10-Q

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 September 30, 2019

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 November 4, 2019.

CREDITRISKMONITOR.COM, INC.

INDEX

PART I. FINANCIAL INFORMATION Page

Item 1. Financial Statements

Balance Sheets – September 30, 2019 (Unaudited) and December 31, 2018	2
Statements of Operations for the Three Months Ended September 30, 2019 and 2018 (Unaudited)	3
Statements of Operations for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)	4
Statements of Stockholders’ Equity for the Three Months Ended September 30, 2019 and 2018 (Unaudited)	5
Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)	6
Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)	7
Condensed Notes to Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 4. Controls and Procedures	16

PART II. OTHER INFORMATION

Item 6. Exhibits 16

SIGNATURES 17

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CREDITRISKMONITOR.COM, INC.

BALANCE SHEETS

SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

	September 30, 2019			December 31, 2018
	(Unaudited)			(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	8,568,350		$	8,066,899
Accounts receivable, net of allowance		1,845,325			2,454,585
Other current assets		522,645			561,861
Total current assets		10,936,320			11,083,345
Property and equipment, net		514,917			543,762
Operating lease right-of-use asset		2,425,195			--
Goodwill		1,954,460			1,954,460
Other assets		48,654			35,613
Total assets	$	15,879,546		$	13,617,180
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Unexpired subscription revenue	$	8,358,081		$	8,560,316
Accounts payable		25,970			94,767
Current portion of operating lease liability		143,694			--
Accrued expenses		1,234,271			1,311,218
Total current liabilities		9,762,016			9,966,301
Deferred taxes on income, net		511,656			490,381
Unexpired subscription revenue, less current portion		213,955			178,129
Operating lease liability, less current portion		2,337,973			--
Other liabilities		--			24,537
Total liabilities		12,825,600			10,659,348
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		29,691,282			29,650,760
Accumulated deficit		(26,744,560	)		(26,800,152	)
Total stockholders’ equity		3,053,946			2,957,832
Total liabilities and stockholders’ equity	$	15,879,546		$	13,617,180

See accompanying condensed notes to financial statements.

2

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Unaudited)

	2019			2018
Operating revenues	$	3,673,241		$	3,481,359
Operating expenses:
Data and product costs		1,421,290			1,416,783
Selling, general and administrative expenses		1,962,150			2,060,322
Depreciation and amortization		52,667			49,583
Total operating expenses		3,436,107			3,526,688
Income (loss) from operations		237,134			(45,329	)
Other income, net		40,223			36,710
Income (loss) before income taxes		277,357			(8,619	)
Provision for income taxes		(73,767	)		(2,527	)
Net income (loss)	$	203,590		$	(11,146	)
Net income (loss) per share – Basic and diluted	$	0.02		$	(0.00	)
Weighted average number of common shares outstanding –
Basic and diluted		10,722,401			10,722,401

See accompanying condensed notes to financial statements.

3

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Unaudited)

	2019			2018
Operating revenues	$	10,736,581		$	10,331,106
Operating expenses:
Data and product costs		4,316,780			4,314,468
Selling, general and administrative expenses		6,277,294			6,398,936
Depreciation and amortization		153,701			138,670
Total operating expenses		10,747,775			10,852,074
Loss from operations		(11,194	)		(520,968	)
Other income, net		124,322			88,354
Income (loss) before income taxes		113,128			(432,614	)
Benefit (provision) for income taxes		(57,536	)		79,195
Net income (loss)	$	55,592		$	(353,419	)
Net income (loss) per share – Basic and diluted	$	0.01		$	(0.03	)
Weighted average number of common shares outstanding –
Basic		10,722,401			10,722,401
Diluted		10,725,252			10,722,401

See accompanying condensed notes to financial statements.

4

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Unaudited)

					Additional Paid-in		Accumulated			Total Stockholders’
	Common Stock
	Shares		Amount		Capital		Deficit			Equity
Balance July 1, 2018		10,722,401	$	107,224	$	29,610,771	$	(26,426,973	)	$	3,291,022
Net loss		--		--		--		(11,146	)		(11,146	)
Stock-based compensation		--		--		21,200		--			21,200
Balance September 30, 2018		10,722,401	$	107,224	$	29,631,971	$	(26,438,119	)	$	3,301,076
Balance July 1, 2019		10,722,401	$	107,224	$	29,678,817	$	(26,948,150	)	$	2,837,891
Net income		--		--		--		203,590			203,590
Stock-based compensation		--		--		12,465		--			12,465
Balance September 30, 2019		10,722,401	$	107,224	$	29,691,282	$	(26,744,560	)	$	3,053,946

See accompanying condensed notes to financial statements.

5

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Unaudited)

	Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance January 1, 2018		10,722,401	$	107,224	$	29,559,784	$	(26,084,700	)	$	3,582,308
Net loss		-		-		-		(353,419	)		(353,419	)
Stock-based compensation		-		-		72,187		-			72,187
Balance September 30, 2018		10,722,401	$	107,224	$	29,631,971	$	(26,438,119	)	$	3,301,076
Balance January 1, 2019		10,722,401	$	107,224	$	29,650,760	$	(26,800,152	)	$	2,957,832
Net income		-		-		-		55,592			55,592
Stock-based compensation		-		-		40,522		-			40,522
Balance September 30, 2019		10,722,401	$	107,224	$	29,691,282	$	(26,744,560	)	$	3,053,946

See accompanying condensed notes to financial statements.

6

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(Unaudited)

	2019			2018
Cash flows from operating activities:
Net income (loss)	$	55,592		$	(353,419	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income taxes		74,099			(88,457	)
Depreciation and amortization		153,701			138,670
Deferred rent		--			3,562
Operating lease right-of-use asset, net		31,935			--
Stock-based compensation		40,522			72,187
Changes in operating assets and liabilities:
Accounts receivable		609,260			569,471
Other current assets		39,216			136
Other assets		(13,041	)		(24,819	)
Unexpired subscription revenue		(166,409	)		(94,385	)
Accounts payable		(68,797	)		86,561
Accrued expenses		(129,771	)		(184,213	)
Net cash provided by operating activities		626,307			125,294
Cash flows from investing activities:
Purchase of property and equipment		(124,856	)		(253,992	)
Net cash used in investing activities		(124,856	)		(253,992	)
Net increase (decrease) in cash and cash equivalents		501,451			(128,698	)
Cash and cash equivalents at beginning of period		8,066,899			8,735,148
Cash and cash equivalents at end of period	$	8,568,350		$	8,606,450
Supplemental disclosure of cash flow information:
Cash paid (refunded), net for:
Income taxes	$	5,956		$	(103,812	)

See accompanying condensed notes to financial statements.

7

CREDITRISKMONITOR.COM, INC.

CONDENSED NOTES TO 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, 2018.

The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results for an entire fiscal year.

The December 31, 2018 balance sheet has been derived from the audited financial statements at that date, but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the audited financial statements and the footnotes for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K.

Certain prior year amounts have been reclassified to conform to the current year presentation. The noncurrent portion of unexpired subscription revenue was reclassified to noncurrent liabilities, which had no effect on previously reported net loss or total stockholders’ equity.

(2) Adoption of ASC 842

On January 1, 2019, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), which requires the recognition of the right-of-use assets and related operating and finance lease liabilities on the balance sheet. As permitted by ASC 842, the Company elected the adoption date of January 1, 2019, which is the date of initial application. As a result, the Company’s balance sheet as of December 31, 2018 was not restated, continues to be reported under ASC Topic 840, Leases (“ASC 840”), which did not require the recognition of operating lease liabilities on the balance sheet, and is not comparative. Under ASC 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. The lease classification affects the expense recognition in the statement of operations. Operating lease charges are recorded entirely in operating expenses. Finance lease charges are split, where amortization of the right-of-use asset is recorded in operating expenses and an implied interest component is recorded in interest expense. The expense recognition for operating leases and finance leases under ASC 842 is substantially consistent with ASC 840. As a result, there is no significant difference in the Company’s results of operations presented in its statement of operations for each period presented.

The Company adopted ASC 842 using a modified retrospective approach for all leases existing at January 1, 2019. The adoption of ASC 842 had a substantial impact on its balance sheet. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, upon adoption, leases that were classified as operating leases under ASC 840 were classified as operating leases under ASC 842, and the Company recorded an adjustment of $2.59 million to operating lease right-of-use assets and the related lease liability. The lease liability is based on the present value of the remaining minimum lease payments. As permitted under ASC 842, the Company elected several practical expedients that permits it to not reassess (1) whether a contract is or contains a lease, (2) the classification of existing leases, and (3) whether previously capitalized costs continue to qualify as initial indirect costs. The application of the practical expedients did not have a significant impact on the measurement of the operating lease liability.

8

The impact of the adoption of ASC 842 on the balance sheet at January 1, 2019 was:

	As reported Dec. 31, 2018		Adoption of ASC 842 Increase		Balance Jan. 1, 2019
Operating lease right-to-use asset	$	-	$	2,589,875	$	2,589,875
Total assets		13,617,180		2,589,875		16,207,055
Current portion of operating lease liability		-		143,213		143,213
Operating lease liability		-		2,446,662		2,446,662
Total liabilities and stockholders’ equity		13,617,180		2,589,875		16,207,055

For all leases, at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the remaining lease payments under the lease. Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments and payments for optional renewal periods where it is reasonably certain the renewal period will be exercised. Lease expense for operating leases consists of the lease payments plus any initial direct costs, and is recognized on a straight-line basis over the lease term.

The Company’s operating lease right-of-use asset and operating lease liability represents the lease for the office space used to conduct its business.

The following table reconciles the undiscounted cash flows for the Company’s operating lease at September 30, 2019 to the operating lease liability recorded on the balance sheet:

2019 Remainder	$	63,040
2020		255,311
2021		262,970
2022		270,859
2023		278,985
2024		287,355
Thereafter		1,769,054
Total undiscounted lease payments		3,187,574
LESS: Imputed interest at 4.54%		(705,907	)
Present value of lease payments	$	2,481,667
Current portion of operating lease liability	$	143,694
Operating lease liability		2,337,973
	$	2,481,667

(3) Recently Issued Accounting Standards

The Financial Accounting Standards Board and the SEC have issued certain other accounting pronouncements as of September 30, 2019 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.

(4) Revenue Recognition

The Company applies 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.

9

(5) Stock-Based Compensation

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

The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations for the three and nine months ended September 30:

	3 Months Ended September 30,				9 Months Ended September 30,
	2019		2018		2019		2018
Data and product costs	$	4,789	$	8,914	$	17,198	$	26,742
Selling, general and administrative expenses		7,676		12,286		23,324		45,445
	$	12,465	$	21,200	$	40,522	$	72,187

(6) Fair Value Measurements

The Company records its financial instruments at fair value in accordance with accounting guidance. The determination of fair value assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: (a) Level 1 – valuations based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; (b) Level 2 – valuations based on quoted prices in markets that are not active, or financial instruments for which all significant inputs are observable, either directly or indirectly; and (c) Level 3 – valuations based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable, thus, reflecting assumptions about the market participants.

The Company’s cash and cash equivalents are stated at fair value. The carrying value of accounts receivable, other current assets, accounts payable and other current liabilities 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 table below sets forth the Company’s cash and cash equivalents as of September 30, 2019 and December 31, 2018, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

	September 30, 2019								December 31, 2018
	Level 1		Level 2		Level 3		Total		Total
Cash and cash equivalents	$	8,568,350	$	-	$	-	$	8,568,350	$	8,066,899

The Company did not hold financial assets and liabilities which were recorded at fair value in the Level 2 or 3 categories as of either September 30, 2019 or December 31, 2018.

10

(7) Net Income (Loss) per Share

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

	3 Months Ended September 30,				9 Months Ended September 30,
	2019		2018		2019			2018
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		--		--		36,533			--
LESS: Shares which could be repurchased under treasury stock method		--		--		(33,682	)		--
Weighted average number of common shares outstanding – diluted		10,722,401		10,722,401		10,725,252			10,722,401

For the three and nine months ended September 30, 2019, the computation of diluted net income per share excludes the effects of the assumed exercise of 376,850 and 340,317 options, respectively, since their inclusion would be anti-dilutive as their exercise prices were above market value.

During the three and nine months ended September 30, 2018, the Company recorded a net loss. Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Because the Company has reported a net loss for these periods, diluted net loss per share is the same as basic net loss per share, as the effect of utilizing the fully diluted share count would have reduced the net loss per share. Therefore, all outstanding stock options were excluded from the computation of diluted net loss per share because their effect was anti-dilutive for each of these periods.

(8) Related Party Transaction

On October 24, 2019, the Company’s Board of Directors appointed Michael Flum to serve as Senior Vice President and Chief Operating Officer effective immediately. Mr. Flum had served as Vice President of Operations & Alternative Data since August 3, 2018. He joined the Company on a part-time basis on June 4, 2018 and became a full-time employee on June 2, 2019. Mr. Flum is the son of Jerome Flum, the Company’s Chief Executive Officer and Chairman of the Board of Directors, and the brother of Joshua Flum, a director of the Company.

(9) Subsequent Event

On October 24, 2019, the Company’s Board of Directors declared a dividend of $0.05 per outstanding share of its common stock, payable on December 2, 2019 to stockholders of record of the Company at the close of business on November 14, 2019.

11

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 2019 are to continue to build on the improvement initiatives underway to achieve sustainable, profitable growth. Global market conditions, however, may affect the level and timing of resources deployed in pursuit of these initiatives in 2019.

Financial Condition, Liquidity and Capital Resources

The following table presents selected financial information and statistics as of September 30, 2019 and December 31, 2018 (dollars in thousands):

	September 30, 2019		December 31, 2018
Cash and cash equivalents	$	8,568	$	8,067
Accounts receivable, net	$	1,845	$	2,455
Working capital	$	1,174	$	1,117
Cash ratio		0.88		0.81
Quick ratio		1.07		1.06
Current ratio		1.12		1.11

The Company has invested some of its excess cash in cash equivalents. All highly liquid investments with an original maturity of three months or less when purchased are considered cash equivalents, while those with maturities in excess of three months when purchased are reflected as marketable securities.

As of September 30, 2019, the Company had $8.57 million in cash and cash equivalents, an increase of approximately $501,000 from December 31, 2018. This increase was the result of cash provided by operating activities ($626,000) being greater than cash used to acquire property and equipment ($125,000).

The main component of liabilities at September 30, 2019 is unexpired subscription revenue of $8.57 million, which should not require significant future cash outlay 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 twelve 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 been cash flow positive for 7 of the last 10 fiscal years and 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.

12

Off-Balance Sheet Arrangements

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

Results of Operations

	3 Months Ended September 30,
	2019						2018
	Amount			% of Total Operating Revenues			Amount			% of Total Operating Revenues
Operating revenues	$	3,673,241			100.00	%	$	3,481,359			100.00	%
Operating expenses:
Data and product costs		1,421,290			38.69	%		1,416,783			40.70	%
Selling, general and administrative expenses		1,962,150			53.42	%		2,060,322			59.18	%
Depreciation and amortization		52,667			1.43	%		49,583			1.42	%
Total operating expenses		3,436,107			93.54	%		3,526,688			101.30	%
Income (loss) from operations		237,134			6.46	%		(45,329	)		(1.30	%)
Other income, net		40,223			1.09	%		36,710			1.05	%
Income (loss) before income taxes		277,357			7.55	%		(8,619	)		(0.25	%)
Provision for income taxes		(73,767	)		(2.01	%)		(2,527	)		(0.07	%)
Net income (loss)	$	203,590			5.54	%	$	(11,146	)		(0.32	%)

Operating revenues increased $191,882, or 6%, for the three months ended September 30, 2019 compared to the third quarter of fiscal 2018. This overall revenue growth resulted from an increase in Internet subscription service revenue, attributable to increased sales to new and existing subscribers.

Data and product costs increased $4,507, or 0.3%, for the third quarter of 2019 compared to the same period of fiscal 2018. This increase was due primarily to: (1) higher costs of third-party content, due to minor inflationary increases instituted by some of the Company’s major suppliers, and (2) increases in salaries and related employee benefits. These increases were partially offset by lower costs associated with the outsourcing of certain data entry tasks, as the Company authorized overtime to catch up on some processing backlogs in 2018 which were not incurred in 2019.

Selling, general and administrative expenses decreased $98,172, or 5%, for the third quarter of fiscal 2019 compared to the same period of fiscal 2018. This decrease was due to: (1) lower professional fees as the Company hired in-house counsel as of the beginning of the third quarter, and (2) lower marketing expenses related to the timing of trade show attendance. This decrease was offset in part by: (1) higher rent and related expenses resulting from the Company’s expansion of its office in mid-2018, and (2) increases in salaries and related employee benefits.

Depreciation and amortization increased $3,084, or 6%, for the third quarter of fiscal 2019 compared to the same period of fiscal 2018. This increase was due to the leasehold improvements incurred in connection with the Company’s expansion of its office in mid-2018.

Other income, net increased $3,513 for the third quarter of fiscal 2019 compared to the same period last year. This increase was due to greater dividend income received in the third quarter of fiscal 2019 on all of the Company’s money market fund holdings.

Provision for income taxes increased $71,240 for the third quarter of fiscal 2019 compared to the same period of fiscal 2018. This increase was due to the Company reporting a pre-tax income in 2019 versus a pre-tax loss in 2018, because of the reasons enumerated above, partially offset by a lower effective tax rate in 2019.

13

	9 Months Ended September 30,
	2019						2018
	Amount			% of Total Operating Revenues			Amount			% of Total Operating Revenues
Operating revenues	$	10,736,581			100.00	%	$	10,331,106			100.00	%
Operating expenses:
Data and product costs		4,316,780			40.20	%		4,314,468			41.76	%
Selling, general and administrative expenses		6,277,294			58.47	%		6,398,936			61.94	%
Depreciation and amortization		153,701			1.43	%		138,670			1.34	%
Total operating expenses		10,747,775			100.10	%		10,852,074			105.04	%
Loss from operations		(11,194	)		(0.10	%)		(520,968	)		(5.04	%)
Other income, net		124,322			1.15	%		88,354			0.85	%
Income (loss) before income taxes		113,128			1.05	%		(432,614	)		(4.19	%)
Benefit (provision) for income taxes		(57,536	)		(0.53	%)		79,195			0.77	%
Net income (loss)	$	55,592			(0.52	%)	$	(353,419	)		(3.42	%)

Operating revenues increased $405,475, or 4%, for the nine months ended September 30, 2019 compared to the same period of fiscal 2018. This overall revenue growth resulted from an increase in Internet subscription service revenue, attributable to increased sales to new and existing subscribers.

Data and product costs increased $2,312, or 0.1%, for the first nine months of 2019 compared to the same period of fiscal 2018. This increase was due to higher costs of third-party content, due to minor inflationary increases instituted by some of the Company’s major suppliers, partially offset by: (1) lower salary and related employee benefits, due to a decrease in the stock-based compensation expense for stock options, (2) a decrease in the cost of the third-party hosted facility expense because of non-recurring data charges incurred last year, and (3) lower costs associated with the outsourcing of certain data entry tasks, as last year the Company authorized overtime to catch up on some processing backlogs.

Selling, general and administrative expenses decreased $121,642, or 2%, for the first nine months of fiscal 2019 compared to the same period of fiscal 2018. This decrease was due to lower salary and related employee benefits, because of a headcount reduction as well as a lower bonus accrual, partially offset by: (1) higher rent and related expenses resulting from the Company’s expansion of its office in mid-2018, and (2) the cost of contact management software to assist in identifying new sales leads for the Company’s service.

Depreciation and amortization increased $15,031, or 11%, for the first nine months of fiscal 2019 compared to the same period of fiscal 2018. This increase was due to the leasehold improvements incurred in connection with the Company’s expansion of its office in mid-2018.

Other income, net increased $35,968 for first nine months of fiscal 2019 compared to the same period last year. This increase was due to greater dividend income received in the first nine months of fiscal 2019 on all of the Company’s money market fund holdings.

The Company recorded an income tax provision of $57,536 for the first nine months of fiscal 2019 as it had pre-tax income compared to a tax benefit of $79,195 for the same period of fiscal 2018 as it had a pre-tax loss.

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.

14

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 believes that these expenditures will help it to sustain the revenue growth it has experienced over the last several years. We anticipate that sales and marketing expenses will continue to increase in dollar amount and as a percentage of revenues during the remainder of 2019 and future periods as the Company continues to expand its business on a worldwide basis. Further, the Company expects that product development expenses will also continue to increase in dollar amount and may increase as a percentage of revenues during the remainder of 2019 and future periods because it expects to employ more development personnel on average compared to prior periods and build the infrastructure required to support the development of new and improved products and services. However, as these expenditures are discretionary in nature, the Company expects that the actual amounts incurred will be in line with its projections of future cash flows in order not to negatively impact its future liquidity and capital needs. There can be no assurance that the Company will be able to achieve these objectives within a meaningful time frame.

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) the Company’s ability to retain existing customers, attract new customers at a steady rate and maintain customer satisfaction, (ii) the Company’s ability to maintain gross margins in its existing business and in future product lines and markets, (iii) the development of new services and products by the Company and its competitors, (iv) price competition, (v) the Company’s ability to obtain products and services from its vendors, including information suppliers, on commercially reasonable terms, (vi) the Company’s ability to upgrade and develop its systems and infrastructure, and adapt to technological change, (vii) the Company’s ability to attract and retain personnel in a timely and effective manner, (viii) the Company’s ability to manage effectively its development of new business segments and markets, (ix) the Company’s ability to successfully manage the integration of operations and technology of acquisitions or other business combinations, (x) technical difficulties, system downtime or Internet brownouts, (xi) the amount and timing of operating costs and capital expenditures relating the Company’s business, operations and infrastructure, (xii) governmental regulation and taxation policies, (xiii) disruptions in service by common carriers due to strikes or otherwise, (xiv) risks of fire or other casualty, (xv) litigation costs or other unanticipated expenses, (xvi) interest rate risks and inflationary pressures, and (xvii) general economic conditions and economic conditions specific to the Internet and online commerce.

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.

15

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 “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.

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.

PART II. OTHER INFORMATION

Item 6. Exhibits

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	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
32.2	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

16

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: November 14, 2019	By: /s/	Lawrence Fensterstock
		Lawrence Fensterstock
		Chief Financial Officer &
		Principal Accounting Officer

17

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jerome S. Flum, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CreditRiskMonitor.com, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 14, 2019	By: /s/	Jerome S. Flum
		Jerome S. Flum
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lawrence Fensterstock, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CreditRiskMonitor.com, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 14, 2019	By: /s/	Lawrence Fensterstock
		Lawrence Fensterstock
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

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

In connection with the Quarterly Report of CreditRiskMonitor.com, Inc. on Form 10-Q for the period ended September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jerome S. Flum, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By: /s/	Jerome S. Flum
		Jerome S. Flum
		Chief Executive Officer
November 14, 2019

This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section.

EX-32.2

EXHIBIT 32.2

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

In connection with the Quarterly Report of CreditRiskMonitor.com, Inc. on Form 10-Q for the period ended September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lawrence Fensterstock, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By: /s/	Lawrence Fensterstock
		Lawrence Fensterstock
		Chief Financial Officer
November 14, 2019

This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section.

XML

Fair Value Measurements (Details) - Recurring [Member] - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Cash and cash equivalents measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	$ 8,568,350	$ 8,066,899
Level 1 [Member]
Cash and cash equivalents measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	8,568,350
Level 2 [Member]
Cash and cash equivalents measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	0
Level 3 [Member]
Cash and cash equivalents measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	$ 0

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 04, 2019
Cover [Abstract]
Entity Registrant Name	CREDITRISKMONITOR COM INC
Entity Central Index Key	0000315958
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		10,722,401
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Address, State or Province	NY

XML

STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2017	$ 107,224	$ 29,559,784	$ (26,084,700)	$ 3,582,308
Balance (in shares) at Dec. 31, 2017	10,722,401
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	(353,419)	(353,419)
Stock-based compensation	0	72,187	0	72,187
Balance at Sep. 30, 2018	$ 107,224	29,631,971	(26,438,119)	3,301,076
Balance (in shares) at Sep. 30, 2018	10,722,401
Balance at Jun. 30, 2018	$ 107,224	29,610,771	(26,426,973)	3,291,022
Balance (in shares) at Jun. 30, 2018	10,722,401
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	(11,146)	(11,146)
Stock-based compensation	0	21,200	0	21,200
Balance at Sep. 30, 2018	$ 107,224	29,631,971	(26,438,119)	3,301,076
Balance (in shares) at Sep. 30, 2018	10,722,401
Balance at Dec. 31, 2018	$ 107,224	29,650,760	(26,800,152)	$ 2,957,832
Balance (in shares) at Dec. 31, 2018	10,722,401			10,722,401
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	55,592	$ 55,592
Stock-based compensation	0	40,522	0	40,522
Balance at Sep. 30, 2019	$ 107,224	29,691,282	(26,744,560)	$ 3,053,946
Balance (in shares) at Sep. 30, 2019	10,722,401			10,722,401
Balance at Jun. 30, 2019	$ 107,224	29,678,817	(26,948,150)	$ 2,837,891
Balance (in shares) at Jun. 30, 2019	10,722,401
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	203,590	203,590
Stock-based compensation	0	12,465	0	12,465
Balance at Sep. 30, 2019	$ 107,224	$ 29,691,282	$ (26,744,560)	$ 3,053,946
Balance (in shares) at Sep. 30, 2019	10,722,401			10,722,401

XML

Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2019

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

(3) Recently Issued Accounting Standards

The Financial Accounting Standards Board and the SEC have issued certain other accounting pronouncements as of September 30, 2019 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.

XML

Revenue Recognition

9 Months Ended

Sep. 30, 2019

Revenue Recognition [Abstract]

Revenue Recognition

(4) Revenue Recognition

The Company applies 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.

XML

Related Party Transaction

9 Months Ended

Sep. 30, 2019

Related Party Transaction [Abstract]

Related Party Transaction

(8) Related Party Transaction

On October 24, 2019, the Company’s Board of Directors appointed Michael Flum to serve as Senior Vice President and Chief Operating Officer effective immediately. Mr. Flum had served as Vice President of Operations & Alternative Data since August 3, 2018. He joined the Company on a part-time basis on June 4, 2018 and became a full-time employee on June 2, 2019. Mr. Flum is the son of Jerome Flum, the Company’s Chief Executive Officer and Chairman of the Board of Directors, and the brother of Joshua Flum, a director of the Company.

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Measurements [Abstract]

Cash and Cash Equivalents Measured at Fair Value on Recurring Basis

The table below sets forth the Company’s cash and cash equivalents as of September 30, 2019 and December 31, 2018, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

	September 30, 2019								December 31, 2018
	Level 1		Level 2		Level 3		Total		Total
Cash and cash equivalents	$	8,568,350	$	-	$	-	$	8,568,350	$	8,066,899

XML

Adoption of ASC 842

9 Months Ended

Sep. 30, 2019

Adoption of ASC 842 [Abstract]

Adoption of ASC 842

(2) Adoption of ASC 842

On January 1, 2019, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), which requires the recognition of the right-of-use assets and related operating and finance lease liabilities on the balance sheet. As permitted by ASC 842, the Company elected the adoption date of January 1, 2019, which is the date of initial application. As a result, the Company’s balance sheet as of December 31, 2018 was not restated, continues to be reported under ASC Topic 840, Leases (“ASC 840”), which did not require the recognition of operating lease liabilities on the balance sheet, and is not comparative. Under ASC 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. The lease classification affects the expense recognition in the statement of operations. Operating lease charges are recorded entirely in operating expenses. Finance lease charges are split, where amortization of the right-of-use asset is recorded in operating expenses and an implied interest component is recorded in interest expense. The expense recognition for operating leases and finance leases under ASC 842 is substantially consistent with ASC 840. As a result, there is no significant difference in the Company’s results of operations presented in its statement of operations for each period presented.

The Company adopted ASC 842 using a modified retrospective approach for all leases existing at January 1, 2019. The adoption of ASC 842 had a substantial impact on its balance sheet. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, upon adoption, leases that were classified as operating leases under ASC 840 were classified as operating leases under ASC 842, and the Company recorded an adjustment of $2.59 million to operating lease right-of-use assets and the related lease liability. The lease liability is based on the present value of the remaining minimum lease payments. As permitted under ASC 842, the Company elected several practical expedients that permits it to not reassess (1) whether a contract is or contains a lease, (2) the classification of existing leases, and (3) whether previously capitalized costs continue to qualify as initial indirect costs. The application of the practical expedients did not have a significant impact on the measurement of the operating lease liability.

The impact of the adoption of ASC 842 on the balance sheet at January 1, 2019 was:

	As reported Dec. 31, 2018		Adoption of ASC 842 Increase		Balance Jan. 1, 2019
Operating lease right-to-use asset	$	-	$	2,589,875	$	2,589,875
Total assets		13,617,180		2,589,875		16,207,055
Current portion of operating lease liability		-		143,213		143,213
Operating lease liability		-		2,446,662		2,446,662
Total liabilities and stockholders’ equity		13,617,180		2,589,875		16,207,055

For all leases, at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the remaining lease payments under the lease. Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments and payments for optional renewal periods where it is reasonably certain the renewal period will be exercised. Lease expense for operating leases consists of the lease payments plus any initial direct costs, and is recognized on a straight-line basis over the lease term.

The Company’s operating lease right-of-use asset and operating lease liability represents the lease for the office space used to conduct its business.

The following table reconciles the undiscounted cash flows for the Company’s operating lease at September 30, 2019 to the operating lease liability recorded on the balance sheet:

2019 Remainder	$	63,040
2020		255,311
2021		262,970
2022		270,859
2023		278,985
2024		287,355
Thereafter		1,769,054
Total undiscounted lease payments		3,187,574
LESS: Imputed interest at 4.54%		(705,907	)
Present value of lease payments	$	2,481,667
Current portion of operating lease liability	$	143,694
Operating lease liability		2,337,973
	$	2,481,667

XML

STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
Operating revenues	$ 3,673,241	$ 3,481,359	$ 10,736,581	$ 10,331,106
Operating expenses:
Data and product costs	1,421,290	1,416,783	4,316,780	4,314,468
Selling, general and administrative expenses	1,962,150	2,060,322	6,277,294	6,398,936
Depreciation and amortization	52,667	49,583	153,701	138,670
Total operating expenses	3,436,107	3,526,688	10,747,775	10,852,074
Income (loss) from operations	237,134	(45,329)	(11,194)	(520,968)
Other income, net	40,223	36,710	124,322	88,354
Income (loss) before income taxes	277,357	(8,619)	113,128	(432,614)
Benefit (provision) for income taxes	(73,767)	(2,527)	(57,536)	79,195
Net income (loss)	$ 203,590	$ (11,146)	$ 55,592	$ (353,419)
Net income (loss) per share - Basic and diluted (in dollars per share)	$ 0.02	$ 0	$ 0.01	$ (0.03)
Weighted average number of common shares outstanding - Basic (in shares)	10,722,401	10,722,401	10,722,401	10,722,401
Weighted average number of common shares outstanding - Diluted (in shares)	10,722,401	10,722,401	10,725,252	10,722,401

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Net Income (Loss) per Share (Tables)

9 Months Ended

Sep. 30, 2019

Net Income (Loss) per Share [Abstract]

Weighted Average Number of Shares

(7) Net Income (Loss) per Share

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

	3 Months Ended September 30,				9 Months Ended September 30,
	2019		2018		2019			2018
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		--		--		36,533			--
LESS: Shares which could be repurchased under treasury stock method		--		--		(33,682	)		--
Weighted average number of common shares outstanding – diluted		10,722,401		10,722,401		10,725,252			10,722,401

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(5) Stock-Based Compensation

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

The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations for the three and nine months ended September 30:

	3 Months Ended September 30,				9 Months Ended September 30,
	2019		2018		2019		2018
Data and product costs	$	4,789	$	8,914	$	17,198	$	26,742
Selling, general and administrative expenses		7,676		12,286		23,324		45,445
	$	12,465	$	21,200	$	40,522	$	72,187

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Subsequent Event

9 Months Ended

Sep. 30, 2019

Subsequent Event [Abstract]

Subsequent Event

(9) Subsequent Event

On October 24, 2019, the Company’s Board of Directors declared a dividend of $0.05 per outstanding share of its common stock, payable on December 2, 2019 to stockholders of record of the Company at the close of business on November 14, 2019.

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Net Income (Loss) per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net Income (Loss) per Share [Abstract]
Weighted average number of common shares outstanding - basic (in shares)	10,722,401	10,722,401	10,722,401	10,722,401
Potential shares exercisable under stock option plans (in shares)	0	0	36,533	0
LESS: Shares which could be repurchased under treasury stock method (in shares)	0	0	(33,682)	0
Weighted average number of common shares outstanding - diluted (in shares)	10,722,401	10,722,401	10,725,252	10,722,401
Stock Options [Member]
Antidilutive Securities Excluded from Computation [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	376,850		340,317

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Net Income (Loss) per Share

9 Months Ended

Sep. 30, 2019

Net Income (Loss) per Share [Abstract]

Net Income (Loss) per Share

(7) Net Income (Loss) per Share

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

	3 Months Ended September 30,				9 Months Ended September 30,
	2019		2018		2019			2018
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		--		--		36,533			--
LESS: Shares which could be repurchased under treasury stock method		--		--		(33,682	)		--
Weighted average number of common shares outstanding – diluted		10,722,401		10,722,401		10,725,252			10,722,401

For the three and nine months ended September 30, 2019, the computation of diluted net income per share excludes the effects of the assumed exercise of 376,850 and 340,317 options, respectively, since their inclusion would be anti-dilutive as their exercise prices were above market value.

During the three and nine months ended September 30, 2018, the Company recorded a net loss. Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Because the Company has reported a net loss for these periods, diluted net loss per share is the same as basic net loss per share, as the effect of utilizing the fully diluted share count would have reduced the net loss per share. Therefore, all outstanding stock options were excluded from the computation of diluted net loss per share because their effect was anti-dilutive for each of these periods.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation [Abstract]

Stock-based Compensation Expense for Stock Options

The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations for the three and nine months ended September 30:

	3 Months Ended September 30,				9 Months Ended September 30,
	2019		2018		2019		2018
Data and product costs	$	4,789	$	8,914	$	17,198	$	26,742
Selling, general and administrative expenses		7,676		12,286		23,324		45,445
	$	12,465	$	21,200	$	40,522	$	72,187

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BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 8,568,350	$ 8,066,899
Accounts receivable, net of allowance	1,845,325	2,454,585
Other current assets	522,645	561,861
Total current assets	10,936,320	11,083,345
Property and equipment, net	514,917	543,762
Operating lease right-of-use asset	2,425,195	0
Goodwill	1,954,460	1,954,460
Other assets	48,654	35,613
Total assets	15,879,546	13,617,180
Current liabilities:
Unexpired subscription revenue	8,358,081	8,560,316
Accounts payable	25,970	94,767
Current portion of operating lease liability	143,694	0
Accrued expenses	1,234,271	1,311,218
Total current liabilities	9,762,016	9,966,301
Deferred taxes on income, net	511,656	490,381
Unexpired subscription revenue, less current portion	213,955	178,129
Operating lease liability, less current portion	2,337,973	0
Other liabilities	0	24,537
Total liabilities	12,825,600	10,659,348
Stockholders' equity:
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued	0	0
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	29,691,282	29,650,760
Accumulated deficit	(26,744,560)	(26,800,152)
Total stockholders' equity	3,053,946	2,957,832
Total liabilities and stockholders' equity	$ 15,879,546	$ 13,617,180

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STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income (loss)	$ 55,592	$ (353,419)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income taxes	74,099	(88,457)
Depreciation and amortization	153,701	138,670
Deferred rent	0	3,562
Operating lease right-of-use asset, net	31,935	0
Stock-based compensation	40,522	72,187
Changes in operating assets and liabilities:
Accounts receivable	609,260	569,471
Other current assets	39,216	136
Other assets	(13,041)	(24,819)
Unexpired subscription revenue	(166,409)	(94,385)
Accounts payable	(68,797)	86,561
Accrued expenses	(129,771)	(184,213)
Net cash provided by operating activities	626,307	125,294
Cash flows from investing activities:
Purchase of property and equipment	(124,856)	(253,992)
Net cash used in investing activities	(124,856)	(253,992)
Net increase (decrease) in cash and cash equivalents	501,451	(128,698)
Cash and cash equivalents at beginning of period	8,066,899	8,735,148
Cash and cash equivalents at end of period	8,568,350	8,606,450
Cash paid (refunded), net for:
Income taxes	$ 5,956	$ (103,812)

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Stock-Based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock-based compensation expense for stock options [Abstract]
Stock-based compensation expense	$ 12,465	$ 21,200	$ 40,522	$ 72,187
Data and Product Costs [Member]
Stock-based compensation expense for stock options [Abstract]
Stock-based compensation expense	4,789	8,914	17,198	26,742
Selling, General and Administrative Expenses [Member]
Stock-based compensation expense for stock options [Abstract]
Stock-based compensation expense	$ 7,676	$ 12,286	$ 23,324	$ 45,445

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Adoption of ASC 842 (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Balance Sheet [Abstract]
Operating lease right-to-use asset	$ 2,425,195	$ 0
Total assets	15,879,546	13,617,180
Current portion of operating lease liability	143,694	0
Operating lease liability	2,337,973	0
Total liabilities and stockholders' equity	15,879,546	13,617,180
Minimum Lease Payments [Abstract]
2019 Remainder	63,040
2020	255,311
2021	262,970
2022	270,859
2023	278,985
2024	287,355
Thereafter	1,769,054
Total undiscounted lease payments	3,187,574
LESS: Imputed interest at 4.54%	(705,907)
Present value of lease payments	2,481,667
Current portion of operating lease liability	143,694	0
Operating lease liability	2,337,973	0
Present value of lease payments	$ 2,481,667
Additional information of Minimum Lease Payments [Abstract]
Discount rate	4.54%
ASC 842 [Member]
Balance Sheet [Abstract]
Operating lease right-to-use asset		2,589,875
Total assets		16,207,055
Current portion of operating lease liability		143,213
Operating lease liability		2,446,662
Total liabilities and stockholders' equity		16,207,055
Minimum Lease Payments [Abstract]
Current portion of operating lease liability		143,213
Operating lease liability		2,446,662
ASC 842 [Member] | As Reported [Member]
Balance Sheet [Abstract]
Operating lease right-to-use asset		0
Total assets		13,617,180
Current portion of operating lease liability		0
Operating lease liability		0
Total liabilities and stockholders' equity		13,617,180
Minimum Lease Payments [Abstract]
Current portion of operating lease liability		0
Operating lease liability		0
ASC 842 [Member] | Adoption of ASC 842 Increase [Member]
Balance Sheet [Abstract]
Operating lease right-to-use asset		2,589,875
Total assets		2,589,875
Current portion of operating lease liability		143,213
Operating lease liability		2,446,662
Total liabilities and stockholders' equity		2,589,875
Minimum Lease Payments [Abstract]
Current portion of operating lease liability		143,213
Operating lease liability		$ 2,446,662

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Subsequent Event (Details) - Subsequent Event [Member] - Dividend Declared [Member]	Oct. 24, 2019 $ / shares
Dividends [Abstract]
Dividend declaration date	Oct. 24, 2019
Dividend declared (in dollars per share)	$ 0.05
Dividend payment date	Dec. 02, 2019
Dividend record date	Nov. 14, 2019

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Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Measurements [Abstract]

Fair Value Measurements

(6) Fair Value Measurements

The Company records its financial instruments at fair value in accordance with accounting guidance. The determination of fair value assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: (a) Level 1 – valuations based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; (b) Level 2 – valuations based on quoted prices in markets that are not active, or financial instruments for which all significant inputs are observable, either directly or indirectly; and (c) Level 3 – valuations based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable, thus, reflecting assumptions about the market participants.

The Company’s cash and cash equivalents are stated at fair value. The carrying value of accounts receivable, other current assets, accounts payable and other current liabilities 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 table below sets forth the Company’s cash and cash equivalents as of September 30, 2019 and December 31, 2018, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

	September 30, 2019								December 31, 2018
	Level 1		Level 2		Level 3		Total		Total
Cash and cash equivalents	$	8,568,350	$	-	$	-	$	8,568,350	$	8,066,899

The Company did not hold financial assets and liabilities which were recorded at fair value in the Level 2 or 3 categories as of either September 30, 2019 or December 31, 2018.

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Adoption of ASC 842 (Tables)

9 Months Ended

Sep. 30, 2019

Adoption of ASC 842 [Abstract]

Impact of Adoption of ASC 842 on Balance Sheet

The impact of the adoption of ASC 842 on the balance sheet at January 1, 2019 was:

	As reported Dec. 31, 2018		Adoption of ASC 842 Increase		Balance Jan. 1, 2019
Operating lease right-to-use asset	$	-	$	2,589,875	$	2,589,875
Total assets		13,617,180		2,589,875		16,207,055
Current portion of operating lease liability		-		143,213		143,213
Operating lease liability		-		2,446,662		2,446,662
Total liabilities and stockholders’ equity		13,617,180		2,589,875		16,207,055

Maturity of Operating Lease Liability

The following table reconciles the undiscounted cash flows for the Company’s operating lease at September 30, 2019 to the operating lease liability recorded on the balance sheet:

2019 Remainder	$	63,040
2020		255,311
2021		262,970
2022		270,859
2023		278,985
2024		287,355
Thereafter		1,769,054
Total undiscounted lease payments		3,187,574
LESS: Imputed interest at 4.54%		(705,907	)
Present value of lease payments	$	2,481,667
Current portion of operating lease liability	$	143,694
Operating lease liability		2,337,973
	$	2,481,667

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BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	5,000,000	5,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	32,500,000	32,500,000
Common stock, issued (in shares)	10,722,401	10,722,401
Common stock, outstanding (in shares)	10,722,401	10,722,401

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Basis of Presentation

9 Months Ended

Sep. 30, 2019

Basis of Presentation [Abstract]

Basis of Presentation

(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, 2018.

The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results for an entire fiscal year.

The December 31, 2018 balance sheet has been derived from the audited financial statements at that date, but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the audited financial statements and the footnotes for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K.

Certain prior year amounts have been reclassified to conform to the current year presentation. The noncurrent portion of unexpired subscription revenue was reclassified to noncurrent liabilities, which had no effect on previously reported net loss or total stockholders’ equity.