☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
None | N/A | N/A |
Large accelerated filer ☐ | Accelerated filer ☐ | |||
Non-accelerated filer ☑ | Smaller reporting company ☑ | |||
Emerging growth company ☐ |
ITEM 1. | BUSINESS |
(1) | An annual fixed-price service (the “Fundamental Service”) with unlimited usage and coverage of public and private (where available) companies, featuring multi-period spreads of financial reports and ratio analysis, as well as up-to-date financial news screened specifically for usefulness in credit evaluation. Another feature of the service is notification and delivery of this news via email, concerning only companies of interest to the subscriber. This service is supplemented with trade receivable data contributed mainly by CreditRiskMonitor’s subscribers, as well as U.S. public-record filing information (i.e., suits, liens, judgments and bankruptcy information) covering millions of public and private U.S. companies. Made available in 2011 as a part of the Fundamental Service, the IRA Counterparty Quality (“CQ”) score is a predictor of bank failure for U.S. banks. |
(2) | The Fundamental Service features the Company’s proprietary credit scores, the FRISK® and PAYCE® scores. These proprietary scores indicates financial distress, by predicting the probability of bankruptcy within the next 12 months at public and private companies, respectively. The scores provide clients with a fast, consistent method for identifying those companies at greatest risk. |
i. | The FRISK® score is updated daily, based on the latest information available to the Company, and is derived from a structural statistical model back-tested using company data and bankruptcies between 2003 and 2013. This period covers 9,600 unique businesses and includes 580 bankruptcies over a period that includes the Great Recession. As of June 2016, the FRISK® score became even more predictive as we now factor in, when available, anonymous, aggregate crowd-sourced usage data from our subscribers – the FRISK® score can now predict public company bankruptcy risk with 96% accuracy within a 12-month period. The Company believes that some of the most experienced and knowledgeable credit and risk professionals use its website every day to analyze the companies they do business with. When the Company’s subscribers are concerned with a risky company, they investigate that company more closely, in what we have found to be distinct behavioral patterns. With this anonymous, aggregate behavior included, the FRISK® score is more sensitive and accurate, moving a relatively small, but largely important segment of businesses from risky to riskier. Essentially, when credit professionals start looking more closely as a group, there is usually something to be seen. Calculation of the FRISK® score involves preparation of data from multiple sources, the use of executable software created expressly by and owned by the Company as well as sophisticated algorithms and weighting techniques which are proprietary Company trade secrets. To its knowledge, CreditRiskMonitor is the only company currently using crowdsourcing of subscriber activity in generating a financial risk score. The Company’s website is highly structured, enabling it to track very specific patterns of use through its sophisticated and proprietary algorithms, which means the Company has been able to analyze click patterns for the past 10 years, through many financial shifts. At the end of |
ii. | The PAYCE® score provides a highly accurate measure of financial stress when no financial statements are available for private companies. It utilizes payment and U.S. federal tax lien data from CreditRiskMonitor’s extensive database, analyzed with sophisticated deep neural network modeling technology to deliver a |
Financial Statement Sourcing, an add-on service, which provides customers flexible options to help ease their process in the collection, data entry and standardization of private company financial |
Single credit reports on any of the over |
Individual credit reports on approximately 20 million foreign public and private companies. These reports are purchased by CreditRiskMonitor through an affiliation with a third-party supplier and sold to CreditRiskMonitor subscribers. |
Management. |
Credit professionals need to save time when analyzing their most important customers and suppliers, and the CreditRiskMonitor service provides this critical benefit. CreditRiskMonitor believes that its reports and monitoring of public companies, having aggregate revenues of approximately |
ITEM 2. | PROPERTIES. |
ITEM 3. | LEGAL PROCEEDINGS. |
ITEM 4. | MINE SAFETY DISCLOSURES. |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
High Bid | Low Bid | |||||||||||||||
High Bid | Low Bid | |||||||||||||||
2018 | ||||||||||||||||
First Quarter | $ | 2.15 | $ | 1.85 | $ | 2.15 | $ | 1.85 | ||||||||
Second Quarter | $ | 2.40 | $ | 1.99 | $ | 2.40 | $ | 1.99 | ||||||||
Third Quarter | $ | 2.25 | $ | 1.05 | $ | 2.25 | $ | 1.05 | ||||||||
Fourth Quarter | $ | 2.05 | $ | 1.55 | $ | 2.05 | $ | 1.55 | ||||||||
2017 | ||||||||||||||||
2019 | ||||||||||||||||
First Quarter | $ | 2.61 | $ | 2.00 | $ | 2.05 | $ | 1.60 | ||||||||
Second Quarter | $ | 2.25 | $ | 2.00 | $ | 1.75 | $ | 1.20 | ||||||||
Third Quarter | $ | 2.00 | $ | 1.01 | $ | 1.60 | $ | 1.20 | ||||||||
Fourth Quarter | $ | 2.02 | $ | 1.46 | $ | 1.60 | $ | 1.23 |
ITEM 6. | SELECTED FINANCIAL DATA. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Cash and cash equivalents | $ | 8,067 | $ | 8,735 | $ | 8,276 | $ | 8,067 | ||||||||
Accounts receivable, net | $ | 2,455 | $ | 2,140 | $ | 2,288 | $ | 2,455 | ||||||||
Working capital | $ | 939 | $ | 1,697 | $ | 832 | $ | 1,117 | ||||||||
Cash ratio | 0.80 | 0.90 | 0.80 | 0.81 | ||||||||||||
Quick ratio | 1.04 | 1.12 | 1.03 | 1.06 | ||||||||||||
Current ratio | 1.09 | 1.17 | 1.08 | 1.11 |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2018 | 2017 | Amount | % of Total Revenue | Amount | % of Total Revenue | |||||||||||||||||||||||||||
Amount | % of Total Revenue | Amount | % of Total Revenue | |||||||||||||||||||||||||||||
Operating revenues | $ | 13,891,004 | 100.00 | % | $ | 13,385,068 | 100.00 | % | $ | 14,501,173 | 100.00 | % | $ | 13,891,004 | 100.00 | % | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Data and product costs | 5,764,535 | 41.50 | % | 5,426,779 | 40.54 | % | 5,759,660 | 39.72 | % | 5,764,535 | 41.50 | % | ||||||||||||||||||||
Selling, general and administrative expenses | 8,257,619 | 59.44 | % | 8,044,256 | 60.10 | % | 8,347,083 | 57.56 | % | 8,257,619 | 59.44 | % | ||||||||||||||||||||
Depreciation and amortization | 190,156 | 1.37 | % | 191,960 | 1.43 | % | 207,224 | 1.43 | % | 190,156 | 1.37 | % | ||||||||||||||||||||
Total operating expenses | 14,212,310 | 102.31 | % | 13,662,995 | 102.07 | % | 14,313,967 | 98.71 | % | 14,212,310 | 102.31 | % | ||||||||||||||||||||
Loss from operations | (321,306 | ) | (2.31 | %) | (277,927 | ) | (2.07 | %) | ||||||||||||||||||||||||
Income (loss) from operations | 187,206 | 1.29 | % | (321,306 | ) | (2.31 | %) | |||||||||||||||||||||||||
Other income, net | 129,111 | 0.93 | % | 47,216 | 0.35 | % | 155,852 | 1.08 | % | 129,111 | 0.93 | % | ||||||||||||||||||||
Loss before income taxes | (192,195 | ) | (1.38 | %) | (230,711 | ) | (1.72 | %) | ||||||||||||||||||||||||
Benefit from income taxes | 12,863 | 0.09 | % | 242,781 | 1.81 | % | ||||||||||||||||||||||||||
Income (loss) before income taxes | 343,058 | 2.37 | % | (192,195 | ) | (1.38 | %) | |||||||||||||||||||||||||
Benefit from (provision for) income taxes | (125,464 | ) | (0.87 | %) | 12,863 | 0.09 | % | |||||||||||||||||||||||||
Net income (loss) | $ | (179,332 | ) | (1.29 | %) | $ | 12,070 | 0.09 | % | $ | 217,594 | 1.50 | % | $ | (179,332 | ) | (1.29 | %) |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
2018 | 2017 | 2019 | 2018 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 8,066,899 | $ | 8,735,148 | $ | 8,275,836 | $ | 8,066,899 | ||||||||
Accounts receivable, net of allowance of $30,000 | 2,454,585 | 2,139,707 | 2,287,921 | 2,454,585 | ||||||||||||
Other current assets | 561,861 | 530,699 | 549,821 | 561,861 | ||||||||||||
Total current assets | 11,083,345 | 11,405,554 | 11,113,578 | 11,083,345 | ||||||||||||
Property and equipment, net | 543,762 | 437,216 | 477,973 | 543,762 | ||||||||||||
Operating lease right-of-use asset | 2,380,974 | -- | ||||||||||||||
Goodwill | 1,954,460 | 1,954,460 | 1,954,460 | 1,954,460 | ||||||||||||
Other assets | 35,613 | 23,463 | 35,723 | 35,613 | ||||||||||||
Total assets | $ | 13,617,180 | $ | 13,820,693 | $ | 15,962,708 | $ | 13,617,180 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Unexpired subscription revenue | $ | 8,738,445 | $ | 8,304,877 | $ | 8,651,843 | $ | 8,560,316 | ||||||||
Accounts payable | 94,767 | 58,901 | 137,500 | 94,767 | ||||||||||||
Current portion of operating lease liability | 147,229 | -- | ||||||||||||||
Accrued expenses | 1,311,218 | 1,344,526 | 1,344,550 | 1,311,218 | ||||||||||||
Total current liabilities | 10,144,430 | 9,708,304 | 10,281,122 | 9,966,301 | ||||||||||||
Deferred taxes on income, net | 490,381 | 514,333 | 521,765 | 490,381 | ||||||||||||
Unexpired subscription revenue, less current portion | 166,169 | 178,129 | ||||||||||||||
Operating lease liability, less current portion | 2,299,433 | -- | ||||||||||||||
Other liabilities | 24,537 | 15,748 | -- | 24,537 | ||||||||||||
Total liabilities | 10,659,348 | 10,238,385 | 13,268,489 | 10,659,348 | ||||||||||||
Commitments and contingencies | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued | - | - | - | - | ||||||||||||
Common stock, $.01 par value; authorized 32,500,000 shares; issued and outstanding 10,722,401 shares | 107,224 | 107,224 | 107,224 | 107,224 | ||||||||||||
Additional paid-in capital | 29,650,760 | 29,559,784 | 29,705,673 | 29,650,760 | ||||||||||||
Accumulated deficit | (26,800,152 | ) | (26,084,700 | ) | (27,118,678 | ) | (26,800,152 | ) | ||||||||
Total stockholders’ equity | 2,957,832 | 3,582,308 | 2,694,219 | 2,957,832 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 13,617,180 | $ | 13,820,693 | $ | 15,962,708 | $ | 13,617,180 |
2019 | 2018 | |||||||
Operating revenues | $ | 14,501,173 | $ | 13,891,004 | ||||
Operating expenses: | ||||||||
Data and product costs | 5,759,660 | 5,764,535 | ||||||
Selling, general and administrative expenses | 8,347,083 | 8,257,619 | ||||||
Depreciation and amortization | 207,224 | 190,156 | ||||||
Total operating expenses | 14,313,967 | 14,212,310 | ||||||
Income (loss) from operations | 187,206 | (321,306 | ) | |||||
Other income, net | 155,852 | 129,111 | ||||||
Income (loss) before income taxes | 343,058 | (192,195 | ) | |||||
Benefit from (provision for) income taxes | (125,464 | ) | 12,863 | |||||
Net income (loss) | $ | 217,594 | $ | (179,332 | ) | |||
Net income (loss) per share: | ||||||||
Basic | $ | 0.02 | $ | (0.02 | ) | |||
Diluted | $ | 0.02 | $ | (0.02 | ) |
2018 | 2017 | |||||||
Operating revenues | $ | 13,891,004 | $ | 13,385,068 | ||||
Operating expenses: | ||||||||
Data and product costs | 5,764,535 | 5,426,779 | ||||||
Selling, general and administrative expenses | 8,257,619 | 8,044,256 | ||||||
Depreciation and amortization | 190,156 | 191,960 | ||||||
Total operating expenses | 14,212,310 | 13,662,995 | ||||||
Loss from operations | (321,306 | ) | (277,927 | ) | ||||
Other income, net | 129,111 | 47,216 | ||||||
Loss before income taxes | (192,195 | ) | (230,711 | ) | ||||
Benefit from income taxes | 12,863 | 242,781 | ||||||
Net income (loss) | $ | (179,332 | ) | $ | 12,070 | |||
Net income (loss) per share: | ||||||||
Basic | $ | (0.02 | ) | $ | 0.00 | |||
Diluted | $ | (0.02 | ) | $ | 0.00 |
Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | Common Stock | |||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance January 1, 2017 | 10,722,401 | $ | 107,224 | $ | 29,419,463 | $ | (25,560,650 | ) | $ | 3,966,037 | ||||||||||||||||||||||||||||||
Net income | - | - | - | 12,070 | 12,070 | |||||||||||||||||||||||||||||||||||
Cash dividend paid | - | - | - | (536,120 | ) | (536,120 | ) | |||||||||||||||||||||||||||||||||
Stock-based compensation | - | - | 140,321 | - | 140,321 | |||||||||||||||||||||||||||||||||||
Balance December 31, 2017 | 10,722,401 | 107,224 | 29,559,784 | (26,084,700 | ) | 3,582,308 | ||||||||||||||||||||||||||||||||||
Balance January 1, 2018 | 10,722,401 | $ | 107,224 | $ | 29,559,784 | $ | (26,084,700 | ) | $ | 3,582,308 | ||||||||||||||||||||||||||||||
Net loss | - | - | - | (179,332 | ) | (179,332 | ) | - | - | - | (179,332 | ) | (179,332 | ) | ||||||||||||||||||||||||||
Cash dividend paid | - | - | - | (536,120 | ) | (536,120 | ) | - | - | - | (536,120 | ) | (536,120 | ) | ||||||||||||||||||||||||||
Stock-based compensation | - | - | 90,976 | - | 90,976 | - | - | 90,976 | - | 90,976 | ||||||||||||||||||||||||||||||
Balance December 31, 2018 | 10,722,401 | $ | 107,224 | $ | 29,650,760 | $ | (26,800,152 | ) | $ | 2,957,832 | 10,722,401 | 107,224 | 29,650,760 | (26,800,152 | ) | 2,957,832 | ||||||||||||||||||||||||
Net income | - | - | - | 217,594 | 217,594 | |||||||||||||||||||||||||||||||||||
Cash dividend paid | - | - | - | (536,120 | ) | (536,120 | ) | |||||||||||||||||||||||||||||||||
Stock-based compensation | - | - | 54,913 | - | 54,913 | |||||||||||||||||||||||||||||||||||
Balance December 31, 2019 | 10,722,401 | $ | 107,224 | $ | 29,705,673 | $ | (27,118,678 | ) | $ | 2,694,219 |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | $ | (179,332 | ) | $ | 12,070 | $ | 217,594 | $ | (179,332 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Deferred income taxes | (23,952 | ) | (248,070 | ) | 31,384 | (23,952 | ) | |||||||||
Depreciation and amortization | 190,156 | 191,960 | 207,224 | 190,156 | ||||||||||||
Stock-based compensation | 90,976 | 140,321 | 54,913 | 90,976 | ||||||||||||
Operating lease | 41,151 | -- | ||||||||||||||
Deferred rent | 8,789 | 3,174 | -- | 8,789 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable, net | (314,878 | ) | (49,031 | ) | 166,664 | (314,878 | ) | |||||||||
Other current assets | (31,162 | ) | (43,442 | ) | 12,040 | (31,162 | ) | |||||||||
Other assets | (12,150 | ) | 300 | (110 | ) | (12,150 | ) | |||||||||
Unexpired subscription revenue | 433,568 | 215,919 | 79,567 | 433,568 | ||||||||||||
Accounts payable | 35,866 | (37,824 | ) | 42,733 | 35,866 | |||||||||||
Accrued expenses | (33,308 | ) | 62,400 | 33,332 | (33,308 | ) | ||||||||||
Net cash provided by operating activities | 164,573 | 247,777 | 886,492 | 164,573 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property and equipment | (296,702 | ) | (198,852 | ) | (141,435 | ) | (296,702 | ) | ||||||||
Net cash used in investing activities | (296,702 | ) | (198,852 | ) | (141,435 | ) | (296,702 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Dividend paid to stockholders | (536,120 | ) | (536,120 | ) | (536,120 | ) | (536,120 | ) | ||||||||
Net cash used in financing activities | (536,120 | ) | (536,120 | ) | (536,120 | ) | (536,120 | ) | ||||||||
Net decrease in cash and cash equivalents | (668,249 | ) | (487,195 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 208,937 | (668,249 | ) | |||||||||||||
Cash and cash equivalents at beginning of year | 8,735,148 | 9,222,343 | 8,066,899 | 8,735,148 | ||||||||||||
Cash and cash equivalents at end of year | $ | 8,066,899 | $ | 8,735,148 | $ | 8,275,836 | $ | 8,066,899 | ||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||
Cash paid (refunded), net during the year for: | ||||||||||||||||
Income taxes | $ | (103,812 | ) | $ | 136,647 | $ | 41,261 | $ | (103,812 | ) |
As reported Dec. 31, 2018 | Adoption of ASC 842 Increase | Balance Jan. 1, 2019 | ||||||||||
Operating lease right-to-use asset | $ | - | $ | 2,589,875 | $ | 2,589,875 | ||||||
Total assets | 13,617,180 | 2,589,875 | 16,207,055 | |||||||||
Current portion of operating lease liability | - | 143,213 | 143,213 | |||||||||
Operating lease liability | - | 2,446,662 | 2,446,662 | |||||||||
Total liabilities and stockholders’ equity | 13,617,180 | 2,589,875 | 16,207,055 |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Cash | $ | 958,739 | $ | 508,942 | $ | 652,275 | $ | 958,739 | ||||||||
Money market funds | 7,108,160 | 8,226,206 | 7,623,561 | 7,108,160 | ||||||||||||
$ | 8,066,899 | $ | 8,735,148 | $ | 8,275,836 | $ | 8,066,899 |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Current: | ||||||||||||||||
Federal | $ | 3,620 | $ | (2,746 | ) | $ | 67,677 | $ | 3,620 | |||||||
State | 7,469 | 8,035 | 26,404 | 7,469 | ||||||||||||
Deferred: | ||||||||||||||||
Federal | (18,379 | ) | (264,707 | ) | 23,781 | (18,379 | ) | |||||||||
State | (5,573 | ) | 16,637 | 7,602 | (5,573 | ) | ||||||||||
$ | (12,863 | ) | $ | (242,781 | ) | $ | 125,464 | $ | (12,863 | ) |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Computed “expected” expense (benefit) | $ | (40,361 | ) | $ | (78,408 | ) | $ | 72,042 | $ | (40,361 | ) | |||||
Permanent differences | 23,670 | 42,570 | 25,619 | 23,670 | ||||||||||||
State and local income tax expense | (8,808 | ) | (7,749 | ) | 12,344 | (8,808 | ) | |||||||||
True-up of current taxes | 4,892 | 1,025 | 4,763 | 4,892 | ||||||||||||
True-up of deferred taxes | 7,117 | 20,735 | 11,014 | 7,117 | ||||||||||||
Change in federal statutory rate | 627 | (220,954 | ) | (318 | ) | 627 | ||||||||||
Income tax benefit | $ | (12,863 | ) | $ | (242,781 | ) | $ | 125,464 | $ | (12,863 | ) |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Deferred tax assets: | ||||||||||||||||
Net operating loss carryovers | $ | 10,443 | $ | -- | $ | - | $ | 10,443 | ||||||||
Stock options | 16,182 | 12,406 | 20,085 | 16,182 | ||||||||||||
Accrued vacation | 76,817 | 65,317 | 70,654 | 76,817 | ||||||||||||
Bad debt allowance | 8,319 | 8,309 | 8,314 | 8,319 | ||||||||||||
Deferred revenue | 7,384 | 4,674 | 5,833 | 7,384 | ||||||||||||
Deferred rent | 6,804 | 4,362 | 11,403 | 6,804 | ||||||||||||
Other | 24,081 | 19,945 | 21,972 | 24,081 | ||||||||||||
Total deferred tax assets | 150,030 | 115,013 | 138,261 | 150,030 | ||||||||||||
Deferred tax liabilities: | ||||||||||||||||
Goodwill | (541,972 | ) | (541,310 | ) | (541,628 | ) | (541,972 | ) | ||||||||
Fixed assets | (98,439 | ) | (88,036 | ) | (118,398 | ) | (98,439 | ) | ||||||||
Total deferred tax liabilities | (640,411 | ) | (629,346 | ) | (660,026 | ) | (640,411 | ) | ||||||||
Net deferred tax liabilities | $ | (490,381 | ) | $ | (514,333 | ) | $ | (521,765 | ) | $ | (490,381 | ) |
Number of Shares | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | |||||||||||||
Outstanding at January 1, 2017 | 396,090 | $ | 3.1315 | |||||||||||||
Forfeited | (49,540 | ) | 2.1762 | |||||||||||||
Granted | 74,800 | 2.0588 | ||||||||||||||
Outstanding at December 31, 2017 | 421,350 | $ | 3.0534 | |||||||||||||
Outstanding at January 1, 2018 | 421,350 | $ | 3.0534 | |||||||||||||
Forfeited | (44,500 | ) | 3.6865 | (44,500 | ) | 3.6855 | ||||||||||
Outstanding at December 31, 2018 | 376,850 | $ | 2.9786 | 376,850 | $ | 2.9786 | ||||||||||
Granted | 195,800 | 1.4523 | ||||||||||||||
Forfeited | (115,780 | ) | 3.0584 | |||||||||||||
Outstanding at December 31, 2019 | 456,870 | $ | 2.3043 |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Data and product costs | $ | 35,656 | $ | 35,661 | $ | 22,460 | $ | 35,656 | ||||||||
Selling, general and administrative costs | 55,320 | 104,660 | 32,453 | 55,320 | ||||||||||||
$ | 90,976 | $ | 140,321 | $ | 54,913 | $ | 90,976 |
Risk-free interest rate | 1.78 | % | ||
Expected dividend yield | 3.45 | % | ||
Expected volatility factor | 0.64 | |||
Expected life of the option (years) | 9.00 |
Range of Exercise Prices | Options Outstanding | Options Exercisable | |||||||||||||||||||
Number Outstanding | Weighted Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | Number Exercisable | Weighted Average Exercise Price | |||||||||||||||||
$ 1.00 - $ 2.00 | 54,800 | 8.79 | $ | 1.6788 | - | - | |||||||||||||||
$ 2.01 - $ 3.00 | 151,500 | 5.81 | $ | 2.6917 | 35,100 | $ | 2.3154 | ||||||||||||||
$ 3.01 - $ 6.00 | 170,550 | 1.54 | $ | 3.6511 | 154,440 | $ | 3.6092 | ||||||||||||||
376,850 | 4.31 | $ | 2.9786 | 189,540 | $ | 3.3696 |
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Weighted Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | Number Exercisable | Weighted Average Exercise Price | ||||||||||||||||
$ 1.00 - $ 2.00 | 250,600 | 9.37 | $ | 1.5018 | - | - | |||||||||||||||
$ 2.01 - $ 3.00 | 139,720 | 4.71 | $ | 2.6746 | 46,176 | $ | 2.3154 | ||||||||||||||
$ 3.01 - $ 6.00 | 66,550 | 1.45 | $ | 4.5485 | 56,550 | $ | 4.7171 | ||||||||||||||
456,870 | 6.79 | $ | 2.3043 | 102,726 | $ | 3.6375 |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Computer equipment and software | $ | 1,347,020 | $ | 1,485,044 | $ | 1,485,579 | $ | 1,347,020 | ||||||||
Furniture and fixtures | 504,628 | 369,595 | 507,503 | 504,628 | ||||||||||||
Leasehold improvements | 240,328 | 187,062 | 240,328 | 240,328 | ||||||||||||
2,091,976 | 2,041,701 | 2,233,410 | 2,091,976 | |||||||||||||
Less accumulated depreciation and amortization | (1,548,214 | ) | (1,604,485 | ) | (1,755,437 | ) | (1,548,214 | ) | ||||||||
$ | 543,762 | $ | 437,216 | $ | 477,973 | $ | 543,762 |
Operating Leases | ||||||||
2019 | $ | 249,943 | ||||||
2020 | 256,862 | $ | 255,311 | |||||
2021 | 262,970 | 262,970 | ||||||
2022 | 270,859 | 270,859 | ||||||
2023 | 278,985 | 278,985 | ||||||
2024 | 287,355 | |||||||
Thereafter | 457,876 | 1,769,054 | ||||||
Total future undiscounted lease payments | 3,124,534 | |||||||
LESS: Imputed interest at 4.54% | (677,872 | ) | ||||||
Present value of lease liability | $ | 2,446,662 | ||||||
Total minimum lease payments | $ | 1,777,495 | ||||||
Current portion of operating lease liability | $ | 147,229 | ||||||
Non-current portion of operating lease liability | 2,299,433 | |||||||
$ | 2,446,662 |
2018 | 2017 | 2019 | 2018 | |||||||||||||
Net income (loss) | $ | (179,332 | ) | $ | 12,070 | $ | 217,594 | $ | (179,332 | ) | ||||||
Weighted average common shares outstanding – basic | 10,722,401 | 10,722,401 | 10,722,401 | 10,722,401 | ||||||||||||
Potential shares exercisable under stock option plans | -- | 143,280 | 13,700 | -- | ||||||||||||
LESS: Shares which could be repurchased under treasury stock method | -- | (139,560 | ) | (11,562 | ) | -- | ||||||||||
Weighted average common shares outstanding – diluted | 10,722,401 | 10,726,121 | 10,724,539 | 10,722,401 | ||||||||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.00 | $ | 0.02 | $ | (0.02 | ) | ||||||
Diluted | $ | (0.02 | ) | $ | 0.00 | $ | 0.02 | $ | (0.02 | ) |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
ITEM 9A. | CONTROLS AND PROCEDURES. |
ITEM 9B. | OTHER INFORMATION. |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
Name | Age | Principal Occupation/Position Held with Company | Officer or Director Since | Age | Principal Occupation/Position Held with Company | Officer or Director Since | |
Jerome S. Flum | 78 | Chairman of the Board/Chief Executive Officer | 1983 | 79 | Chairman of the Board/Chief Executive Officer | 1983 | |
Michael I. Flum | 33 | Senior Vice President/Chief Operating Officer | 2019 | ||||
Lawrence Fensterstock | 68 | Senior Vice President/Chief Financial Officer/Secretary | 1999 | 69 | Senior Vice President/Chief Financial Officer | 1999 | |
Jonathan L. Levy | 55 | Senior Vice President/General Counsel/Secretary | 2019 | ||||
Andrew J. Melnick | 77 | Director | 2005 | 78 | Director | 2005 | |
Jeffrey S. Geisenheimer | 53 | Director | 2005 | 54 | Director | 2005 | |
Joshua M. Flum | 49 | Director | 2007 | 50 | Director | 2007 | |
Richard J. James | 79 | Director | 1992 |
ITEM 11. | EXECUTIVE COMPENSATION. |
SUMMARY COMPENSATION TABLE | ||||||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus (1) | Option Awards (2) | All Other Compensation | Total | ||||||||||||||||||
Jerome S. Flum, Chairman and Chief Executive Officer | 2019 2018 | $ $ | 188,640 183,120 | $ $ | 4,400 4,700 | $ $ | 51 2,971 | $ $ | -0- -0- | $ $ | 193,091 190,791 | |||||||||||||
Michael I. Flum, Senior Vice President (3) | 2019 2018 | $ $ | 147,700 62,942 | $ $ | 28,880 8,800 | $ $ | 799 -0- | $ $ | -0- -0- | $ $ | 177,379 71,742 | |||||||||||||
Lawrence Fensterstock, Senior Vice President | 2019 2018 | $ $ | 188,640 183,120 | $ $ | 44,080 36,600 | $ $ | 1,461 1,461 | $ $ | -0- -0- | $ $ | 234,181 221,181 | |||||||||||||
Jonathan L. Levy, Senior Vice President (4) | 2019 | $ | 66,667 | $ | 11,830 | $ | 72 | $ | -0- | $ | 78,569 |
GRANTS OF PLAN-BASED AWARDS | ||||||||||||||||||||
Equity Grants | ||||||||||||||||||||
Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards | |||||||||||||||
Michael I. Flum | 10-24-19 | N/A | 50,000 | $ | 1.45 | $ | 33,819 | |||||||||||||
Jonathan L. Levy | 10-24-19 | N/A | 4,500 | $ | 1.45 | $ | 3,044 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | ||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Un-exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||
Jerome S. Flum | -0- | 5,000 | -0- | $ | 3.19 | 01-05-21 | ||||||||||||||
Michael I. Flum | -0- | 50,000 | -0- | $ | 1.45 | 10-24-29 | ||||||||||||||
Lawrence Fensterstock | 2,080 -0- | 520 3,000 | -0- -0- | $ $ | 2.32 2.90 | 07-11-22 01-05-26 | ||||||||||||||
Jonathan L. Levy | -0- | 4,500 | -0- | $ | 1.45 | 10-24-29 |
DIRECTOR COMPENSATION | DIRECTOR COMPENSATION | DIRECTOR COMPENSATION | ||||||||||||||||||||||
Name | Fees Earned or Paid in Cash | Option Awards(1) | Total | Fees Earned or Paid in Cash | Option Awards(1) | Total | ||||||||||||||||||
Andrew J. Melnick | $ | 4,000 | $ | 2,331 | $ | 6,331 | $ | 4,000 | $ | 2,524 | $ | 6,524 | ||||||||||||
Jeffrey S. Geisenheimer | $ | 4,000 | $ | 2,331 | $ | 6,331 | $ | 4,000 | $ | 2,524 | $ | 6,524 | ||||||||||||
Joshua M. Flum | $ | 4,000 | $ | 6,552 | $ | 10,552 | $ | 4,000 | $ | 6,744 | $ | 10,744 | ||||||||||||
Richard J. James | $ | 4,000 | $ | 2,331 | $ | 6,331 | $ | 3,000 | $ | 2,331 | $ | 5,331 |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class | Amount and Nature of Beneficial Ownership(1) | Percent of Class |
Santa Monica Partners, L.P. SMP Asset Management, LLC Lawrence J. Goldstein(2) 1865 Palmer Avenue Larchmont, NY 10538 | 716,654 | 6.57% | 716,654 | 6.62% |
Tabatabai Investment Management LLC Tabatabai Investment Partners LP Alex Tabatabai(3) 540 N Dearborn Street, #101257 Chicago, IL 60610 | 727,430 | 6.66% | 727,430 | 6.72% |
Flum Partners (4) | 5,641,134 | 51.68% | 5,641,134 | 52.08% |
Jerome S. Flum | 6,238,776 (5)(6) | 57.16% | 6,239,776 (5)(6) | 57.61% |
Michael I. Flum | 6,500 | -----* | ||
Lawrence Fensterstock | 142,378 | 1.30% | 143,498 | 1.32% |
Andrew J. Melnick | 59,670 | -----* | 61,370 | -----* |
Jeffrey S. Geisenheimer | 125,348 | 1.15% | 127,048 | 1.17% |
Joshua M. Flum | 10,400 | -----* | 12,100 | -----* |
Richard J. James | 64,350 | -----* | ||
All directors and executive officers (as a group (7 persons)) | 6,640,922 (5)(6) | 60.84% | ||
All directors and executive officers (as a group (6 persons)) | 6,590,292 (5)(6) | 60.85% |
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | ||||||||||||||||||
Equity compensation plans approved by stockholders | 376,850 | $ | 2.98 | 922,890 | 456,870 | $ | 2.30 | -0- | ||||||||||||||||
Total | 376,850 | $ | 2.98 | 922,890 | 456,870 | $ | 2.30 | -0- |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES. |
Fiscal Year Ended December 31, | Fiscal Year Ended December 31, | |||||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||||
Audit fees (1) | $ | 102,000 | $ | 99,000 | $ | 99,500 | $ | 102,000 | ||||||||
Audit related fees (2) | - | - | - | - | ||||||||||||
Tax fees (3) | 12,200 | 11,785 | 12,600 | 12,200 | ||||||||||||
All other fees | - | - | - | - | ||||||||||||
Total fees | $ | 114,200 | $ | 110,785 | $ | 112,100 | $ | 114,200 |
(1) | Consists of fees for services provided in connection with the audit of the Company’s financial statements and review of the Company’s quarterly financial statements. |
(2) | Consists of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit fees.” |
(3) | Consists of fees for preparation of federal and state income tax returns. |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. |
(a) | Financial Statements – contained in Item 8: |
Page | ||
Report of Independent Registered Public Accounting Firm | ||
Balance Sheets - December 31, | ||
Statements of Operations - Years Ended December 31, 2018 | ||
Statements of Stockholders’ Equity - Years Ended December 31, 2018 | 18 | |
Statements of Cash Flows - Years Ended December 31, 2018 | 19 | |
Notes to Financial Statements |
(b) | Exhibits: |
- | Copy of the Company’s Amended and Restated Articles of Incorporation dated as of May 7, 1999 (incorporated by reference to Form 10-KSB for the year ended December 31, 1999, filed March 29, 2000) | ||
- | |||
- | Copy of Company’s 2009 Long-Term Incentive Plan (incorporated by reference to Definitive Statement on Schedule 14C, filed October 22, 2010) | ||
- | CreditRiskMonitor.com, Inc. Code of Ethics for Principal Executive Officer and Senior Financial Officers (incorporated by reference to Form 10-KSB for the year ended December 31, 2003, filed March 30, 2004) | ||
- | Consent of Independent Registered Public Accounting Firm | ||
- | Certification of Chief Executive Officer | ||
- | Certification of Chief Financial Officer | ||
- | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
- | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
101.INS | - | XBRL Instance Document | |
101.SCH | - | XBRL Taxonomy Extension Schema Document | |
101.CAL | - | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | - | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | - | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | - | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Filed herewith. |
Date: March 18, 2020 | By: | /s/ | Jerome S. Flum |
Jerome S. Flum | |||
Chairman of the Board and | |||
Chief Executive Officer |
Date: March 18, 2020 | By: | /s/ | Jerome S. Flum |
Chairman of the Board and |
Chief Executive Officer | |||
Date: March 18, 2020 | By: | /s/ | |
Lawrence Fensterstock | |||
(Principal Financial and Accounting Officer) |
Date: March 18, 2020 | By: | /s/ | Andrew J. Melnick |
Director |
Date: March 18, 2020 | By: | /s/ | Jeffrey S. Geisenheimer |
Jeffrey S. Geisenheimer | |||
Director |
Date: March 18, 2020 | By: | /s/ | Joshua M. Flum |
Joshua M. Flum | |||
Director |