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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Credit Risk Monitor Com Inc (QX) | USOTC:CRMZ | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.10 | 2.00 | 2.20 | 0.00 | 12:58:43 |
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)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
None
|
N/A
|
N/A
|
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
|
Non-accelerated filer ☑
|
Smaller reporting company ☑
|
|
|
|
Emerging growth company ☐
|
ITEM 1.
|
BUSINESS
|
(1)
|
An annual fixed-price service (the “Fundamental Service”) with unlimited usage and coverage of public and private (where available) companies, featuring multi-period spreads of financial reports and ratio analysis, as well as up-to-date
financial news screened specifically for usefulness in credit evaluation. Another feature of the service is notification and delivery of this news via email, concerning only companies of interest to the subscriber. This service is
supplemented with trade receivable data contributed mainly by CreditRiskMonitor’s subscribers, as well as U.S. public-record filing information (i.e., suits, liens, judgments and bankruptcy information) covering millions of public and
private U.S. companies.
|
i.
|
The FRISK® score is updated daily, based on the latest information available to the Company, and is derived from a structural statistical model back-tested using company data and bankruptcies between 2003 and 2013. This period covers
9,600 unique businesses and includes 580 bankruptcies over a period that includes the Great Recession. As of June 2016, the FRISK® score became even more
predictive as we now factor in, when available, anonymous, aggregate crowd-sourced usage data from our subscribers – the FRISK® score can now predict public company bankruptcy risk with 96% accuracy within a 12-month period. The
Company believes that some of the most experienced and knowledgeable credit and risk professionals use its website every day to analyze the companies they do business with. When the Company’s subscribers are concerned with a risky company,
they investigate that company more closely, in what we have found to be distinct behavioral patterns. With this anonymous, aggregate behavior included, the FRISK® score is more sensitive and accurate, moving a relatively small, but largely
important segment of businesses from risky to riskier. Essentially, when credit professionals start looking more closely as a group, there is usually a growing concern that can result in the reduction or even elimination of trade credit
extension, specifically at one of the most critical financing times for a corporation. Calculation of the FRISK® score involves preparation of data from multiple sources, the use of executable software created expressly by and owned by the
Company as well as sophisticated algorithms and weighting techniques which are proprietary Company trade secrets. To its knowledge, CreditRiskMonitor is the only company currently using crowdsourcing of subscriber activity in generating a
financial risk score. The Company’s website is highly structured, enabling it to track very specific patterns of use through its sophisticated and proprietary algorithms, which means the Company has been able to analyze click patterns for
the past 10 years, through many financial shifts. At the end of 2020, the Fundamental Service covered over 57,000 public companies worldwide, totaling approximately $68 trillion in corporate
revenue compared to world Gross Domestic Product (“GDP”) of $87.6 trillion. Subscribers may opt, at lower prices, for limited regional coverage, i.e., “North American Service” for coverage of just U.S., Canadian, Mexican and Caribbean
companies.
|
|
ii. |
The PAYCE® score provides a highly accurate measure of financial stress when no financial statements are available for private companies. It utilizes payment and U.S. federal tax lien data from CreditRiskMonitor’s extensive database,
analyzed with sophisticated deep neural network modeling technology to deliver a 70% accurate 2 score on approximately 90,000 private companies in the United States. Unlike other payment based models, a PAYCE® score is only
calculated when there is both a sufficient number of trade contributors and trade lines on a company for the analysis.
|
|
(2) |
Financial statement processing, an add-on service, which provides customers flexible options to help ease their process in the collection, data entry and standardization of private company financial statements, as well as providing private
company FRISK® scores featuring accuracy levels in the 90%+ range2 and peer analysis to public company comparable.
|
|
(3) |
Single credit reports on any of the over 57,000 companies covered in item (1) above. These reports are sold mainly via credit card and obtained via the Internet.
|
|
(4) |
Individual credit reports on approximately 20 million foreign public and private companies. These reports are purchased by CreditRiskMonitor through an affiliation with a third-party supplier and sold to CreditRiskMonitor subscribers.
|
|
• |
Low price. The prices of CreditRiskMonitor’s services are low compared to a subscriber’s possible losses from not getting paid, and are low compared to the cost of most competitive credit report
products.
|
|
• |
Non-cyclical. As economic growth slows, general corporate credit risk usually increases and the credit manager’s function rises in importance and complexity. Additionally, products that allow credit
managers to perform their jobs more efficiently and cost effectively, compared to competitive services, should gain market share in most business environments and especially during a downturn. In a contracting business environment, many
companies face increasing price competition which should accelerate their shift to lower cost technologies and providers, such as CreditRiskMonitor. CreditRiskMonitor’s business and revenues have continued to grow as world economic growth
slowed or declined. Over the last ten years the issuance of corporate “junk bonds” and other debt by public companies and public debt by private companies (LBO’s, etc.), and the development of credit instruments to hedge default and interest
rate risk (i.e., credit derivatives) has increased dramatically. It is difficult to get a complete or totally accurate number of the totals, but according to the Bank for International Settlements, as of June 2020 the total “notional” value of
Over-the-Counter Credit Default Swap Derivatives was $8.8 trillion. This was down from the peak value of $61.2 trillion at the end of 2007 and from $21.1 trillion at the end of 2013. To put this in perspective, in 2019 the world GDP was $87.8
trillion, and the market value of all worldwide domestic equity at December 31, 2020 was approximately $95 trillion. Thus, publicly listed companies and private companies with public debt have a vulnerability to business cycle contraction and
the attendant market risks for interest rates and stock markets. Large over-the-counter debt and generally high market uncertainty indicate continued high risk and complexity extending commercial trade credit to many companies, and puts a
premium on the speed and analytic strength of CreditRiskMonitor’s service.
|
|
• |
Recurring revenue stream. The recurring annual revenue stream of its subscription fee model gives the Company stability not found in a one-time sale product-based company.
|
|
• |
Profit multiplier. Some of the Company’s basic costs are being reduced. On a broad generic basis, the prices of computer hardware, software and telecommunications have been coming down for all buyers,
including CreditRiskMonitor. In addition, CreditRiskMonitor has automated a significant amount of the processes used to create and deliver its service; therefore, its production costs, apart from the development cost of enhancing and upgrading
the Company’s website, are relatively stable over a wide range of increasing revenue. Offsetting these cost reductions is the cost of increasing the data content of CreditRiskMonitor’s services if the Company chooses to increase content and not
raise its prices to cover these additional costs.
|
|
• |
Self-financing. CreditRiskMonitor’s business has no inventory, manufacturing or warehouse facilities, and payment for the subscription service is made early in the subscription cycle. Thus, the
Company’s business is characterized by low capital-intensity, and yet it is a business capable of generating high margins and sufficient positive cash flow to grow the business organically with little need for external capital.
|
|
• |
Management. CreditRiskMonitor has in-place an experienced management team with proven talent in business credit evaluation systems and Internet development. The Company’s senior management team has an
average tenure of over 15 years.
|
|
• |
Growth in U.S. market share. Faced with a dominant U.S. competitor, Dun & Bradstreet, as well as several other larger competitors, the Company’s primary goal is to gain market share. The Company
believes that many potential customers are unaware of its service, while many others who are aware of CreditRiskMonitor have not evaluated its service.
|
|
• |
International penetration. Foreign companies doing business within the U.S. or other foreign countries may have the same need as domestic companies for CreditRiskMonitor’s credit analysis of U.S. and
foreign companies. Internationally, the Internet provides a mechanism for rapid and inexpensive marketing and distribution of CreditRiskMonitor’s service.
|
|
• |
Broaden the services supplied. Revenue per subscriber may increase over time as the Company adds functionality and content. Also, revenue per client should increase over time as the Company sells
additional passwords (upsell) and services (cross sell) to existing clients.
|
|
• |
Lowest cost provider. CreditRiskMonitor’s sourcing, analysis and preparation of data into a usable form is highly automated. CreditRiskMonitor delivers all of its information to customers via the
Internet and there is automation between the sourcing of data and delivery of a company credit report to a subscriber. Because of this automation, CreditRiskMonitor’s production costs are relatively stable over a wide range of increasing
revenue. Management believes CreditRiskMonitor’s cost structure is one of the lowest in its industry while maintaining a higher client service level.
|
|
• |
High margins and return on investment. The Company foresees declining unit costs in some important expense areas, such as computer and communication costs, which should increase net profits from its
subscription income stream. The Company has lower sales expenses for customer renewals than for new sales, and the Company expects that its renewal revenue will continue to grow to be a larger share of total revenue each year. All these
naturally occurring unit cost reductions will be in addition to the cost reductions achieved through servicing more accounts over the Company’s in-place fixed costs.
|
|
• |
Credit professionals need to save time, when analyzing their most important customers and suppliers, and the CreditRiskMonitor service provides this critical benefit. CreditRiskMonitor believes that its reports and monitoring of public
companies, having aggregate revenues of approximately $68 trillion (compared to world GDP of $87.6 trillion in 2019), and private companies, are superior in this way to competitive products or services in that the CreditRiskMonitor service
provides public and private company financial information in greater depth and better analytical efficiency. It also includes timely email alerts enabling credit professionals to easily stay on top of financial developments at their customers,
without the clutter of non-financial news prevalent at other news services. Finally, the proprietary FRISK® and PAYCE® scores, ratings from Moody’s, Fitch and DBRS Morningstar, the Altman Z” scores and the trade payment reports
delivered by the Company’s service enable further efficiency by focusing each subscriber’s attention on only those companies showing financial weakness. The accuracy of our proprietary FRISK® score, powered by the crowd-sourced usage data from
our subscribers, has proven to be a unique selling point.
|
|
• |
For low-volume customers, CreditRiskMonitor sells single commercial credit reports for a flat price of $250 per report, using credit card transactions via the Internet.
|
ITEM 2.
|
PROPERTIES.
|
ITEM 3.
|
LEGAL PROCEEDINGS.
|
ITEM 4.
|
MINE SAFETY DISCLOSURES.
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
High Bid
|
Low Bid
|
||||||||
2019
|
|
||||||||
First Quarter
|
$
|
2.05
|
$
|
1.60
|
|||||
Second Quarter
|
$
|
1.75
|
$
|
1.20
|
|||||
Third Quarter
|
$
|
1.60
|
$
|
1.20
|
|||||
Fourth Quarter
|
$
|
1.60
|
$
|
1.23
|
|||||
2020
|
|
||||||||
First Quarter
|
$
|
1.62
|
$
|
1.23
|
|||||
Second Quarter
|
$
|
1.55
|
$
|
1.40
|
|||||
Third Quarter
|
$
|
2.30
|
$
|
1.40
|
|||||
Fourth Quarter
|
$
|
2.47
|
$
|
2.10
|
ITEM 6.
|
SELECTED FINANCIAL DATA.
|
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
2020
|
2019
|
|||||||
Cash and cash equivalents
|
$
|
10,303
|
$
|
8,276
|
||||
Accounts receivable, net
|
$
|
2,557
|
$
|
2,288
|
||||
Working capital
|
$
|
848
|
$
|
832
|
||||
Cash ratio
|
0.79
|
0.80
|
||||||
Quick ratio
|
0.98
|
1.03
|
||||||
Current ratio
|
1.06
|
1.08
|
Year Ended December 31,
|
||||||||||||||||
2020
|
2019
|
|||||||||||||||
Amount |
% of Total
Revenue
|
Amount |
% of Total
Revenue
|
|||||||||||||
Operating revenues
|
$
|
15,732,366
|
100.00
|
%
|
$
|
14,501,173
|
100.00
|
%
|
||||||||
Operating expenses:
|
||||||||||||||||
Data and product costs
|
6,026,464
|
38.31
|
%
|
5,759,660
|
39.72
|
%
|
||||||||||
Selling, general and administrative expenses
|
9,724,182
|
61.81
|
%
|
8,347,083
|
57.56
|
%
|
||||||||||
Depreciation and amortization
|
219,847
|
1.40
|
%
|
207,224
|
1.43
|
%
|
||||||||||
Total operating expenses
|
15,970,493
|
101.51
|
%
|
14,313,967
|
98.71
|
%
|
||||||||||
(Loss) income from operations
|
(238,127
|
)
|
(1.51
|
%)
|
187,206
|
1.29
|
%
|
|||||||||
Other income, net
|
26,774
|
0.17
|
%
|
155,852
|
1.08
|
%
|
||||||||||
(Loss) income before income taxes
|
(211,353
|
)
|
(1.34
|
%)
|
343,058
|
2.37
|
%
|
|||||||||
Benefit from (provision for) income taxes
|
163,925
|
1.04
|
%
|
(125,354
|
)
|
(0.87
|
%)
|
|||||||||
Net (loss) income
|
$
|
(47,428
|
)
|
(0.30
|
%)
|
$
|
217,704
|
1.50
|
%
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
|
2020
|
2019
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
10,302,732
|
$
|
8,275,836
|
||||
Available-for-sale securities - municipal bonds
|
458,237
|
--
|
||||||
Accounts receivable, net of allowance of $30,000
|
2,557,443
|
2,287,921
|
||||||
Other current assets
|
589,072
|
549,821
|
||||||
Total current assets
|
13,907,484
|
11,113,578
|
||||||
Property and equipment, net
|
545,675
|
477,973
|
||||||
Operating lease right-of-use asset
|
2,200,031
|
2,380,974
|
||||||
Goodwill
|
1,954,460
|
1,954,460
|
||||||
Other assets
|
84,892
|
35,723
|
||||||
Total assets
|
$
|
18,692,542
|
$
|
15,962,708
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Unexpired subscription revenue
|
$
|
9,646,407
|
$
|
8,651,843
|
||||
Accounts payable
|
130,089
|
137,500
|
||||||
Current portion of operating lease liability
|
161,874
|
147,229
|
||||||
Current portion of bank loan
|
1,299,007
|
--
|
||||||
Accrued expenses
|
1,822,485
|
1,344,550
|
||||||
Total current liabilities
|
13,059,862
|
10,281,122
|
||||||
Deferred taxes on income, net
|
333,432
|
521,765
|
||||||
Unexpired subscription revenue, less current portion
|
197,545
|
166,169
|
||||||
Bank loan, less current portion
|
262,493
|
--
|
||||||
Operating lease liability, less current portion
|
2,137,559
|
2.299.433
|
||||||
Total liabilities
|
15,990,891
|
13,268,489
|
||||||
Commitments and contingencies
|
||||||||
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
|
29,760,533
|
29,705,673
|
||||||
Accumulated deficit
|
(27,166,106
|
)
|
(27,118,678
|
)
|
||||
Total stockholders’ equity
|
2,701,651
|
2,694,219
|
||||||
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
18,692,542
|
$
|
15,962,708
|
2020
|
2019
|
|||||||
Operating revenues
|
$
|
15,732,366
|
$
|
14,501,173
|
||||
Operating expenses:
|
||||||||
Data and product costs
|
6,026,464
|
5,759,660
|
||||||
Selling, general and administrative expenses
|
9,724,182
|
8,347,083
|
||||||
Depreciation and amortization
|
219,847
|
207,224
|
||||||
Total operating expenses
|
15,970,493
|
14,313,967
|
||||||
Income (loss) from operations
|
(238,127
|
)
|
187,206
|
|||||
Other income, net
|
26,774
|
155,852
|
||||||
Income (loss) before income taxes
|
(211,353
|
)
|
343,058
|
|||||
Benefit from (provision for) income taxes
|
163,925
|
(125,464
|
)
|
|||||
Net income (loss)
|
$
|
(47,428
|
)
|
$
|
217,594
|
|||
Net income (loss) per share:
|
||||||||
Basic
|
$
|
(0.00
|
)
|
$
|
0.02
|
|||
Diluted
|
$
|
(0.00
|
)
|
$
|
0.02
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Stockholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||
Balance January 1, 2019
|
10,722,401
|
$
|
107,224
|
$
|
29,650,760
|
$
|
(26,800,152
|
)
|
$
|
2,957,832
|
||||||||||
Net income
|
-
|
-
|
-
|
217,594
|
217,594
|
|||||||||||||||
Cash dividend paid
|
-
|
-
|
-
|
(536,120
|
)
|
(536,120
|
)
|
|||||||||||||
Stock-based compensation
|
-
|
-
|
54,913
|
-
|
54,913
|
|||||||||||||||
Balance December 31, 2019
|
10,722,401
|
107,224
|
29,705,673
|
(27,118,678
|
)
|
2,694,219
|
||||||||||||||
Net loss
|
-
|
-
|
-
|
(47,428
|
)
|
(47,428
|
)
|
|||||||||||||
Stock-based compensation
|
-
|
-
|
54,860
|
-
|
54,860
|
|||||||||||||||
Balance December 31, 2020
|
10,722,401
|
$
|
107,224
|
$
|
29,760,533
|
$
|
(27,166,106
|
)
|
$
|
2,701,651
|
|
2020
|
2019
|
||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$
|
(47,428
|
)
|
$
|
217,594
|
|||
Adjustments to reconcile net income (loss) to net
|
||||||||
cash provided by operating activities:
|
||||||||
Deferred income taxes
|
(188,333
|
)
|
31,384
|
|||||
Depreciation and amortization
|
219,847
|
207,224
|
||||||
Stock-based compensation
|
54,860
|
54,913
|
||||||
Operating lease
|
33,715
|
41,151
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(269,523
|
)
|
166,664
|
|||||
Other current assets
|
3,153
|
12,040
|
||||||
Other assets
|
(91,068
|
)
|
(110
|
)
|
||||
Unexpired subscription revenue
|
1,025,940
|
79,567
|
||||||
Accounts payable
|
(7,412
|
)
|
42,733
|
|||||
Accrued expenses
|
477,936
|
33,332
|
||||||
Net cash provided by operating activities
|
1,211,687
|
886,492
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of available-for-sale securities - municipal bonds
|
(458,742
|
)
|
--
|
|||||
Purchase of property and equipment
|
(287,549
|
)
|
(141,435
|
)
|
||||
Net cash used in investing activities
|
(746,291
|
)
|
(141,435
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Dividend paid to stockholders
|
--
|
(536,120
|
)
|
|||||
Bank loan
|
1,561,500
|
--
|
||||||
|
||||||||
Net cash provided by (used in) financing activities
|
1,561,500
|
(536,120
|
)
|
|||||
Net increase in cash and cash equivalents
|
2,026,896
|
208,937
|
||||||
Cash and cash equivalents at beginning of year
|
8,275,836
|
8,066,899
|
||||||
Cash and cash equivalents at end of year
|
$
|
10,302,732
|
$
|
8,275,836
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid, net during the year for:
|
||||||||
Income taxes
|
$
|
66,000
|
$
|
41,261
|
|
• |
Fixtures, equipment and software -- 3 to 10 years
|
|
• |
Leasehold improvements -- lower of estimated useful life or term of lease (i.e., 2 to 7 years)
|
December 31, 2020
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$
|
10,302,732
|
$
|
-
|
$
|
-
|
$
|
10,302,732
|
||||||||
Available-for-sale securities
|
$
|
-
|
$
|
458,237
|
$
|
-
|
$
|
458,237
|
December 31, 2019
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$
|
8,275,836
|
$
|
-
|
$
|
-
|
$
|
8,275,836
|
Cost
|
Unrealized Loss
|
Fair Value
|
||||||||||
Available-for-sale securities
|
$
|
458,742
|
$
|
(505
|
)
|
$
|
458,237
|
Available-for-sale securities
|
||||
Due after 10 years
|
$
|
458,237
|
2020
|
2019
|
|||||||
Current:
|
||||||||
Federal
|
$
|
37,373
|
$
|
67,677
|
||||
State
|
(12,854
|
)
|
26,404
|
|||||
Deferred:
|
||||||||
Federal
|
(67,742
|
)
|
23,781
|
|||||
State
|
(120,702
|
)
|
7,602
|
|||||
$
|
(163,925
|
)
|
$
|
125,464
|
2020
|
2019
|
|||||||
Computed “expected” (benefit) expense
|
$
|
(44,384
|
)
|
$
|
72,042
|
|||
Permanent differences
|
11,516
|
25,619
|
||||||
State and local income tax expense
|
2,720
|
12,344
|
||||||
True-up of current taxes
|
(25,916
|
)
|
4,763
|
|||||
True-up of deferred taxes
|
11,644
|
11,014
|
||||||
Change in state apportionment
|
(119,505
|
)
|
(318
|
)
|
||||
Income tax (benefit) expense
|
$
|
(163,925
|
)
|
$
|
125,464
|
2020
|
2019
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryovers
|
$
|
-
|
$
|
-
|
||||
Stock options
|
17,556
|
20,085
|
||||||
Accrued vacation
|
85,436
|
70,654
|
||||||
Bad debt allowance
|
6,411
|
8,314
|
||||||
Deferred revenue
|
4,732
|
5,833
|
||||||
Deferred rent
|
15,999
|
11,403
|
||||||
Other
|
17,212
|
21,972
|
||||||
Total deferred tax assets
|
147,346
|
138,261
|
||||||
Deferred tax liabilities:
|
||||||||
Goodwill
|
(417,688
|
)
|
(541,628
|
)
|
||||
Fixed assets
|
(63,090
|
)
|
(118,398
|
)
|
||||
Total deferred tax liabilities
|
(480,778
|
)
|
(660,026
|
)
|
||||
Net deferred tax liabilities
|
$
|
(333,432
|
)
|
$
|
(521,765
|
)
|
Number
of Shares
|
Weighted
Average
Exercise
Price
|
|||||||
Outstanding at January 1, 2019
|
376,850
|
$
|
2.98
|
|||||
Granted
|
195,800
|
1.45
|
||||||
Forfeited
|
(115,780
|
)
|
3.06
|
|||||
Outstanding at December 31, 2019
|
456,870
|
$
|
2.30
|
|||||
Granted
|
182,100
|
2.17
|
||||||
Expired
|
(26,000
|
)
|
4.62
|
|||||
Forfeited
|
(37,220
|
)
|
2.15
|
|||||
Outstanding at December 31, 2020
|
575,750
|
$
|
2.17
|
2020
|
2019
|
|||||||
Data and product costs
|
$
|
19,928
|
$
|
22,460
|
||||
Selling, general and administrative costs
|
34,932
|
32,453
|
||||||
$
|
54,860
|
$
|
54,913
|
2020
|
2019
|
|
Risk-free interest rate
|
0.26%
|
1.78%
|
Expected volatility factor
|
72.57%
|
64.00%
|
Expected dividends
|
0.05
|
0.05
|
Expected life of the option (years)
|
7.17
|
9
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||
Range of
Exercise Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
(in years)
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
||||||||||||||||
$ 1.00 - $ 2.00
|
256,100
|
8.36
|
$
|
1.52
|
-
|
-
|
|||||||||||||||
$ 2.01 - $ 3.00
|
279,100
|
5.67
|
$
|
2.42
|
57,350
|
$
|
2.49
|
||||||||||||||
$ 3.01 - $ 6.00
|
40,550
|
0.84
|
$
|
4.51
|
32,550
|
$
|
4.73
|
||||||||||||||
575,750
|
6.53
|
$
|
2.17
|
89,900
|
$
|
3.30
|
2020
|
2019
|
|||||||
Computer equipment and software
|
$
|
1,720,814
|
$
|
1,485,579
|
||||
Furniture and fixtures
|
512,975
|
507,503
|
||||||
Leasehold improvements
|
268,741
|
240,328
|
||||||
2,502,530
|
2,233,410
|
|||||||
Less accumulated depreciation and amortization
|
(1,956,855
|
)
|
(1,755,437
|
)
|
||||
$
|
545,675
|
$
|
477,973
|
2021
|
$
|
262,970
|
||
2022
|
270,859
|
|||
2023
|
278,985
|
|||
2024
|
287,355
|
|||
2025
|
295,975
|
|||
Thereafter
|
1,473,078
|
|||
Total future undiscounted lease payments
|
2,869,222
|
|||
LESS: Imputed interest
|
(569,789
|
)
|
||
Present value of lease liability
|
$
|
2,299,433
|
||
Current portion of operating lease liability
|
$
|
161,874
|
||
Non-current portion of operating lease liability
|
2,137,559
|
|||
$
|
2,299,433
|
2020
|
2019
|
|||||||
Net income (loss)
|
$
|
(47,428
|
)
|
$
|
217,594
|
|||
Weighted average common shares outstanding – basic
|
10,722,401
|
10,722,401
|
||||||
Potential shares exercisable under stock option plans
|
--
|
13,700
|
||||||
Less: Shares which could be repurchased under treasury stock method
|
--
|
(11,562
|
)
|
|||||
Weighted average common shares outstanding – diluted
|
10,722,401
|
10,724,539
|
||||||
Net income (loss) per share:
|
||||||||
Basic
|
$
|
(0.00
|
)
|
$
|
0.02
|
|||
Diluted
|
$
|
(0.00
|
)
|
$
|
0.02
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A. |
CONTROLS AND PROCEDURES.
|
ITEM 9B.
|
OTHER INFORMATION.
|
ITEM 9C.
|
COVID-19.
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
Name
|
Age
|
Principal Occupation/Position
Held with Company
|
Officer or
Director
Since
|
Jerome S. Flum
|
80
|
Chairman of the Board/Chief Executive Officer
|
1983
|
Michael I. Flum
|
34
|
President/Chief Operating Officer
|
2019
|
Steven Gargano
|
44
|
Senior Vice President/Chief Financial Officer
|
2020
|
Andrew J. Melnick
|
79
|
Director
|
2005
|
Richard Lippe
|
82
|
Director
|
2020
|
Joshua M. Flum
|
51
|
Director
|
2007
|
|
• |
Appoint, evaluate, compensate, oversee the work of, and if appropriate terminate, the independent auditor, who shall report directly to the Committee.
|
|
• |
Approve in advance all audit engagement fees and terms of engagement as well as all audit and non-audit services to be provided by the independent auditor.
|
|
• |
Engage independent counsel and other advisors, as it deems necessary to carry out its duties.
|
ITEM 11. |
EXECUTIVE COMPENSATION.
|
SUMMARY COMPENSATION TABLE
|
|||||||||||||||||||||||||
Name and Principal
Position
|
Year
|
Salary
|
Bonus (1)
|
Option Awards (2)
|
All Other
Compensation
|
Total
|
|||||||||||||||||||
Jerome S. Flum, Chairman and Chief Executive Officer
|
2020
2019
|
$
$ |
157,292
188,640
|
$
$
|
0
4,400
|
$
$
|
1,200
51
|
$
$
|
-0-
-0-
|
$
$
|
158,492
193,091
|
||||||||||||||
Michael I. Flum, President (3)
|
2020
2019
|
$
$
|
172,765
147,700
|
$
$
|
7,250
28,880
|
$
$
|
3,235
799
|
$
$
|
-0-
-0-
|
$
$
|
183,250
177,379
|
||||||||||||||
Lawrence Fensterstock, Senior Vice President (4)
|
2020
2019
|
$
$
|
141,146
188,640
|
$
$
|
15,000
44,080
|
$
$
|
0
1,461
|
$
$
|
-0-
-0-
|
$
$
|
156,146
234,181
|
||||||||||||||
Steven Gargano, Senior Vice President (5)
|
2020
|
$
|
166,385
|
$
|
37,000
|
$
|
898
|
$
|
-0-
|
$
|
204,283
|
||||||||||||||
Jonathan L. Levy, Senior Vice President (6)
|
2020
2019
|
$
$
|
199,152
66,667
|
$
$
|
0
11,830
|
$
$
|
0
72
|
$
$
|
-0-
-0-
|
$
$
|
199,152
78,569
|
GRANTS OF PLAN-BASED AWARDS
|
|||||||||||||||||||||
Equity Grants
|
|||||||||||||||||||||
Name
|
Grant Date
|
All Other Stock
Awards:
Number of
Shares of Stock
or Units (#)
|
All Other
Option Awards:
Number of
Securities
Underlying
Options (#)
|
Exercise or Base
Price of Option
Awards ($/Sh)
|
Grant Date Fair
Value of Stock
and Option
Awards
|
||||||||||||||||
Michael I. Flum
|
10-29-20
|
N/A
|
25,000
|
$
|
2.19
|
$
|
54,750
|
||||||||||||||
Steven Gargano
|
7-29-20
|
N/A
|
12,000
|
$
|
1.80
|
$
|
21,600
|
||||||||||||||
Steven Gargano
|
10-29-20
|
N/A
|
3,000
|
$
|
2.19
|
$
|
6,570
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Un-exercisable
|
Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) |
Option Exercise
Price
($)
|
Option
Expiration Date
|
|||||||||||||||
Jerome S. Flum
|
1,000
|
4,000
|
-0-
|
$
|
3.19
|
01-05-21
|
||||||||||||||
Michael I. Flum
|
-0-
-0-
|
50,000
25,000
|
-0-
-0-
|
$
$
|
1.45
2.19
|
10-24-29
10-29-29
|
||||||||||||||
Steven Gargano
|
-0-
-0-
|
12,000
3,000
|
-0-
-0-
|
$
$
|
1.80
2.19
|
07-29-29
10-29-29
|
DIRECTOR COMPENSATION
|
||||||||||||
Name
|
Fees Earned or
Paid in Cash
|
Option
Awards(1)
|
Total
|
|||||||||
Andrew J. Melnick
|
$
|
4,000
|
$
|
1,852
|
$
|
5,852
|
||||||
Jeffrey S. Geisenheimer(2)
|
$
|
1,000
|
$
|
0
|
$
|
1,000
|
||||||
Joshua M. Flum
|
$
|
4,000
|
$
|
6,076
|
$
|
10,076
|
||||||
Richard Lippe (3)
|
$
|
2,000
|
$
|
326
|
$
|
2,326
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Name of
Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of
Class
|
5% or Greater Stockholders
|
||
Santa Monica Partners, L.P.
SMP Asset Management, LLC
Lawrence J. Goldstein(1)
1865 Palmer Avenue
Larchmont, NY 10538
|
693,744
|
6.47%
|
Tabatabai Investment Management LLC
Tabatabai Investment Partners LP
Alex Tabatabai(2)
540 N Dearborn Street, #101257
Chicago, IL 60610
|
727,430
|
6.72%
|
Flum Partners (3)
|
5,641,134
|
52.08%
|
Named Executive Officers
|
||
Jerome S. Flum
|
6,239,776 (4)(5)
|
57.61%
|
Michael I. Flum
|
6,500
|
-----*
|
Non-Employee Directors
|
||
Andrew J. Melnick (6)
|
63,070
|
-----*
|
Richard Lippe
|
49,903
|
-----*
|
Joshua M. Flum (7)
|
13,800
|
-----*
|
All directors and executive officers
(as a group (5 persons))
|
6,373,049 (4)(5)
|
59.30%
|
Plan category
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
Weighted average
exercise price of
outstanding
options, warrants
and rights
|
Number of
securities
remaining available
for
future issuance
under
equity
compensation
plans
(excluding
securities reflected
in
first column)
|
|||||||||
Equity compensation plans
approved by stockholders
|
575,750
|
$
|
2.17
|
817,900
|
||||||||
Total
|
575,750
|
$
|
2.17
|
817,900
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES.
|
Fiscal Year Ended
December 31,
|
||||||||
2020
|
2019
|
|||||||
Audit fees (1)
|
$
|
106,250
|
$
|
103,250
|
||||
Audit related fees (2)
|
7,500
|
-
|
||||||
Tax fees (3)
|
12,800
|
|
12,600
|
|||||
All other fees
|
-
|
-
|
||||||
Total fees
|
$
|
126,550
|
$
|
115,850
|
(1) |
Consists of fees for services provided in connection with the audit of the Company’s financial statements and review of the Company’s quarterly financial statements.
|
(2) |
Consists of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit fees.”
|
(3) |
Consists of fees for preparation of federal and state income tax returns.
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
(a)
|
Financial Statements – contained in Item 8:
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
17
|
Balance Sheets - December 31, 2020 and 2019
|
18
|
Statements of Operations - Years Ended December 31, 2020 and 2019
|
19 |
Statements of Stockholders’ Equity - Years Ended December 31, 2020 and 2019
|
20
|
Statements of Cash Flows - Years Ended December 31, 2020 and 2019
|
21
|
Notes to Financial Statements
|
22
|
(b)
|
Exhibits:
|
-
|
Copy of the Company’s Amended and Restated Articles of Incorporation dated as of May 7, 1999 (incorporated by reference to Form 10-KSB for the year ended December 31, 1999, filed March
29, 2000)
|
||
-
|
Company’s By-Laws as amended March 9, 2020
|
||
-
|
Copy of Company’s 2009 Long-Term Incentive Plan (incorporated by reference to Definitive Statement on Schedule 14C, filed October 22, 2010)
|
||
-
|
Copy of Company’s 2020 Long-Term Incentive Plan
|
||
-
|
CreditRiskMonitor.com, Inc. Code of Ethics for Principal Executive Officer and Senior Financial Officers (incorporated by reference to Form 10-KSB for the year ended December 31, 2003, filed March 30, 2004)
|
||
-
|
Consent of Independent Registered Public Accounting Firm
|
||
-
|
Certification of Chief Executive Officer
|
||
-
|
Certification of Chief Financial Officer
|
||
-
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
-
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101.INS
|
-
|
XBRL Instance Document
|
|
101.SCH
|
-
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
-
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
-
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
-
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
-
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
Filed herewith.
|
Date: March 25, 2021
|
By:
|
/s/ Jerome S. Flum
|
Jerome S. Flum
|
||
Chairman of the Board and
|
||
Chief Executive Officer
|
Date: March 25, 2021
|
By:
|
/s/ Jerome S. Flum
|
Jerome S. Flum
|
||
Chairman of the Board and
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date: March 25, 2021
|
By:
|
/s/ Steven Gargano
|
Steven Gargano
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|
||
Date: March 25, 2021
|
By:
|
/s/ Andrew J. Melnick
|
Andrew J. Melnick
|
||
Director
|
||
Date: March 25, 2021
|
By:
|
/s/ Richard Lippe
|
Richard Lippe
|
||
Director
|
||
Date: March 25, 2021
|
By:
|
/s/ Joshua M. Flum
|
Joshua M. Flum
|
||
Director
|
1 Year Credit Risk Monitor Com (QX) Chart |
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