form10q.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2011
or
 
o 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)   (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 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 þ    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 þ    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.
 
Large accelerated filer o Accelerated filer o
Non-accelerated filer o Smaller reporting company þ
 
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
Yes o    No þ
 
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 -- 7,914,462 shares outstanding as of November 2, 2011.
 


 
 

 
 
 
CREDITRISKMONITOR.COM, INC.
INDEX
 
  Page
   
PART I. FINANCIAL INFORMATION
 
   
 
   
2
   
3
   
4
   
5
   
6
   
8
   
12
   
PART II. OTHER INFORMATION
 
   
12
   
13
 
 
1

 
PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
CREDITRISKMONITOR.COM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2011 AND DECEMBER 31, 2010
 
   
September 30,
   
December31,
 
   
2011
   
2010
 
   
(Unaudited)
   
(Note 1)
 
             
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 6,162,612     $ 5,642,568  
Marketable securities
    1,765,874       1,204,234  
Accounts receivable, net of allowance
    1,224,953       1,406,865  
Other current assets
    322,387       480,922  
                 
Total current assets
    9,475,826       8,734,589  
                 
Property and equipment, net
    321,448       364,360  
Goodwill
    1,954,460       1,954,460  
Deferred taxes on income
    --       233,873  
Prepaid and other assets
    39,187       23,225  
                 
Total assets
  $ 11,790,921     $ 11,310,507  
                 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Deferred revenue
  $ 6,476,571     $ 5,997,862  
Accounts payable
    66,252       24,024  
Accrued expenses
    824,565       1,167,196  
Accrued income taxes
    12,096       --  
                 
Total current liabilities
    7,379,484       7,189,082  
                 
Other liabilities
    3,140       1,149  
                 
Total liabilities
    7,382,624       7,190,231  
                 
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 7,914,462 and 7,899,462 shares, respectively
    79,144       78,994  
Additional paid-in capital
    28,556,242       28,440,586  
Accumulated deficit
    (24,227,089 )     (24,399,304 )
                 
Total stockholders’ equity
    4,408,297       4,120,276  
                 
Total liabilities and stockholders’ equity
  $ 11,790,921     $ 11,310,507  
 
See accompanying condensed notes to financial statements.
 
 
2

 
CREDITRISKMONITOR.COM, INC.
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(Unaudited)
 
   
2011
   
2010
 
             
Operating revenues
  $ 2,580,339     $ 2,389,932  
                 
Operating expenses:
               
Data and product costs
    716,226       580,184  
Selling, general and administrative expenses
    1,572,311       1,223,686  
Depreciation and amortization
    42,753       35,345  
                 
Total operating expenses
    2,331,290       1,839,215  
                 
Income from operations
    249,049       550,717  
Other income, net
    52,096       39,570  
                 
Income before income taxes
    301,145       590,287  
Provision for income taxes
    (72,260 )     (236,870 )
                 
Net income
  $ 228,885     $ 353,417  
                 
Net income per share of common stock:
               
                 
Basic
  $ 0.03     $ 0.04  
Diluted
  $ 0.03     $ 0.04  
                 
Weighted average number of common shares outstanding:
               
                 
Basic
    7,914,462       7,889,462  
Diluted
    8,295,097       8,277,216  
 
See accompanying condensed notes to financial statements.
 
 
3

 
CREDITRISKMONITOR.COM, INC.
STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(Unaudited)
 
   
2011
   
2010
 
             
Operating revenues
  $ 7,559,650     $ 6,906,507  
                 
Operating expenses:
               
Data and product costs
    2,196,463       1,751,224  
Selling, general and administrative expenses
    4,502,063       3,844,920  
Depreciation and amortization
    125,482       94,600  
                 
Total operating expenses
    6,824,008       5,690,744  
                 
Income from operations
    735,642       1,215,763  
Other income, net
    87,015       54,161  
                 
Income before income taxes
    822,657       1,269,924  
Provision for income taxes
    (254,711 )     (513,612 )
                 
Net income
  $ 567,946     $ 756,312  
                 
Net income per share of common stock:
               
                 
Basic
  $ 0.07     $ 0.10  
Diluted
  $ 0.07     $ 0.09  
                 
Weighted average number of common shares outstanding:
               
                 
Basic
    7,904,851       7,896,236  
Diluted
    8,334,258       8,287,177  
 
See accompanying condensed notes to financial statements.
 
 
4

 
CREDITRISKMONITOR.COM, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(Unaudited)
 
   
2011
   
2010
 
             
Cash flows from operating activities:
           
Net income
  $ 567,946     $ 756,312  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    125,482       94,600  
Deferred income taxes
    245,969       507,462  
Deferred rent
    1,991       459  
Stock-based compensation
    100,806       38,397  
Unrealized gain on marketable securities
    (48,929 )     (37,451 )
Changes in operating assets and liabilities:
               
Accounts receivable
    181,912       292,559  
Other current assets
    158,535       13,740  
Prepaid and other assets
    (15,962 )     (11,219 )
Deferred revenue
    478,709       438,540  
Accounts payable
    42,228       31,056  
Accrued expenses
    (342,632 )     (102,584 )
                 
Net cash provided by operating activities
    1,496,055       2,021,871  
                 
Cash flows from investing activities:
               
Purchase of marketable securities
    (512,711 )     (1,222,439 )
Purchase of property and equipment
    (82,570 )     (143,653 )
                 
Net cash used in investing activities
    (595,281 )     (1,366,092 )
                 
Cash flows from financing activities:
               
Dividends paid to shareholders
    (395,730 )     (394,980 )
Proceeds from exercise of stock options
    15,000       50,000  
                 
Net cash used in financing activities
    (380,730 )     (344,980 )
                 
Net increase in cash and cash equivalents
    520,044       310,799  
Cash and cash equivalents at beginning of period
    5,642,568       4,679,466  
                 
Cash and cash equivalents at end of period
  $ 6,162,612     $ 4,990,265  
 
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 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, 2010.
 
The results of operations for the three and nine months ended September 30, 2011 are not necessarily indicative of the results of a full fiscal year.
 
The December 31, 2010 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, 2010 included in the Company’s Annual Report on Form 10-K.
 
(2) 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 in accordance with ASC 718 for the three and nine months ended September 30:
 
   
3 Months Ended
   
9 Months Ended
 
   
September 30,
    September 30,  
   
2011
   
2010
   
2011
   
2010
 
                         
Data and product costs $ 5,437   $ 1,370   $ 13,608   $ 4,356  
Selling, general and administrative expenses   29,356     11,347     87,198     34,041  
                         
  $ 34,793   $ 12,717   $ 100,806   $ 38,397  
 
(3) Other Recently Issued Accounting Standards
 
The Financial Accounting Standards Board and the SEC had issued certain accounting pronouncements as of September 30, 2011 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.
 
 
6

 
(4) Fair Value Measurements
 
The Company records its financial instruments that are accounted for under ASC 320, “Investments-Debt and Equity Securities” at fair value. The determination of fair value is based upon the fair value framework established by ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 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, cash equivalents and marketable securities 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 and marketable securities are generally classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Marketable securities include U.S. government bonds.
 
The table below sets forth the Company’s cash and cash equivalents and marketable securities as of September 30, 2011 and December 31, 2010, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.
 
     September 30, 2011     December 31, 2010   
   
Level 1
   
Level 2
   
Level 3
   
Total
   
Total
 
                               
Cash and cash equivalents
  $ 6,162,612     $ -     $ -     $ 6,162,612     $ 5,642,568  
Marketable securities
    1,765,874       -       -       1,765,874       1,204,234  
                                         
Total
  $ 7,928,486     $ -     $ -     $ 7,928,486     $ 6,846,802  
 
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, 2011 or December 31, 2010.
 
(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
    9 Months Ended  
   
September 30,
    September 30,  
   
2011
   
2010
   
2011
   
2010
 
                         
Weighted average number of common shares outstanding – basic
    7,914,462       7,899,462       7,904,851       7,896,236  
Potential shares exercisable under stock option plans
    497,500       532,500       567,500       549,167  
LESS: Shares which could be repurchased under treasury stock method
    (116,865 )     (154,746 )     (138,093 )     (158,226 )
                                 
Weighted average number of common shares outstanding – diluted
    8,295,097       8,277,216       8,334,258       8,287,177  
 
 
7

 
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.
 
Our strategic priorities and plans for 2011 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 2011.
 
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
 
The following table presents selected financial information and statistics as of September 30, 2011 and December 31, 2010 (dollars in thousands):
 
   
Sept. 30,
   
Dec. 31,
 
   
2011
   
2010
 
Cash, cash equivalents and marketable securities
  $ 7,928     $ 6,847  
Accounts receivable, net
  $ 1,225     $ 1,407  
Working capital
  $ 2,096     $ 1,546  
Cash ratio
    1.07       0.95  
Quick ratio
    1.24       1.15  
Current ratio
    1.28       1.21  
 
The Company has invested some 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 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, 2011, the Company had $7.93 million in cash, cash equivalents and marketable securities, an increase of approximately $1.08 million from December 31, 2010. The principal component of this net increase for the last nine months was the cash generated by operating activities of approximately $1.50 million.
 
Additionally, the main component of current liabilities at September 30, 2011 is deferred revenue of $6.48 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, cash equivalents, marketable securities 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 the last 5 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.
 
OFF-BALANCE SHEET ARRANGEMENTS
 
The Company is not a party to any off-balance sheet arrangements.
 
 
8

 
RESULTS OF OPERATIONS
 
   
3 Months Ended September 30,
 
   
2011
    2010  
          % of Total          
% of Total
 
         
Operating
          Operating  
   
Amount
   
Revenues
   
Amount
   
Revenues
 
                         
Operating revenues
  $ 2,580,339       100.00 %   $ 2,389,932       100.00 %
                                 
Operating expenses:
                               
Data and product costs
    716,226       27.76 %     580,184       24.28 %
Selling, general and administrative expenses
    1,572,311       60.93 %     1,223,686       51.20 %
Depreciation and amortization
    42,753       1.66 %     35,345       1.48 %
Total operating expenses
    2,331,290       90.35 %     1,839,215       76.96 %
                                 
Income from operations
    249,049       9.65 %     550,717       23.04 %
Other income, net
    52,096       2.02 %     39,570       1.66 %
                                 
Income before income taxes
    301,145       11.67 %     590,287       24.70 %
Provision for income taxes
    (72,260 )     (2.80 %)     (236,870 )     (9.91 %)
                                 
Net income
  $ 228,885       8.87 %   $ 353,417       14.79 %
 
Operating revenues increased $190,407, or 8%, for the three months ended September 30, 2011 compared to the third quarter of fiscal 2010. This overall revenue growth resulted from a $220,274, or 9%, increase in Internet subscription service revenue, attributable to increased sales to new and existing subscribers, as well as a $29,867, or 44%, decrease in the Company’s third-party international credit report subscription service, attributable to lower usage by subscribers. The widespread concerns of our subscribers and potential subscribers about corporate credit risk, driven by the Great Recession, gradually diminished during 2010. Their concerns about cost control have continued. It became apparent to the Company that our growth was slowing during 2010. So, in the third quarter of 2010 the Company reorganized its sales department and began to change its sales process to adapt to this new environment. The new selling method is more consistent with reduced “impulse” buying and also with the Company’s prospective new clients’ increased focus on cost control. The Company is seeing early signs that these changes in its sales process will be successful, over the long term, but may take several more quarters to implement fully.
 
Data and product costs increased $136,042, or 23%, for the third quarter of 2011 compared to the same period of fiscal 2010. This increase was due primarily to higher salary and related employee benefits, including additional quality control personnel, as well as the higher cost of third-party content, due to the purchase of additional data elements.
 
Selling, general and administrative expenses increased $348,625, or 28%, for the third quarter of fiscal 2011 compared to the same period of fiscal 2010. This increase was due to higher salary and related employee benefits as well as to the outsourcing of certain data entry tasks and higher professional fees.
 
Depreciation and amortization increased $7,408, or 21%, for the third quarter of fiscal 2011 compared to the same period of fiscal 2010. This increase is due to a higher depreciable asset base reflecting the acquisition of new computer equipment and furniture related to the rental of additional office space as well as the replacement of computer equipment that had been in operation past its depreciable life.
 
Other income, net increased $12,526 for third quarter of fiscal 2011 compared to the same period last year. This increase was due to the Company having a higher cash balance to invest in 2011 versus 2010.
 
Provision for income taxes decreased $164,610 for the third quarter of fiscal 2011 compared to the same period of fiscal 2010. This decrease was due to the Company having lower pre-tax income because of the reasons enumerated above as well as the recording of additional deferred tax benefits upon the filing of its 2010 tax return.
 
 
9

 
   
9 Months Ended September 30,
 
   
2011
   
2010
 
          % of Total           % of Total  
         
Operating
         
Operating
 
   
Amount
   
Revenues
   
Amount
   
Revenues
 
                         
Operating revenues
  $ 7,559,650       100.00 %   $ 6,906,507       100.00 %
                                 
Operating expenses:
                               
Data and product costs
    2,196,463       29.06 %     1,751,224       25.36 %
Selling, general and administrative expenses
    4,502,063       59.55 %     3,844,920       55.67 %
Depreciation and amortization
    125,482       1.66 %     94,600       1.37 %
Total operating expenses
    6,824,008       90.27 %     5,690,744       82.40 %
                                 
Income from operations
    735,642       9.73 %     1,215,763       17.60 %
Other income, net
    87,015       1.15 %     54,161       0.79 %
                                 
Income before income taxes
    822,657       10.88 %     1,269,924       18.39 %
Provision for income taxes
    (254,711 )     (3.37 %)     (513,612 )     (7.44 %)
                                 
Net income
  $ 567,946       7.51 %   $ 756,312       10.95 %
 
Operating revenues increased $653,143, or 9%, for the nine months ended September 30, 2011 compared to the first nine months of fiscal 2010. This overall revenue growth resulted from a $668,647, or 10%, increase in Internet subscription service revenue, attributable to increased sales to new and existing subscribers, offset slightly by a $15,504, or 7%, decrease in the Company’s third-party international credit report subscription service, attributable to lower usage by subscribers. The widespread concerns of our subscribers and potential subscribers about corporate credit risk, driven by the Great Recession, gradually diminished during 2010. Their concerns about cost control have continued. It became apparent to the Company that our growth was slowing during 2010. So, in the third quarter of 2010 the Company reorganized its sales department and began to change its sales process to adapt to this new environment. The new selling method is more consistent with reduced “impulse” buying and also with the Company’s prospective new clients’ increased focus on cost control. The Company is seeing early signs that these changes in its sales process will be successful, over the long term, but may take several more quarters to implement fully.
 
Data and product costs increased $445,239, or 25%, for the first nine months of 2011 compared to the same period of fiscal 2010. This increase was due primarily to higher salary and related employee benefits, including additional quality control personnel, as well as the higher cost of third-party content, due to the purchase of additional data elements.
 
Selling, general and administrative expenses increased $657,143, or 17%, for the first nine months of fiscal 2011 compared to the same period of fiscal 2010. This increase was primarily due to the Company’s decision to outsource certain data entry tasks, as well as higher salary and related employee benefits, higher professional fees, and higher rent and utilities expense, related to the Company’s leasing of additional space at its corporate headquarters.
 
Depreciation and amortization increased $30,882, or 33%, for the first nine months of fiscal 2011 compared to the same period of fiscal 2010. This increase is due to a higher depreciable asset base reflecting the acquisition of new computer equipment and furniture related to the rental of additional office space as well as the replacement of computer equipment that had been in operation past its depreciable life.
 
Other income, net increased $32,854 for first nine months of fiscal 2011 compared to the same period last year. This increase was due to the Company having a higher cash balance to invest in 2011 versus 2010.
 
 
10

 
Provision for income taxes decreased $258,901 for the first nine months of fiscal 2011 compared to the same period of fiscal 2010. This decrease was due to the Company having lower pre-tax income because of the reasons enumerated above as well as the recording of additional deferred tax benefits upon the filing of its 2010 tax return.
 
FUTURE OPERATIONS
 
The Company over time intends to expand its operations by expanding the breadth and depth of its product and service offerings and introducing new and complementary products. Gross margins attributable to new business areas may be lower than those associated with the Company’s existing business activities.
 
As a result of the evolving nature of the markets in which it competes, the Company’s ability to accurately forecast its revenues, gross profits and operating expenses as a percentage of net sales is limited. The Company’s current and future expense levels are based largely on its investment plans and estimates of future revenues. To a large extent these costs do not vary with revenue. Sales and operating results generally depend on the Company’s ability to attract and retain customers and the volume of and timing of customer subscriptions for the Company’s services, which are difficult to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues in relation to the Company’s planned expenditures would have an immediate adverse effect on the Company’s business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service, marketing or acquisition decisions that could have a material adverse effect on its business, prospects, financial condition and results of operations.
 
Achieving greater profitability depends on the Company’s ability to generate and sustain increased revenue levels. The Company believes that its success will depend in large part on its ability to (i) increase its brand awareness, (ii) provide its customers with outstanding value, thus encouraging customer renewals, and (iii) achieve sufficient sales volume to realize economies of scale. Accordingly, the Company intends to continue to increase the size of its sales force, 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 2011 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 2011 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 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.
 
 
11

 
Due to the foregoing factors, the Company believes that period-to-period comparisons of its revenues and operating results are not necessarily meaningful and should not be relied on as an indication of future performance.
 
FORWARD-LOOKING STATEMENTS
 
This Quarterly Report on Form 10-Q may contain forward-looking statements, including statements regarding future prospects, industry trends, competitive conditions and litigation issues. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes”, “expects”, “anticipates”, “plans” or words of similar meaning are intended to identify forward-looking statements. This notice is intended to take advantage of the “safe harbor” provided by the Private Securities Litigation Reform Act of 1995 with respect to such forward-looking statements. These forward-looking statements involve a number of risks and uncertainties. Among others, factors that could cause actual results to differ materially from the Company’s beliefs or expectations are those listed under “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 our 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
 
 
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
101
The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Income, (iii) the Statements of Cash Flows, and (iv) the Notes to Financial Statements.*
 
*
Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
12

 
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, 2011
By:
/s/ Lawrence Fensterstock
          Lawrence Fensterstock
          Chief Financial Officer &
          Principal Accounting Officer
 
13