UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to

Commission File Number: 1-8601

CreditRiskMonitor.com, Inc.
(Exact name of registrant as specified in its charter)

Nevada
  
36-2972588
(State or other jurisdiction of incorporation or organization
  
 (I.R.S. Employer Identification No.)

704 Executive Boulevard, Suite A
Valley Cottage, New York  10989
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (845) 230-3000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
N/A
N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐
Accelerated filer
☐
Non-accelerated filer   ☑
Smaller reporting company
☑
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).   Yes ☐    No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Common stock $.01 par value – 10,722,401 shares outstanding as of August 10, 2022. The aggregate market value of the registrant’s common stock held by non-affiliates as of June 30, 2021 and 2022 was $11,869,949 and $10,037,090 respectively.

CREDITRISKMONITOR.COM, INC.
INDEX

 
Page
PART I. FINANCIAL INFORMATION
  
       
 
Item 1.
Financial Statements
  
       
   
2
       
   
3
       
    Condensed Statements of Operations for the Six Months Ended June 30, 2022 and 2021 (Unaudited) 4
       
   
5
       
    Condensed Statements of Stockholders’ Equity for the Six Months Ended June 30, 2022 and 2021 (Unaudited) 6
       
   
7
       
   
8
       
 
Item 2.
10
       
 
Item 4.
14
       
PART II. OTHER INFORMATION
  
       
 
Item 6.
15
       
16

1
PART I. FINANCIAL INFORMATION

Item 1.
Financial Statements

CREDITRISKMONITOR.COM, INC.
CONDENSED BALANCE SHEETS
JUNE 30, 2022 AND DECEMBER 31, 2021

   
June 30,
2022
    
December 31,
2021
  
   
(Unaudited)
    
(Note 1)
  
             
ASSETS
            
Current assets:
            
Cash and cash equivalents
  
$
12,627,763
    
$
12,381,521
  
Accounts receivable, net of allowance of $30,000
    
3,447,149
      
2,803,236
  
Other current assets
    
810,289
      
581,149
  
                 
Total current assets
    
16,885,201
      
15,765,906
  
                 
Property and equipment, net
    
572,615
      
606,193
  
Operating lease right-to-use asset
    
1,915,302
      
2,012,155
  
Goodwill
    
1,954,460
      
1,954,460
  
Other assets
    
49,136
      
86,714
  
                 
Total assets
  
$
21,376,714
    
$
20,425,428
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Unexpired subscription revenue
  
$
10,398,984
    
$
9,520,226
  
Accounts payable
    
225,447
      
358,307
  
Current portion of operating lease liability
    
185,549
      
177,485
  
Accrued expenses
    
1,461,163
      
1,745,290
  
                 
Total current liabilities
    
12,271,143
      
11,801,308
  
                 
Deferred taxes on income, net
    
484,296
      
407,805
  
Unexpired subscription revenue, less current portion
    
227,467
      
127,124
  
Operating lease liability, less current portion
    
1,865,964
      
1,960,127
  
                 
Total liabilities
    
14,848,870
      
14,296,364
  
                 
Stockholders’ equity:
                
Preferred stock, $0.01 par value; authorized 5,000,000 shares; none issued
    
-
      
-
  
Common stock, $0.01 par value; authorized 32,500,000 shares; issued and outstanding 10,722,401 shares
    
107,224
      
107,224
  
Additional paid-in capital
    
29,859,233
      
29,824,242
  
Accumulated deficit
    
(23,438,613
)
    
(23,802,402
)
                 
Total stockholders’ equity
    
6,527,844
      
6,129,064
  
                 
Total liabilities and stockholders’ equity
  
$
21,376,714
    
$
20,425,428
  

See accompanying notes to condensed financial statements.

2
CREDITRISKMONITOR.COM, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021
(Unaudited)

   
2022
    
2021
  
             
Operating revenues
  
$
4,450,017
    
$
4,248,179
  
                 
Operating expenses:
                
Data and product costs
    
1,715,574
      
1,573,686
  
Selling, general and administrative expenses
    
2,342,699
      
2,190,382
  
Depreciation and amortization
    
107,000
      
66,503
  
                 
Total operating expenses
    
4,165,273
      
3,830,571
  
                 
Income from operations
    
284,744
      
417,608
  
Other income
    
11,090
      
246
  
                 
Income before income taxes
    
295,834
      
417,854
  
Provision for income taxes
    
(83,166
)
    
(95,146
)
                 
Net income
  
$
212,668
    
$
322,708
  
                 
Net income per share – Basic and diluted
  
$
0.02
    
$
0.03
  
                 
Weighted average number of common shares outstanding –
                
Basic
    
10,722,401
      
10,722,401
  
Diluted
    
10,775,373
      
10,792,744
  

See accompanying notes to condensed financial statements.

3
Index
CREDITRISKMONITOR.COM, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(Unaudited)

   
2022
    
2021
  
             
Operating revenues
  
$
8,788,220
    
$
8,381,081
  
                 
Operating expenses:
                
Data and product costs
    
3,473,486
      
3,201,472
  
Selling, general and administrative expenses
    
4,633,801
      
4,391,174
  
Depreciation and amortization
    
201,209
      
131,016
  
                 
Total operating expenses
    
8,308,496
      
7,723,662
  
                 
Income from operations
    
479,724
      
657,419
Other income
    
11,787
      
3,494
  
                 
Income before income taxes
    
491,511
      
660,913
Provision for income taxes
    
(127,722
)
    
(150,491)
  
                 
Net income
  
$
363,789
    
$
510,422
  
                 
Net income per share – Basic and diluted
   $ 0.03    
$
0.05
  
                 
Weighted average number of common shares outstanding –
                
Basic
    
10,722,401
      
10,722,401
  
Diluted
    
10,761,851
      
10,779,726
  

See accompanying notes to condensed financial statements.

4
Index
CREDITRISKMONITOR.COM, INC.
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021
(Unaudited)

          Additional          
Total
  
    Common Stock
   
Paid-in
Capital
    
Accumulated
Deficit
    
Stockholders’ Equity
  
 
Shares
    
Amount
  
Balance April 1, 2021
    
10,722,401
    
$
107,224
    
$
29,769,955
    
$
(26,978,392
)
  
$
2,898,787
  
                                         
Net income
    
-
      
-
      
-
      
322,708
      
322,708
  
Stock-based compensation
    
-
      
-
      
16,968
      
-
      
16,968
  
                                         
Balance June 30, 2021
    
10,722,401
    
$
107,224
    
$
29,786,923
    
$
(26,655,684
)
  
$
3,238,463
  
                                         
Balance April 1, 2022
    
10,722,401
    
$
107,224
    
$
29,843,574
    
$
(23,651,281
)
  
$
6,299,517
  
                                         
Net income
    
-
      
-
      
-
      
212,668
      
212,668
  
Stock-based compensation
    
-
      
-
      
15,659
      
-
      
15,659
  
                                         
Balance June 30, 2022
    
10,722,401
    
$
107,224
    
$
29,859,233
    
$
(23,438,613
)
  
$
6,527,844
  

See accompanying notes to condensed financial statements.

5
Index
CREDITRISKMONITOR.COM, INC.
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(Unaudited)

          Additional           Total  
   
Common Stock
    
Paid-in
Capital
    
Accumulated
Deficit
    
Stockholders’
Equity
  
 
Shares
    
Amount
  
Balance January 1, 2021
    
10,722,401
    
$
107,224
    
$
29,760,533
    
$
(27,166,106
)
  
$
2,701,651
  
                                         
Net income
    
-
      
-
      
-
      
510,422
   
510,422
Stock-based compensation
    
-
      
-
      
26,390
      
-
      
26,390
  
                                         
Balance June 30, 2021
    
10,722,401
    
$
107,224
    
$
29,786,923
    
$
(26,655,684
)
  
$
3,238,463
  
                                         
Balance January 1, 2022
    
10,722,401
    
$
107,224
    
$
29,824,242
    
$
(23,802,402
)
  
$
6,129,064
  
                                         
Net income
    
-
      
-
      
-
      
363,789
      
363,789
  
Stock-based compensation
    
-
      
-
      
34,991
      
-
      
34,991
  
                                         
Balance June 30, 2022
    
10,722,401
    
$
107,224
    
$
29,859,233
    
$
(23,438,613
)
  
$
6,527,844
  

See accompanying notes to condensed financial statements.

6
Index
CREDITRISKMONITOR.COM, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(Unaudited)

   
2022
    
2021
  
             
Cash flows from operating activities:
            
Net income
  
$
363,789
    
$
510,422
  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Deferred income taxes
    
76,491
      
(535
)
Depreciation and amortization
    
201,209
      
131,016
  
Operating lease right-to-use asset, net
    
10,755
      
14,652
  
Stock-based compensation
    
34,991
      
26,390
  
Changes in operating assets and liabilities:
                
Accounts receivable
    
(643,913
)
    
(387,939
)
Other current assets
    
(229,139
)
    
(215,261
)
Other assets
    
37,576
      
43,282
  
Unexpired subscription revenue
    
979,101
      
287,115
  
Accounts payable
    
(132,860
)
    
51,826
  
Accrued expenses
    
(284,127
)
    
(135,409
)
                 
Net cash provided by operating activities
    
413,873
      
325,559
  
                 
Cash flows from investing activities:
                
Sale of available-for-sale securities – municipal bonds
    
-
      
458,237
  
Purchase of property and equipment
    
(167,631
)
    
(182,734
)
                 
Net cash (used in) provided by investing activities
    
(167,631
)
    
275,503
  
                 
                 
Net increase in cash and cash equivalents
    
246,242
      
601,062
  
Cash and cash equivalents at beginning of period
    
12,381,521
      
10,302,732
  
                 
Cash and cash equivalents at end of period
  
$
12,627,763
    
$
10,903,794
  

See accompanying notes to condensed financial statements.

7
CREDITRISKMONITOR.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed financial statements of CreditRiskMonitor.com, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosure required by generally accepted accounting principles (“GAAP”) in the United States for complete financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited condensed financial statements reflect all material adjustments, including normal recurring accruals, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented, and have been prepared in a manner consistent with the audited financial statements for the fiscal year ended December 31, 2021.

The results of operations for the three and six months ended June 30, 2022 and 2021 are not necessarily indicative of the results for an entire fiscal year.

The December 31, 2021 balance sheet has been derived from the audited financial statements at that date, but does not include all disclosures required by GAAP. These condensed financial statements should be read in conjunction with the audited financial statements and the footnotes for the fiscal year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K.


(2) Recently Issued Accounting Standards



The Financial Accounting Standards Board (“FASB”) and the SEC have issued certain accounting pronouncements that will become effective in subsequent periods; however, management does not believe that any of those pronouncements would have significantly affected the Company’s financial accounting measurements or disclosures had they been in effect during the interim periods for which financial statements are included in this quarterly report. Management also believes those pronouncements will not have a significant effect on the Company’s future financial position or results of operations.

(3) Revenue Recognition

The Company applies FASB Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers (“ASC 606”) to recognize revenue. ASC 606 requires an entity to apply the following five-step approach: (1) identify the contract(s) with a customer; (2) identify each performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation; and (5) recognize revenue when or as each performance obligation is satisfied. The Company’s primary source of revenue is subscription income which is recognized ratably over the subscription term.

(4) Stock-Based Compensation

The Company applies ASC 718, Compensation-Stock Compensation (“ASC 718”) to account for stock-based compensation.

8
Index
The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations in accordance with ASC 718 for the three and six months ended June 30:
 
    
3 Months Ended
June 30,
    
6 Months Ended
June 30,
  
   
2022
    
2021
    
2022
    
2021
  
                         
Data and product costs
   $
3,754
     $
5,393
     $
11,041
     $
9,245
  
Selling, general and administrative expenses
    
11,905
      
11,575
      
23,950
      
17,145
  
                                 
    $
15,659
     $
16,968
     $
34,991
     $
26,390
  

(5) Fair Value Measurements

The Company’s cash and cash equivalents are stated at fair value. The carrying value of accounts receivable, other current assets, and accounts payable approximates fair market value because of the short maturity of these financial instruments.

The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The tables below set forth the Company’s cash and cash equivalents as of June 30, 2022 and December 31, 2021, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

   
June 30, 2022
  
   
Level 1
    
Level 2
    
Level 3
    
Total
  
                         
Cash and cash equivalents
  
$
12,627,763
    
$
-
    
$
-
    
$
12,627,763
  

   
December 31, 2021
 
   
Level 1
    
Level 2
    
Level 3
    
Total
  
                         
Cash and cash equivalents
  
$
12,381,521
    
$
-
    
$
-
    
$
12,381,521
  

There were cash proceeds of $458,237 from the sale of available-for-sale securities for the period ended June 30, 2021.

9

(6) Net Income per Share

Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares outstanding and the dilutive effect of outstanding stock options.

   
3 Months Ended
June 30,
    
6 Months Ended
June 30,
  
   
2022
    
2021
    
2022
    
2021
  
                         
Weighted average number of common shares outstanding – basic
    
10,722,401
      
10,722,401
      
10,722,401
      
10,722,401
  
Potential shares exercisable under stock option plans
    
277,300
      
278,100
      
276,391
      
278,100
  
LESS: Shares which could be repurchased under treasury stock method     (224,328 )     (207,757 )     (236,941 )     (220,775 )
                                 
Weighted average number of common shares outstanding – diluted
    
10,775,373
      
10,792,744
      
10,761,851
      
10,779,726
  

For the three and six months ended June 30, 2022, the computation of diluted net income per share excludes the effects of the assumed exercise of 351,600 and 354,200 options, respectively, since their inclusion would be anti-dilutive as their exercise prices were above market value.

For the three and six months ended June 30, 2021, the computation of diluted net income per share excludes the effects of the assumed exercise of 290,650 and 290,650 options, respectively, since their inclusion would be anti-dilutive as their exercise prices were above market value.

(7) Commitments and Contingencies

From time to time, the Company is involved in various legal proceedings arising in the ordinary course of business.  The Company records a liability when it believes that a loss will be incurred and the amount of loss or range of loss can be reasonably estimated.  Based on the currently available information, the Company does not believe that there are claims or legal proceedings that would have a material adverse effect on the business, or the consolidated financial statements of the Company.

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Environment

The continuing uncertainty in the worldwide financial system has negatively impacted general business conditions. It is possible that a weakened economy could adversely affect our clients’ need for credit information, or even their solvency, but we cannot predict whether or to what extent this will occur.

Our strategic priorities and plans for 2022 are to continue to build on the improvement initiatives underway to achieve sustainable, profitable growth. The Company’s top priority is the sale of our newly launched procurement risk platform, SupplyChainMonitor™, which was officially launched during the second quarter of 2022.

Due to COVID-19 variants, the Company has elected to voluntarily close in-office personnel functions for the safety of our employees. Only a limited number of IT and other personnel are periodically visiting our office to ensure the integrity of our computer network, retrieve physical files, and any other function that cannot be done remotely. This has allowed our employee base to work remotely and the Company’s operations to continue normally. Nevertheless, the long-term impact the pandemic will have on the Company’s subscriber base is unknown at this time. The Company may face loss of contracts and/or customers, customer credit risk, and general economic calamities. Accordingly, these global market conditions will affect the level and timing of resources deployed in pursuit of these initiatives in 2022.

10
Financial Condition, Liquidity and Capital Resources

The following table presents selected financial information and statistics as of June 30, 2022 and December 31, 2021 (dollars in thousands):


  
June 30,
2022
    
December 31,
2021
  
Cash and cash equivalents
  
$
12,628
    
$
12,382
  
Accounts receivable, net
  
$
3,447
    
$
2,803
  
Working capital
  
$
4,614
    
$
3,964
  
Cash ratio
    
1.03
      
1.05
  
Quick ratio
    
1.31
      
1.29
  
Current ratio
    
1.38
      
1.34
  

As of June 30, 2022, the Company had $12.63 million in cash and cash equivalents, an increase of approximately $246 thousand from December 31, 2021. This increase was primarily the result of cash provided by operating activities of approximately $413 thousand and the purchase of equipment totaling approximately $167 thousand.

The main component of current liabilities at June 30, 2022 was unexpired subscription revenue of $10 million, which should not require significant future cash outlay, as this is annual reoccurring revenue, other than the cost of preparation and delivery of the applicable commercial credit reports, which cost much less than the unexpired subscription revenue shown. Unexpired subscription revenue is recognized as income over the subscription term, which approximates 12 months.

The Company has no bank lines of credit or other currently available credit sources.

The Company believes that its existing balances of cash and cash equivalents and cash generated from operations will be sufficient to satisfy its currently anticipated cash requirements through at least the next 12 months and the foreseeable future. Moreover, the Company has no long-term debt. However, the Company’s liquidity could be negatively affected if it were to make an acquisition or license products or technologies, which may necessitate the need to raise additional capital through future debt or equity financing. Additional financing may not be available at all or on terms favorable to the Company.

Off-Balance Sheet Arrangements

The Company is not a party to any off-balance sheet arrangements.

11
Results of Operations

   
3 Months Ended June 30,
  
 
2022

2021
 
Amount
    
% of Total
Operating
Revenues

Amount

% of Total
Operating
Revenues
Operating revenues
$
4,450,017
      
100
%
  
$
4,248,179


100
%
 


             





Operating expenses:


             





Data and product costs

1,715,574
      
39
%
    
1,573,686


37
%
Selling, general and administrative expenses

2,342,699
      
52
%
    
2,190,382


52
%
Depreciation and amortization

107,000
      
2
%
    
66,503


1
%
Total operating expenses

4,165,273
      
93
%
    
3,830,571


90
%
 


             





Income from operations

284,744
      
7
%
    
417,608


10
%
Other income, net

11,090
      
0
%
    
246


0
%
 


           






Income before income taxes

295,834
      
7
%
    
417,854


10
%
Provision for income taxes

(83,166
)
    
(2
%)
    
(95,146
)

(2
%)




             





Net income
$
212,668
      
5
%
  
$
322,708


8
%

Operating revenues increased approximately $202 thousand, or 5%, for the three months ended June 30, 2022 compared to the second quarter of fiscal 2021. This overall revenue growth resulted from price increases, an increase in subscription service revenue, attributable to increased sales to new and existing subscribers.

Data and product costs increased approximately $142 thousand, or 9%, for the second quarter of 2022 compared to the same period of fiscal 2021. This increase was due primarily to: (1) higher salary and related employee benefits due to pay raises to staff, and (2) higher costs of third-party content, due to inflationary increases instituted by some of the Company’s suppliers.

Selling, general and administrative expenses increased approximately $152 thousand, or 7%, for the second quarter of fiscal 2022 compared to the same period of fiscal 2021. This increase was primarily due to: (1) higher salary and related employee benefits due to pay raises to staff, and (2) higher commission expense due to increased sales.


  
6 Months Ended June 30,
  


2022

2021


Amount
    
% of Total
Operating
Revenues

Amount

% of Total
Operating
Revenues

   

               
Operating revenues
  
$
8,788,220
   
100
%
  
$
8,381,081
      
100
%

     
                       
Operating expenses:
                                
Data and product costs
    
3,473,486
   
40
%
    
3,201,472
      
38
%
Selling, general and administrative expenses
    
4,633,801
   
53
%
    
4,391,174
      
52
%
Depreciation and amortization
    
201,209
   
2
%
    
131,016
      
2
%
Total operating expenses
    
8,308,496
   
95
%
    
7,723,662
      
92
%

     
                       
Income from operations

479,724
   
5
%
    
657,419
      
8
%
Other income, net
    
11,787
   
0
%
    
3,494
      
0
%

     
                       
Income before income taxes
    
491,511
   
5
%
    
660,913
      
8
%
Provision for income taxes
    
(127,722
)
    
(1
%)
    
(150,491
)
    
(2
%)

     
                       
Net income
  
$
363,789

 
4
%
  
$
510,422


6
%

12
Operating revenues increased approximately $407 thousand, or 5%, for the six months ended June 30, 2022 compared to the first half of fiscal 2021. This overall revenue growth resulted from price increases, an increase in subscription service revenue, attributable to increased sales to new and existing subscribers.

Data and product costs increased approximately $272 thousand, or 8%, for the first half of 2022 compared to the same period of fiscal 2021. This increase was due primarily to: (1) higher salary and related employee benefits due to pay raises to staff, and (2) higher costs of third-party content, due to inflationary increases instituted by some of the Company’s suppliers.

Selling, general and administrative expenses increased approximately $243 thousand, or 6%, for the first half of fiscal 2022 compared to the same period of fiscal 2021. This increase was primarily due to: (1) higher salary and related employee benefits due to pay raises to staff, and (2) higher commission expense due to increased sales.

Future Operations

The Company over time intends to expand its operations by expanding the breadth and depth of its product and service offerings and introducing new and complementary products. Gross margins attributable to new business areas may be lower than those associated with the Company’s existing business activities.

As a result of the evolving nature of the markets in which it competes, the Company’s ability to accurately forecast its revenues, gross profits, and operating expenses as a percentage of net sales is limited. The Company’s current and future expense levels are based largely on its investment plans and estimates of future revenues. To a large extent these costs do not vary with revenue. Sales and operating results generally depend on the Company’s ability to attract and retain customers and the volume of and timing of customer subscriptions for the Company’s services, which are difficult to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues in relation to the Company’s planned expenditures would have an immediate adverse effect on the Company’s business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service, marketing or acquisition decisions that could have a material adverse effect on its business, prospects, financial condition and results of operations.

Achieving greater profitability depends on the Company’s ability to generate and sustain increased revenue levels. The Company believes that its success will depend in large part on its ability to (i) increase its brand awareness, (ii) provide its customers with outstanding value, thus encouraging customer renewals, and (iii) achieve sufficient sales volume to realize economies of scale. Accordingly, the Company intends to continue to increase the size of its sales force and service staff, and to invest in product development, operating infrastructure, marketing and promotion.

The Company expects to experience fluctuations in its future quarterly operating results due to a variety of factors, some of which are outside the Company’s control. Factors that may adversely affect the Company’s quarterly operating results include, among others, (i) new variants of COVID-19 and government related restrictions on our subscribers and their ongoing businesses and how those effects may impact our sales to them, (ii) the Company’s ability to retain existing subscribers, attract new subscribers at a steady rate and maintain customer satisfaction, (iii) the Company’s ability to maintain gross margins in its existing business and in future product lines and markets, (iv) the development of new services and products by the Company and its competitors, (v) price competition, (vi) the Company’s ability to obtain products and services from its vendors, including information suppliers, on commercially reasonable terms, (vii) the Company’s ability to upgrade and develop its systems and infrastructure, and adapt to technological change, (viii) the Company’s ability to attract and retain personnel in a timely and effective manner, (ix) the Company’s ability to manage effectively its development of new business segments and markets, (x) the Company’s ability to successfully manage the integration of operations and technology of acquisitions or other business combinations, (xi) technical difficulties, system downtime, cybersecurity breaches, or Internet brownouts, (xii) the amount and timing of operating costs and capital expenditures relating the Company’s business, operations and infrastructure, (xiii) governmental regulation and taxation policies, (xiv) disruptions in service by common carriers due to strikes or otherwise, (xv) risks of fire or other casualty, (xvi) litigation costs or other unanticipated expenses, (xvii) interest rate risks and inflationary pressures, and (xviii) general economic conditions and economic conditions specific to the Internet and online commerce.

13
Due to the foregoing factors, the Company believes that period-to-period comparisons of its revenues and operating results are not necessarily meaningful and should not be relied on as an indication of future performance.

Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain forward-looking statements, including statements regarding future prospects, industry trends, competitive conditions and litigation issues. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes”, “expects”, “anticipates”, “plans” or words of similar meaning are intended to identify forward-looking statements. This notice is intended to take advantage of the “safe harbor” provided by the Private Securities Litigation Reform Act of 1995 with respect to such forward-looking statements. These forward-looking statements involve a number of risks and uncertainties. Among others, factors that could cause actual results to differ materially from the Company’s beliefs or expectations are those listed under “Business Environment” and “Results of Operations” and other factors referenced herein or from time to time as “risk factors” or otherwise in the Company’s Registration Statements or Securities and Exchange Commission reports. The Company disclaims any intention or obligation to revise any forward-looking statement, whether as a result of new information, a future event or otherwise.

Item 4.
Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective to ensure that all material information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to them as appropriate to allow timely decisions regarding required disclosure and that all such information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations of the Effectiveness of Internal Control

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

14
PART II. OTHER INFORMATION

Item 6.
Exhibits


Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS
XBRL Instance Document

101.SCH
XBRL Taxonomy Extension Schema Document

101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF
XBRL Taxonomy Extension Definition Linkbase Document

101.LAB
XBRL Taxonomy Extension Label Linkbase Document

101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document

15
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
CREDITRISKMONITOR.COM, INC.
 
                (REGISTRANT)
     
Date: August 10, 2022
By: /s/
Steven Gargano


Steven Gargano


Senior Vice President & Chief Financial Officer


(Principal Accounting Officer)


16