form10-q.htm


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

FORM 10-Q

(Mark One)
x  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2009

o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
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)    (Zip Code)
     

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 x   No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). 
Yes o   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
                   Large accelerated filer       Accelerated filer o
                   Non-accelerated filer o   Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
 
Yes o   No x
 
APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date:
 
Common stock $.01 par value -- 7,849,462 shares outstanding as of August 7, 2009.
 
 


 
 


CREDITRISKMONITOR.COM, INC.
INDEX

   
 
Page
   
PART I. FINANCIAL INFORMATION
 
   
Item 1. Financial Statements
 
   
2
   
3
   
4
   
5
   
   
9
   
   
PART II. OTHER INFORMATION
 
   
   
   
EXHIBITS
 
   
   
17
   
18
   
19


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CREDITRISKMONITOR.COM, INC.
BALANCE SHEETS
JUNE 30, 2009 AND DECEMBER 31, 2008


   
June 30,
   
Dec. 31,
 
   
2009
   
2008
 
   
(Unaudited)
   
(Note 1)
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
   $ 4,741,583      $ 912,591  
Marketable securities
          2,958,996  
Accounts receivable, net of allowance
    881,222       1,146,066  
Other current assets
    160,339       237,883  
                 
Total current assets
    5,783,144       5,255,536  
                 
Property and equipment, net
    245,110       213,142  
Goodwill
    1,954,460       1,954,460  
Prepaid and other assets
    36,057       28,109  
                 
Total assets
   $ 8,018,771      $ 7,451,247  
                 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Deferred revenue
   $ 5,046,658      $ 4,394,803  
Accounts payable
    26,625       52,758  
Accrued expenses
    509,108       610,748  
                 
Total current liabilities
    5,582,391       5,058,309  
                 
Other liabilities
    489       3,424  
                 
Total liabilities
    5,582,880       5,061,733  
                 
Stockholders’ equity:
               
Preferred stock, $.01 par value; authorized
               
5,000,000 shares; none issued
           
Common stock, $.01 par value; authorized 25,000,000
               
shares; issued and outstanding 7,849,462 shares
    78,494       78,494  
Additional paid-in capital
    28,306,217       28,279,268  
Accumulated deficit
    (25,948,820 )     (25,968,248 )
                 
Total stockholders’ equity
    2,435,891       2,389,514  
                 
Total liabilities and stockholders’ equity
   $ 8,018,771      $ 7,451,247  
                 
 
See accompanying condensed notes to financial statements.

 
2


CREDITRISKMONITOR.COM, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008
(Unaudited)

   
2009
   
2008
 
             
Operating revenues
   $ 1,922,437      $ 1,404,450  
                 
Operating expenses:
               
Data and product costs
    565,056       447,743  
Selling, general and administrative expenses
    1,304,604       921,497  
Depreciation and amortization
    25,337       20,471  
                 
Total operating expenses
    1,894,997       1,389,711  
                 
Income from operations
    27,440       14,739  
Other income (expense)
    (12,199 )     8,738   
Interest expense
    (7 )       (2,528
                 
Income before income taxes
    15,234       20,949  
Provision for income taxes
    1,030       467  
                 
Net income
  $ 14,204      $ 20,482  
                 
Net income per share of common stock:
               
                 
Basic
  $ 0.00      $ 0.00  
Diluted
  $ 0.00      $ 0.00  
                 
Weighted average number of common shares
               
outstanding:
               
                 
Basic
    7,849,462       7,694,473  
Diluted
    8,089,622       8,058,513  
                 
 
See accompanying condensed notes to financial statements.

 
3


CREDITRISKMONITOR.COM, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(Unaudited)

      2009       2008  
                 
Operating revenues
   $ 3,665,563      $ 2,769,640  
                 
Operating expenses:
               
Data and product costs
    1,065,498       878,971  
Selling, general and administrative expenses
    2,539,495       1,813,743  
Depreciation and amortization
    48,992       38,010  
                 
Total operating expenses
    3,653,985       2,730,724  
                 
Income from operations
    11,578       38,916  
Other income
    10,350       33,464  
Interest expense
    (7 )     (9,773 )
                 
Income before income taxes
    21,921       62,607  
Provision for income taxes
    2,493       2,357  
                 
Net income
   $ 19,428      $ 60,250   
                 
Net income per share of common stock:
               
                 
Basic
   $ 0.00       $0.01  
Diluted
   $ 0.00       $0.01  
                 
Weighted average number of common shares
               
outstanding:
               
                 
Basic
    7,849,462       7,694,467  
Diluted
    8,006,626       8,086,241  
                 
                 
 
See accompanying condensed notes to financial statements.

 
4


CREDITRISKMONITOR.COM, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(Unaudited)

             
   
2009
   
2008
 
             
Cash flows from operating activities:
           
Net income
   $ 19,428      $ 60,250  
Adjustments to reconcile net income to net
               
cash provided by operating activities:
               
Depreciation and amortization
    48,992       38,010  
Deferred rent
    (2,935 )     (1,424 )
Stock-based compensation
    26,949       26,948  
Realized loss on marketable securities
    28,224       -  
Changes in operating assets and liabilities:
               
Accounts receivable
    264,844       46,119  
Other current assets
    77,544       108,483  
Prepaid and other assets
    (7,948 )     (6,273 )
Deferred revenue
    651,855       398,312  
Accounts payable
    (26,133 )     9,470  
Accrued expenses
    (101,640 )     (15,143 )
Other liabilities
    -       (58,890 )
                 
Net cash provided by operating activities
    979,180       605,862  
                 
Cash flows from investing activities:
               
Purchase of marketable securities
    (433,761 )     -  
Sale of marketable securities
    3,364,533       -  
Purchase of property and equipment
    (80,960 )     (60,573 )
                 
Net cash provided by (used in) investing activities
    2,849,812       (60,573 )
                 
Cash flows from financing activities:
               
Proceeds from exercise of stock options
    -       5,000  
Payments on long-term debt
    -       (286,940 )
                 
Net cash used in financing activities
    -       (281,940 )
                 
Net increase in cash and cash equivalents
    3,828,992       263,349  
Cash and cash equivalents at beginning of period
    912,591       2,973,263  
                 
Cash and cash equivalents at end of period
   $ 4,741,583      $ 3,236,612  
                 
 
See accompanying condensed notes to financial statements.

 
5


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 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, 2008.

The results of operations for the three and six months ended June 30, 2009 are not necessarily indicative of the results of a full fiscal year.

The December 31, 2008 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, 2008 included in the Company’s Annual Report on Form 10-K.

In May 2009, the Financial Accounting Standards Board issued Financial Accounting Standards (“SFAS”) No. 165, “Subsequent Events” (“SFAS 165”). This standard is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this standard sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for fiscal years and interim periods ended after June 15, 2009. We adopted this standard effective June 15, 2009 and have evaluated any subsequent events through the date of this filing. We do not believe there are any material subsequent events which would require further disclosure.

(2) Stock-Based Compensation

The Company applies SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”) to account for stock-based compensation.
 
 
6

 
 
The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations in accordance with SFAS 123R for the three and six months ended June 30:
 
 
    3 Months Ended     6 Months Ended  
    June 30,     June 30,  
    2009     2008     2009     2008  
                         
 Data and product costs     $ 1,952      $ 1,952      $ 3,905      $ 3,905  
Selling, general and administrative expenses
    11,522       11,522       23,044       23,043  
                                 
     $ 13,474      $ 13,474      $ 26,949      $ 26,948  
 
(3) Other Recently Issued Accounting Standards

The Financial Accounting Standards Board and the SEC had issued certain accounting pronouncements as of June 30, 2009 that will become effective in subsequent periods; however, management does not believe that any of those pronouncements would have significantly affected our 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 our future financial position or results of operations.

(4) Fair Value Measurements

The Company records its financial instruments that are accounted for under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” at fair value. The determination of fair value is based upon the fair value framework established by SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides that a fair value measurement 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. These instruments include money market securities.
 
 
7

 

The table below sets forth the Company’s cash and cash equivalents as of June 30, 2009, which are measured at fair value on a recurring basis by level within the fair value hierarchy.
 
    Level 1     Level 2     Level 3     Total fair
value
 
                         
Cash and cash equivalents    $ 4,741,583      $ -      $ -      $ 4,741,583  
                                 
 Total     $ 4,741,583      $ -      $ -      $ 4,741,583  

The Company did not hold financial assets and liabilities which were recorded at fair value in the Level 2 or 3 categories as of June 30, 2009.
 
Effective January 1, 2009, the Company fully adopted the provisions of SFAS 157 by adopting the provisions relating to its nonfinancial assets and liabilities. The Company adopted the provisions relating to financial assets and liabilities in the prior year and its adoption of SFAS 157 relating to nonfinancial assets and liabilities did not have a material impact on its financial position or results of operations.
 
(5) Net Income Per Share

Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares outstanding and the dilutive effect of outstanding stock options:
 
   
3 Months Ended
June 30,
   
6 Months Ended
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
Weighted average shares outstanding – basic
    7,849,462       7,694,473       7,849,462       7,694,467  
Potential shares exercisable  under stock option plans
    527,500       677,500       483,000       707,500  
LESS: Shares which could be repurchased under treasury  stock method
    (287,340 )     (313,460 )     (325,836 )     (315,726 )
Weighted average shares outstanding – diluted
    8,089,622       8,058,513       8,006,626       8,086,241  
 
The diluted earnings per share calculation for the three and six months ended June 30, 2009 and for the three months ended June 30, 2008 excluded 55,000, 99,500 and 55,000 shares, respectively, related to stock options as the exercise price of these options was greater than the average market price of the underlying securities, which would result in an anti-dilutive effect on diluted earnings per share.

 
8


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 weakening 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. To the contrary, monthly bookings of new business subscriptions for first half of 2009 were the highest in the Company’s history, supporting our belief that the need for credit information is non-cyclical (see discussion on “Non-cyclical” found on page 5 of our 2008 Form 10-K).

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

 
The following table presents selected financial information and statistics as of June 30, 2009 and December 31, 2008 (dollars in thousands):
 
 
    June 30,     December 31,  
    2009     2008  
 Cash, cash equivalents, and marketable securities    $ 4,742      $ 3,872  
 Accounts receivable, net     $ 881      $ 1,146  
 Working capital     $ 201      $ 197  
 Cash ratio     0.85       0.77  
 Quick ratio     1.01       0.99  
 Current ratio     1.04       1.04  

The Company has invested most of its excess cash in debt instruments of the United States Government. All highly liquid investments with an original maturity of three months or less are considered cash equivalents, while those with maturities in excess of three months are reflected as marketable securities.

As of June 30, 2009, the Company had $4.74 million in cash, cash equivalents, and marketable securities, an increase of $870,000 from December 31, 2008, and an increase of $1.51 million from the cash and cash equivalents balance reported at June 30, 2008. The principal component of this net increase for the last six months was the cash generated by operating activities of $979,000.

The Company’s cash generated by operating activities significantly exceeded its net income due primarily to the increase in deferred revenue. Additionally, the main component of current liabilities at June 30, 2009 is deferred revenue of $5.05 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 deferred revenue shown. The deferred 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 will be sufficient resources to meet its working capital and capital expenditure needs for the foreseeable future.
 
 
9

 
OFF-BALANCE SHEET ARRANGEMENTS

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

RESULTS OF OPERATIONS

                      3 Months Ended June 30,  
     2009      2008  
           % of Total             % of Total  
           Operating            Operating  
     Amount      Revenues      Amount      Revenues  
                         
Operating revenues
   $ 1,922,437       100.00 %    $ 1,404,450       100.00 %
                                 
Operating expenses:
                               
Data and product costs
    565,056       29.39 %     447,743       31.88 %
Selling, general and administrative expenses
    1,304,604       67.86 %     921,497       65.61 %
Depreciation and amortization
    25,337       1.32 %     20,471       1.46 %
Total operating expenses
    1,894,997       98.57 %     1,389,711       98.95 %
                                 
Income from operations
    27,440       1.43 %     14,739       1.05 %
Other income (expense)
    (12,199 )     (0.64 %)     8,738       0.62 %
Interest expense
    (7 )     0.00 %     (2,528 )     (0.18 %)
                                 
Income before income taxes
    15,234       0.79 %     20,949       1.49 %
Provision for income taxes
    1,030       0.05 %     467       0.03 %
                                 
Net income
   $ 14,204       0.74 %    $ 20,482       1.46 %

Operating revenues increased 37% for the three months ended June 30, 2009. This increase was primarily due to an increase in the number of subscribers and increased revenue from existing subscribers to the Company’s Internet subscription service as the market became more aware of the Company’s enhanced service, offset in part by a decrease in the number of subscribers to the Company’s third-party international credit report subscription service.

Data and product costs increased 26% for the second quarter of 2009 compared to the same period of fiscal 2008. This increase was primarily due to higher consulting fees, higher salary and related employee benefits, including the hiring of an additional senior programmer, and the higher cost of third-party content due to the addition of new sources.

Selling, general and administrative expenses increased 42% for the second quarter of fiscal 2009 compared to the same period of fiscal 2008. This increase was primarily due to higher marketing expenses and higher salary and related employee benefit costs, resulting from an increase in commission expense and in the Company’s sales force during the past 12 months. The commissions increase is related to (i) new sales bookings increasing at a much faster rate than the reported increase in operating revenue for this year’s second quarter versus for last year’s second quarter, and (ii) a higher commission rate on new sales under a new commission plan implemented at the beginning of the second quarter of 2008. The Company records the full commission expense at the beginning of new or renewal contracts but reflects operating revenue ratably over the term of the contract.

Depreciation and amortization increased 24% for the second quarter of fiscal 2009 compared to the same period of fiscal 2008. This increase is due to a higher depreciable asset base reflecting the replacement of computer equipment that had been in operation past its depreciable life.
 
 
10

 
Other income decreased 240% for second quarter of fiscal 2009 compared to the same period last year. This decrease was due to a negative mark-to-market adjustment for marketable securities owned during the quarter and a decrease in interest rates.

Interest expense decreased 100% for the second quarter of fiscal 2009 compared to the same period of fiscal 2008 due to the Company prepaying its long-term debt in April 2008.
 
   
Six Months Ended June 30,
 
   
                2009
     2008  
           % of Total           % of Total  
         
Operating
          Operating  
     Amount    
Revenues
     Amount    
Revenues
 
                         
                         
Operating revenues
   $ 3,665,563       100.00 %    $ 2,769,640       100.00 %
                                 
Operating expenses:
                               
Data and product costs
    1,065,498       29.07 %     878,971       31.73 %
Selling, general and administrative expenses
    2,539,495       69.28 %     1,813,743       65.49 %
Depreciation and amortization
    48,992       1.33 %     38,010       1.37 %
Total operating expenses
    3,653,985       99.68 %     2,730,724       98.59 %
                                 
Income from operations
    11,578       0.32 %     38,916       1.41 %
Other income
    10,350       0.28 %     33,464       1.21 %
Interest expense
    (7 )     (0.00 %)     (9,773 )     (0.35 %)
                                 
Income before income taxes
    21,921       0.60 %     62,607       2.27 %
Provision for income taxes
    2,493       0.07 %     2,357       0.09 %
                                 
Net income
   $ 19,428       0.53 %    $ 60,250       2.18 %
 
Operating revenues increased 32% for the six months ended June 30, 2009 versus the first six months of 2008. This increase was primarily due to an increase in the number of subscribers and increased revenue from existing subscribers to the Company’s Internet subscription service as the market became more aware of the Company’s enhanced service, offset in part by a decrease in the number of subscribers to the Company’s third-party international credit report subscription service.

Data and product costs increased 21% for the first six months of fiscal 2009 compared to the same period of fiscal 2008. This increase was primarily due to higher salary and related employee benefits, including the hiring of an additional senior programmer, higher consulting fees as well as the cost of new third-party content added to the Company’s website.

Selling, general and administrative expenses increased 40% for the first six months of fiscal 2009 compared to the same period of fiscal 2008. This increase was primarily due to higher marketing expenses and higher salary and related employee benefit costs, resulting from an increase in commission expense and in the Company’s sales force during the past 12 months. The commissions increase is related to (i) new sales bookings increasing at a much faster rate than the reported increase in operating revenue for this year’s year-to-date period versus for last year’s year-to-date period, and (ii) a higher commission rate on new sales under a new commission plan implemented at the beginning of the second quarter of 2008. The Company records the full commission expense at the beginning of new or renewal contracts but reflects operating revenue ratably over the term of the contract.
 
 
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Depreciation and amortization increased by 29% for the first six months of fiscal 2009 compared to the same period of fiscal 2008. This increase is due to a higher depreciable asset base reflecting the replacement of computer equipment that had been in operation past its depreciable life.

Other income decreased 69% for the first six months of fiscal 2009 compared to the same period last year. This decrease was due to a negative mark-to-market adjustment for marketable securities owned during the period and a decrease in interest rates.

Interest expense decreased 100% for the first six months of fiscal 2009 compared to the same period of fiscal 2008. This decrease was primarily due to the Company prepaying its long-term debt in April 2008.

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.

Due to 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, invest in product development, operating infrastructure, marketing and promotion. 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 significant 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 level of use of the Internet and online services and increasing acceptance of the Internet and other online services for the purchase of products such as those offered by the Company, (vi) the Company’s ability to upgrade and develop its systems and infrastructure, (vii) the Company’s ability to attract new personnel in a timely and effective manner, (viii) the level of traffic on the Company’s website, (ix) the Company’s ability to manage effectively its development of new business segments and markets, (x) the Company’s ability to successfully manage the integration of operations and technology of acquisitions or other business combinations, (xi) technical difficulties, system downtime or Internet brownouts, (xii) the amount and timing of operating costs and capital expenditures relating to expansion of the Company’s business, operations and infrastructure, (xiii) governmental regulation and taxation policies, (xiv) disruptions in service by common carriers due to strikes or otherwise, (xv) risks of fire or other casualty, (xvi) litigation costs or other unanticipated expenses, (xvii) interest rate risks and inflationary pressures, and (xviii) general economic conditions and economic conditions specific to the Internet and online commerce.
 
 
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Due to the foregoing factors and the Company’s limited forecasting abilities, the Company believes that period-to-period comparisons of its revenues and operating results are not necessarily meaningful and should not be relied on as an indication of future performance.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q may contain forward-looking statements, including statements regarding future prospects, industry trends, competitive conditions and litigation issues. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes”, “expects”, “anticipates”, “plans” or words of similar meaning are intended to identify forward-looking statements. This notice is intended to take advantage of the “safe harbor” provided by the Private Securities Litigation Reform Act of 1995 with respect to such forward-looking statements. These forward-looking statements involve a number of risks and uncertainties. Among others, factors that could cause actual results to differ materially from the Company’s beliefs or expectations are those listed under “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.


Item 4T. 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 our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
 
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PART II. OTHER INFORMATION

Item 6. Exhibits

 
 
 
 


 
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SIGNATURES


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

 

 
                                               CREDITRISKMONITOR.COM, INC.
                                                 (REGISTRANT)
     
 Date: August 7, 2009                                                                                                By: /s/ Lawrence Fensterstock
          Lawrence Fensterstock
          Chief Financial Officer
 
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