Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 13, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | CREDITRISKMONITOR COM INC | |
Entity Central Index Key | 0000315958 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 10,722,401 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Address, State or Province | NY |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 9,955,650 | $ 8,275,836 |
Accounts receivable, net of allowance | 2,270,026 | 2,287,921 |
Other current assets | 798,626 | 549,821 |
Total current assets | 13,024,302 | 11,113,578 |
Property and equipment, net | 439,299 | 477,973 |
Operating lease right-to-use asset | 2,291,330 | 2,380,974 |
Goodwill | 1,954,460 | 1,954,460 |
Other assets | 33,450 | 35,723 |
Total assets | 17,742,841 | 15,962,708 |
Current liabilities: | ||
Unexpired subscription revenue | 9,381,309 | 8,651,843 |
Accounts payable | 87,369 | 137,500 |
Current portion of operating lease liability | 154,422 | 147,229 |
Current portion of bank loan | 907,079 | 0 |
Accrued expenses | 1,278,216 | 1,344,550 |
Total current liabilities | 11,808,395 | 10,281,122 |
Deferred taxes on income, net | 318,108 | 521,765 |
Unexpired subscription revenue, less current portion | 185,639 | 166,169 |
Bank loan, less current portion | 654,421 | 0 |
Operating lease liability, less current portion | 2,221,030 | 2,299,433 |
Total liabilities | 15,187,593 | 13,268,489 |
Stockholders' equity: | ||
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued | 0 | 0 |
Common stock, $.01 par value; authorized 32,500,000 shares; issued and outstanding 10,722,401 shares | 107,224 | 107,224 |
Additional paid-in capital | 29,736,129 | 29,705,673 |
Accumulated deficit | (27,288,105) | (27,118,678) |
Total stockholders' equity | 2,555,248 | 2,694,219 |
Total liabilities and stockholders' equity | $ 17,742,841 | $ 15,962,708 |
CONDENSED BALANCE SHEETS (Una_2
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 32,500,000 | 32,500,000 |
Common stock, issued (in shares) | 10,722,401 | 10,722,401 |
Common stock, outstanding (in shares) | 10,722,401 | 10,722,401 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) [Abstract] | ||||
Operating revenues | $ 3,852,003 | $ 3,567,531 | $ 7,560,754 | $ 7,063,340 |
Operating expenses: | ||||
Data and product costs | 1,515,469 | 1,426,497 | 3,041,797 | 2,895,490 |
Selling, general and administrative expenses | 2,394,266 | 2,147,733 | 4,809,524 | 4,315,144 |
Depreciation and amortization | 53,693 | 50,045 | 107,805 | 101,034 |
Total operating expenses | 3,963,428 | 3,624,275 | 7,959,126 | 7,311,668 |
Loss from operations | (111,425) | (56,744) | (398,372) | (248,328) |
Other income, net | 3,417 | 43,209 | 26,101 | 84,099 |
Loss before income taxes | (108,008) | (13,535) | (372,271) | (164,229) |
Benefit from income taxes | 136,929 | 2,005 | 202,844 | 16,231 |
Net income (loss) | $ 28,921 | $ (11,530) | $ (169,427) | $ (147,998) |
Net income (loss) per share - Basic and diluted (in dollars per share) | $ 0 | $ 0 | $ (0.02) | $ (0.01) |
Weighted average number of common shares outstanding - Basic and diluted (in shares) | 10,722,401 | 10,722,401 | 10,722,401 | 10,722,401 |
CONDENSED STATEMENTS OF STOCKHO
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 107,224 | $ 29,650,760 | $ (26,800,152) | $ 2,957,832 |
Balance (in shares) at Dec. 31, 2018 | 10,722,401 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | $ 0 | 0 | (147,998) | (147,998) |
Stock-based compensation | 0 | 28,057 | 0 | 28,057 |
Balance at Jun. 30, 2019 | $ 107,224 | 29,678,817 | (26,948,150) | 2,837,891 |
Balance (in shares) at Jun. 30, 2019 | 10,722,401 | |||
Balance at Mar. 31, 2019 | $ 107,224 | 29,665,024 | (26,936,620) | 2,835,628 |
Balance (in shares) at Mar. 31, 2019 | 10,722,401 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | $ 0 | 0 | (11,530) | (11,530) |
Stock-based compensation | 0 | 13,793 | 0 | 13,793 |
Balance at Jun. 30, 2019 | $ 107,224 | 29,678,817 | (26,948,150) | 2,837,891 |
Balance (in shares) at Jun. 30, 2019 | 10,722,401 | |||
Balance at Dec. 31, 2019 | $ 107,224 | 29,705,673 | (27,118,678) | $ 2,694,219 |
Balance (in shares) at Dec. 31, 2019 | 10,722,401 | 10,722,401 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | $ 0 | 0 | (169,427) | $ (169,427) |
Stock-based compensation | 0 | 30,456 | 0 | 30,456 |
Balance at Jun. 30, 2020 | $ 107,224 | 29,736,129 | (27,288,105) | $ 2,555,248 |
Balance (in shares) at Jun. 30, 2020 | 10,722,401 | 10,722,401 | ||
Balance at Mar. 31, 2020 | $ 107,224 | 29,720,901 | (27,317,026) | $ 2,511,099 |
Balance (in shares) at Mar. 31, 2020 | 10,722,401 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | $ 0 | 0 | 28,921 | 28,921 |
Stock-based compensation | 0 | 15,228 | 0 | 15,228 |
Balance at Jun. 30, 2020 | $ 107,224 | $ 29,736,129 | $ (27,288,105) | $ 2,555,248 |
Balance (in shares) at Jun. 30, 2020 | 10,722,401 | 10,722,401 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (169,427) | $ (147,998) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Deferred income taxes | (203,657) | (17,187) |
Depreciation and amortization | 107,805 | 101,034 |
Operating lease right-to-use asset, net | 18,434 | 22,106 |
Stock-based compensation | 30,456 | 28,057 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 17,895 | 525,625 |
Other current assets | (248,805) | (271,104) |
Other assets | 2,273 | 4,006 |
Unexpired subscription revenue | 748,936 | 351,916 |
Accounts payable | (50,131) | 31,786 |
Accrued expenses | (66,334) | (179,869) |
Net cash provided by operating activities | 187,445 | 448,372 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (69,131) | (112,092) |
Net cash used in investing activities | (69,131) | (112,092) |
Cash flows from financing activities: | ||
Proceeds from bank loan | 1,561,500 | 0 |
Net cash provided from financing activities | 1,561,500 | 0 |
Net increase in cash and cash equivalents | 1,679,814 | 336,280 |
Cash and cash equivalents at beginning of period | 8,275,836 | 8,066,899 |
Cash and cash equivalents at end of period | $ 9,955,650 | $ 8,403,179 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | (1) Basis of Presentation The accompanying unaudited condensed financial statements of CreditRiskMonitor.com, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosure required by generally accepted accounting principles (“GAAP”) in the United States for complete financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited condensed financial statements reflect all material adjustments, including normal recurring accruals, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented, and have been prepared in a manner consistent with the audited financial statements for the fiscal year ended December 31, 2019. The results of operations for the three and six months ended June 30, 2020 and 2019 are not necessarily indicative of the results for an entire fiscal year. The December 31, 2019 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, 2019 included in the Company’s Annual Report on Form 10-K. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2020 | |
Recently Issued Accounting Standards [Abstract] | |
Recently Issued Accounting Standards | (2) Recently Issued Accounting Standards The Financial Accounting Standards Board (“FASB”) and the SEC have issued certain accounting pronouncements that will become effective in subsequent periods; however, management does not believe that any of those pronouncements would have significantly affected the Company’s financial accounting measurements or disclosures had they been in effect during the interim periods for which financial statements are included in this quarterly report. Management also believes those pronouncements will not have a significant effect on the Company’s future financial position or results of operations. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | (3) Revenue Recognition The Company applies Revenue from Contract with Customers primary source of revenue is subscription income which is recognized ratably over the subscription term |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | (4) Stock-Based Compensation The Company applies ASC 718, Compensation-Stock 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 six months ended June 30: 2020 2019 Data and product costs $ 11,166 $ 12,409 Selling, general and administrative expenses 19,290 15,648 $ 30,456 $ 28,057 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | (5) Fair Value Measurements The Company records its financial instruments at fair value in accordance with accounting guidance. The determination of fair value assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: (a) Level 1 – valuations based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; (b) Level 2 – valuations based on quoted prices in markets that are not active, or financial instruments for which all significant inputs are observable, either directly or indirectly; and (c) Level 3 – valuations based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable, thus, reflecting assumptions about the market participants. The Company’s cash and cash equivalents are stated at fair value. The carrying value of accounts receivable, other current assets, bank loan, accounts payable and other current liabilities approximates fair market value because of the short maturity of these financial instruments. The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The table below sets forth the Company’s cash and cash equivalents as of June 30, 2020 and December 31, 2019, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy. June 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 9,955,650 $ - $ - $ 9,955,650 December 31, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 8 ,275,836 $ - $ - $ 8,275,836 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 June 30, 2020 or December 31, 2019. |
Net Income (Loss) per Share
Net Income (Loss) per Share | 6 Months Ended |
Jun. 30, 2020 | |
Net Income (Loss) per Share [Abstract] | |
Net Income (Loss) per Share | (6) Net Income (Loss) per Share Basic net income (loss) per share is based on the weighted average number of common shares outstanding. Diluted net income (loss) per share is based on the weighted average number of common shares outstanding and the dilutive effect of outstanding stock options. For the three months ended June 30, 2020, the computation of diluted net income per share excludes the effects of the assumed exercise of 451,750 options since their inclusion would be anti-dilutive as their exercise prices were above market value. Because the Company has reported a net loss for the six months ended June 30, 2020, and three and six months ended June 30, 2019, diluted net loss per share is the same as basic net loss per share, as the effect of utilizing the fully diluted share count would have reduced the net loss per share. Therefore, all outstanding stock options were excluded from the computation of diluted net loss per share because their effect was anti‐dilutive for each of the periods presented. |
Related Party Transaction
Related Party Transaction | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transaction [Abstract] | |
Related Party Transaction | (7) Related Party Transaction On October 24, 2019, the Company’s Board of Directors appointed Michael Flum to serve as Senior Vice President and Chief Operating Officer effective immediately. Mr. Flum had served as Vice President of Operations & Alternative Data since June 4, 2018. Mr. Flum is the son of Jerome Flum, the Company’s Chief Executive Officer and Chairman of the Board of Directors, and the brother of Joshua Flum, a director of the Company. |
COVID-19
COVID-19 | 6 Months Ended |
Jun. 30, 2020 | |
COVID-19 [Abstract] | |
COVID-19 | (8) COVID-19 On March 11, 2020, the World Health Organization declared the outbreak of Coronavirus Disease 2019 (“COVID-19” or “virus”) as a global pandemic. The full impact of COVID-19 is unknown and rapidly evolving. The outbreak and any preventative or protective actions that the Company or its customers may take in respect of this virus may result in a period of disruption, including the Company’s financial reporting capabilities, its operations generally and could potentially impact the Company’s customers, data providers and other third parties. Any resulting financial impact cannot be reasonably estimated at this time, but may materially affect the business and the Company’s financial condition and results of operations. The extent to which the COVID-19 impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain the virus or treat its date, the Company’s data providers have provided an uninterrupted stream of information thus enabling the Company to deliver its product. The Company is currently evaluating the impact, if any, on its financial statements and has not yet quantified what material impacts to the financial statements may result from the actions taken by the Company and its customers in respect of this virus. In response to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. Additionally, the CARES Act contains relief for small businesses through several new temporary programs, one of which is the Paycheck Protection Program (“PPP”). T he PPP is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The Small Business Administration (“SBA”) will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent or utilities. The Company applied for a loan under this program and has received $1.56 million. The SBA provides a “safe harbor” for borrowers and has deemed certifications regarding the necessity of the loan to have been made in good faith for borrowers of less than $2 million. The PPP loan is scheduled to mature on April 15, 2022, has a 1.00% interest rate, may be prepaid at any time without penalty and is subject to the terms and conditions applicable to all loans made pursuant to the PPP as administered by the SBA In accordance with the requirements for forgiveness of the CARES Act, the Company has used the entire proceeds from the PPP Loan for eligible payroll, benefits, rent, utility costs, and maintained its employment levels. If the Company does not apply for forgiveness, the current portion of this loan, including interest, that is due within the next 12 months is $920,934. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation [Abstract] | |
Stock-based Compensation Expense for Stock Options | The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations in accordance with ASC 718 for six months ended June 30: 2020 2019 Data and product costs $ 11,166 $ 12,409 Selling, general and administrative expenses 19,290 15,648 $ 30,456 $ 28,057 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements [Abstract] | |
Cash and Cash Equivalents Measured at Fair Value on Recurring Basis | The table below sets forth the Company’s cash and cash equivalents as of June 30, 2020 and December 31, 2019, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy. June 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 9,955,650 $ - $ - $ 9,955,650 December 31, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 8 ,275,836 $ - $ - $ 8,275,836 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-based compensation expense for stock options [Abstract] | ||
Stock-based compensation expense | $ 30,456 | $ 28,057 |
Data and Product Costs [Member] | ||
Stock-based compensation expense for stock options [Abstract] | ||
Stock-based compensation expense | 11,166 | 12,409 |
Selling, General and Administrative Expenses [Member] | ||
Stock-based compensation expense for stock options [Abstract] | ||
Stock-based compensation expense | $ 19,290 | $ 15,648 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring [Member] - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Cash and cash equivalents measured at fair value on recurring basis [Abstract] | ||
Cash and cash equivalents | $ 9,955,650 | $ 8,275,836 |
Level 1 [Member] | ||
Cash and cash equivalents measured at fair value on recurring basis [Abstract] | ||
Cash and cash equivalents | 9,955,650 | 8,275,836 |
Level 2 [Member] | ||
Cash and cash equivalents measured at fair value on recurring basis [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Level 3 [Member] | ||
Cash and cash equivalents measured at fair value on recurring basis [Abstract] | ||
Cash and cash equivalents | $ 0 | $ 0 |
Net Income (Loss) per Share (De
Net Income (Loss) per Share (Details) | 3 Months Ended |
Jun. 30, 2020shares | |
Stock Options [Member] | |
Antidilutive Securities Excluded from Computation [Abstract] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 451,750 |
COVID-19 (Details)
COVID-19 (Details) - PPP Loan [Member] - USD ($) | Mar. 27, 2020 | Jun. 30, 2020 |
Loans Payable [Abstract] | ||
Proceeds from loans | $ 1,560,000 | |
Maturity date | Apr. 15, 2022 | |
Interest rate | 1.00% | |
Current portion of loan including interest | $ 920,934 |