8-K
Creditriskmonitor Com Inc (CRMZ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2020
CreditRiskMonitor.com, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 1-8601 | 36-2972588 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
704 Executive Boulevard
Valley Cottage, NY 10989
(Address of principal executive offices, including zip code)
(845) 230-3000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $.01 | CRMZ | OTC Markets OTCQX U.S. |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| 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. ☐
| Item 2.02 | Results of Operation and Financial Condition |
|---|
On November 12, 2020, CreditRiskMonitor.com, Inc. issued a press release relating to, among other things, its financial results for the three and nine months ended September 30, 2020. This press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
|---|
On October 29, 2020, the Board of Directors of the Company promoted Michael I. Flum to the position of President. Mr. Flum joined the Company in June 2018 as Vice President of Operations & Alternative Data. He was elected Senior Vice President and Chief Operating Officer on October 24, 2019 and in that position was responsible for operational strategy and implementation, leveraging technology to improve the efficiency of human capital and work processes. Prior to joining CreditRiskMonitor, Mr. Flum served as Vice President of Operations at Gullett & Associates, Inc., a Houston-based midstream oil & gas survey and drafting services firm from 2016 to 2017. Mr. Flum held various engineering and project management roles at Enterprise Products Partners, a Houston-based oil & gas pipeline owner/operator from 2009 to 2016. Mr. Flum holds a BS in Mechanical Engineering and a BA in Religious Studies from Rice University as well as an MBA from Columbia Business School.
| Item 8.01 | Other Events. |
|---|
On October 29, 2020, Due to the economic crisis, the Board of Directors of the Company determined that the appropriate thing to do would be to postpone any declaration or payment of the Company’s annual dividend until the Company sees an increased stability in marketplace. The Board’s determination was based on review of world-record corporate debt-to-GDP levels, increased default rates, and the challenging economic environment, including the continued uncertainty regarding financial stability of the Company’s subscribers and a mounting second wave of COVID-19 infections. The Company is dedicated to ensuring the safety and safeguarding the jobs of our employees. The company retained its payroll levels and employees throughout the year. We will continue to invest in strengthening our staff, service model, and product to meet our client’s credit risk needs. Therefore, preservation of liquidity until there is evincible data to suggest control of the pandemic is paramount. The Board expects to review this determination periodically throughout 2021.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release dated November 12, 2020 |
SIGNATURE
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 hereunto duly authorized.
| CREDITRISKMONITOR.COM, INC. | ||
|---|---|---|
| Date: November 12, 2020 | By: /s/ Steven Gargano | |
| Steven Gargano | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Exhibit 99.1
NEWS RELEASE
CONTACT:
CreditRiskMonitor.com, Inc.
Jerry Flum, CEO
(845) 230-3030
FOR IMMEDIATE RELEASE
CreditRiskMonitor Announces Third Quarter Results
VALLEY COTTAGE, NY—November 12, 2020—CreditRiskMonitor (OTCQX: CRMZ) Jerry Flum, CEO, said, “Our net income is not growing at the same pace as sales since the Company retained, and even increased, its payroll levels and employees throughout the year. We also continue to invest in strengthening our service and technical staff in an effort to provide exceptional service to our clients that meets their credit risk needs in these uncertain times. Our team is our backbone, and our clients rely on them on a daily basis.”
On October 29, 2020, due to the economic crisis, our Board of Directors determined to postpone any declaration or payment of the Company’s annual dividend until the Company sees increased financial stability in the marketplace, part of our core competency as a business. The Board’s determination was based on review of world-record corporate debt-to-GDP levels, increased default and bankruptcy rates, and the challenging economic environment, including the possible reduced financial stability of some of the Company’s subscribers due to continued uncertainty and a mounting second wave of COVID-19 infections. The Company is dedicated to ensuring the safety and safeguarding the jobs of our employees. The company retained its payroll levels and employees throughout the year. We will continue to invest in strengthening our staff, service model, and product to meet our client’s credit risk needs. Therefore, preservation of liquidity until there is material evidence of control over the pandemic is paramount. The Board expects to review this determination periodically throughout 2021.
In addition, the Board of Directors promoted Michael I. Flum to the position of President while retaining his role as Chief Operating Officer. Mr. Flum joined the Company in June 2018 as Vice President of Operations & Alternative Data. He was elected Senior Vice President and Chief Operating Officer on October 24, 2019 and has been responsible for operational strategy and implementation, leveraging technology to improve the efficiency of human capital and work processes. Prior to joining CreditRiskMonitor, Mr. Flum served as Vice President of Operations at Gullett & Associates, Inc., a Houston-based midstream oil & gas survey and drafting services firm from 2016 to 2017. Mr. Flum held various engineering and project management roles at Enterprise Products Partners, a Houston-based oil & gas pipeline owner/operator from 2009 to 2016. Mr. Flum holds a BS in Mechanical Engineering and a BA in Religious Studies from Rice University as well as an MBA from Columbia Business School.
A full copy of the financial statements can be found at https://crmz.ir.edgar-online.com/
CREDITRISKMONITOR.COM, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(Unaudited)
| 2020 | 2019 | |||||
|---|---|---|---|---|---|---|
| Operating revenues | $ | 4,037,456 | $ | 3,673,241 | ||
| Operating expenses: | ||||||
| Data and product costs | 1,514,659 | 1,421,290 | ||||
| Selling, general and administrative expenses | 2,110,280 | 1,962,150 | ||||
| Depreciation and amortization | 52,931 | 52,667 | ||||
| Total operating expenses | 3,677,870 | 3,436,107 | ||||
| Income from operations | 359,586 | 237,134 | ||||
| Other income | 916 | 40,223 | ||||
| Income before income taxes | 360,502 | 277,357 | ||||
| Provision for income taxes | (79,420 | ) | (73,767 | ) | ||
| Net income | $ | 281,082 | $ | 203,590 | ||
| Net income per share – Basic and diluted | $ | 0.03 | $ | 0.02 | ||
| Weighted average number of common shares outstanding – | ||||||
| Basic | 10,722,401 | 10,722,401 | ||||
| Diluted | 10,746,834 | 10,722,401 |
CREDITRISKMONITOR.COM, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(Unaudited)
| 2020 | 2019 | |||||
|---|---|---|---|---|---|---|
| Operating revenues | $ | 11,598,210 | $ | 10,736,581 | ||
| Operating expenses: | ||||||
| Data and product costs | 4,556,456 | 4,316,780 | ||||
| Selling, general and administrative expenses | 6,919,804 | 6,277,294 | ||||
| Depreciation and amortization | 160,736 | 153,701 | ||||
| Total operating expenses | 11,636,996 | 10,747,775 | ||||
| Loss from operations | (38,786 | ) | (11,194 | ) | ||
| Other income | 27,017 | 124,322 | ||||
| Income (loss) before income taxes | (11,769 | ) | 113,128 | |||
| Benefit from (provision for) income taxes | 123,424 | (57,536 | ) | |||
| Net Income | $ | 111,655 | $ | 55,592 | ||
| Net income per share – Basic and diluted | $ | 0.01 | $ | 0.01 | ||
| Weighted average number of common shares outstanding – | ||||||
| Basic | 10,722,401 | 10,722,401 | ||||
| Diluted | 10,730,545 | 10,725,252 |
CREDITRISKMONITOR.COM, INC.
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 2020 AND DECEMBER 31, 2019
| December 31,<br><br> <br>2019 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 10,451,155 | $ | 8,275,836 | ||
| Accounts receivable, net of allowance | 1,945,280 | 2,287,921 | |||
| Other current assets | 596,558 | 549,821 | |||
| Total current assets | 12,992,993 | 11,113,578 | |||
| Property and equipment, net | 405,131 | 477,973 | |||
| Operating lease right-to-use asset | 2,245,896 | 2,380,974 | |||
| Goodwill | 1,954,460 | 1,954,460 | |||
| Other assets | 108,437 | 35,723 | |||
| Total assets | 17,706,917 | $ | 15,962,708 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Unexpired subscription revenue | 9,189,823 | $ | 8,651,843 | ||
| Accounts payable | 47,541 | 137,500 | |||
| Current portion of operating lease liability | 158,117 | 147,229 | |||
| Current portion of bank loan | 1,102,833 | -- | |||
| Accrued expenses | 1,135,506 | 1,344,550 | |||
| Total current liabilities | 11,633,820 | 10,281,122 | |||
| Deferred taxes on income, net | 397,528 | 521,765 | |||
| Unexpired subscription revenue, less current portion | 188,906 | 166,169 | |||
| Bank loan, less current portion | 458,667 | -- | |||
| Operating lease liability, less current portion | 2,179,856 | 2,299,433 | |||
| Total liabilities | 14,858,777 | 13,268,489 | |||
| Stockholders’ equity: | |||||
| Preferred stock, .01 par value; authorized 5,000,000 shares; none issued | -- | -- | |||
| Common stock, .01 par value; authorized 32,500,000 shares; issued and outstanding 10,722,401 shares | 107,224 | 107,224 | |||
| Additional paid-in capital | 29,747,939 | 29,705,673 | |||
| Accumulated deficit | (27,007,023 | ) | (27,118,678 | ) | |
| Total stockholders’ equity | 2,848,140 | 2,694,219 | |||
| Total liabilities and stockholders’ equity | 17,706,917 | $ | 15,962,708 |
All values are in US Dollars.
Overview
CreditRiskMonitor (http://www.crmz.com) is a web-based publisher of financial information that helps corporate credit and procurement professionals stay ahead of business financial risk quickly, accurately and cost effectively. The service offers comprehensive commercial credit reports and financial risk analysis covering public companies worldwide. Unlike other commercial credit bureaus like Dun & Bradstreet, CreditRiskMonitor’s primary expertise and focus is on financial analysis of public debt and equity companies.
The Company also collects a significant amount of trade receivable data on both public and a select group of private companies every month, to help subscribers determine payment performance.
Over 35% of the Fortune 1000 plus over 1,000 other large companies worldwide depend on CreditRiskMonitor’s timely news alerts and reports featuring detailed analyses of financial statements, ratio analysis and trend reports, peer analyses, bond agency ratings, crowdsourcing of risk professionals as well as the Company’s proprietary FRISK® and PAYCE® scores.
Safe Harbor Statement
Certain statements in this press release, including statements prefaced by the words “anticipates”, “estimates”, “believes”, “expects” or words of similar meaning, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, expectations or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including, among others, risks associated with the COVID-19 pandemic and those risks, uncertainties and factors referenced from time to time as “risk factors” or otherwise in the Company’s Registration Statements or Securities and Exchange Commission Reports. We disclaim any intention or obligation to revise any forward-looking statements, whether as a result of new information, a future event, or otherwise.