over financial reporting relating to the calculation and presentation of our deferred tax assets and liabilities arising from the transition of the Company’s financial statements from International Financial Reporting Standards to US generally accepted accounting principles.
We did not maintain effective controls over the calculation and presentation of our deferred tax assets and liabilities arising from the transition of the Company’s financial statements from International Financial Reporting Standards to US generally accepted accounting principles. The deferred tax assets and liabilities and associated income tax expense were properly stated in this Annual Report on Form 10-K for the year ended December 31, 2016. Previously filed financial statements were not impacted. The Company is reviewing its staffing relating to complex accounting issues. The Company is considering engaging additional internal or external personnel with technical accounting expertise, as needed, to ensure that accounting personnel with adequate experience, skills and knowledge relating to complex transactions are directly involved in the review and accounting evaluation of our complex transactions.