Nevada
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36-2972588
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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704 Executive Boulevard, Suite A
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Valley Cottage, New York
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10989
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨
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Smaller reporting company þ
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Page
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PART I. FINANCIAL INFORMATION
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2
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3
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4
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5
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6
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8
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12
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PART II. OTHER INFORMATION
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12
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13
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June 30,
2012
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December 31,
2011
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|||||||
(Unaudited)
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(Note 1)
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|||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | 7,673,989 | $ | 6,531,204 | ||||
Marketable securities
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1,740,978 | 1,753,072 | ||||||
Accounts receivable, net of allowance
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1,012,168 | 1,551,213 | ||||||
Other current assets
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269,519 | 451,143 | ||||||
Total current assets
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10,696,654 | 10,286,632 | ||||||
Property and equipment, net
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296,382 | 306,810 | ||||||
Goodwill
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1,954,460 | 1,954,460 | ||||||
Prepaid and other assets
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38,269 | 23,232 | ||||||
Total assets
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$ | 12,985,765 | $ | 12,571,134 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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||||||||
Deferred revenue
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$ | 6,937,675 | $ | 6,471,494 | ||||
Accounts payable
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75,346 | 60,941 | ||||||
Accrued expenses
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662,804 | 1,087,163 | ||||||
Deferred taxes on income
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255,142 | 157,385 | ||||||
Total current liabilities
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7,930,967 | 7,776,983 | ||||||
Other liabilities
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4,862 | 3,714 | ||||||
Total liabilities
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7,935,829 | 7,780,697 | ||||||
Stockholders’ equity:
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||||||||
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued
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-- | -- | ||||||
Common stock, $.01 par value; authorized 25,000,000 shares; issued and outstanding 7,943,462 and 7,920,462 shares, respectively
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79,434 | 79,204 | ||||||
Additional paid-in capital
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28,692,013 | 28,597,679 | ||||||
Accumulated deficit
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(23,721,511 | ) | (23,886,446 | ) | ||||
Total stockholders’ equity
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5,049,936 | 4,790,437 | ||||||
Total liabilities and stockholders’ equity
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$ | 12,985,765 | $ | 12,571,134 |
2012
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2011
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|||||||
Operating revenues
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$ | 2,740,227 | $ | 2,539,350 | ||||
Operating expenses:
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||||||||
Data and product costs
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936,411 | 819,490 | ||||||
Selling, general and administrative expenses
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1,566,213 | 1,411,059 | ||||||
Depreciation and amortization
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38,415 | 41,507 | ||||||
Total operating expenses
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2,541,039 | 2,272,056 | ||||||
Income from operations
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199,188 | 267,294 | ||||||
Other income, net
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15,428 | 33,367 | ||||||
Income before income taxes
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214,616 | 300,661 | ||||||
Provision for income taxes
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(97,735 | ) | (91,012 | ) | ||||
Net income
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$ | 116,881 | $ | 209,649 | ||||
Net income per share of common stock:
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||||||||
Basic
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$ | 0.01 | $ | 0.03 | ||||
Diluted
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$ | 0.01 | $ | 0.03 | ||||
Weighted average number of common shares outstanding:
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||||||||
Basic
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7,943,462 | 7,900,629 | ||||||
Diluted
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8,240,706 | 8,344,914 |
2012
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2011
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|||||||
Operating revenues
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$ | 5,385,482 | $ | 4,979,311 | ||||
Operating expenses:
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||||||||
Data and product costs
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1,863,156 | 1,653,417 | ||||||
Selling, general and administrative expenses
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3,163,572 | 2,756,572 | ||||||
Depreciation and amortization
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76,556 | 82,729 | ||||||
Total operating expenses
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5,103,284 | 4,492,718 | ||||||
Income from operations
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282,198 | 486,593 | ||||||
Other income, net
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12,616 | 34,918 | ||||||
Income before income taxes
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294,814 | 521,511 | ||||||
Provision for income taxes
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(129,879 | ) | (182,451 | ) | ||||
Net income
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$ | 164,935 | $ | 339,060 | ||||
Net income per share of common stock:
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||||||||
Basic
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$ | 0.02 | $ | 0.04 | ||||
Diluted
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$ | 0.02 | $ | 0.04 | ||||
Weighted average number of common shares outstanding:
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||||||||
Basic
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7,937,480 |
7,900,045
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||||||
Diluted
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8,224,552 |
8,354,090
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2012
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2011
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|||||||
Cash flows from operating activities:
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||||||||
Net income
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$ | 164,935 | $ | 339,060 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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76,556 | 82,729 | ||||||
Deferred income taxes
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97,757 | 175,675 | ||||||
Deferred rent
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1,148 | 1,378 | ||||||
Stock-based compensation
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71,564 | 66,012 | ||||||
Unrealized (gain) loss on marketable securities
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12,094 | (9,849 | ) | |||||
Changes in operating assets and liabilities:
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||||||||
Accounts receivable
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539,045 | (82,344 | ) | |||||
Other current assets
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181,624 | 247,615 | ||||||
Prepaid and other assets
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(15,037 | ) | (22,450 | ) | ||||
Deferred revenue
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466,181 | 567,131 | ||||||
Accounts payable
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14,405 | 32,127 | ||||||
Accrued expenses
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(424,359 | ) | (589,175 | ) | ||||
Net cash provided by operating activities
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1,185,913 | 807,909 | ||||||
Cash flows from investing activities:
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Purchase of property and equipment
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(66,128 | ) | (50,559 | ) | ||||
Net cash used in investing activities
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(66,128 | ) | (50,559 | ) | ||||
Cash flows from financing activities:
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||||||||
Proceeds from exercise of stock options
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23,000 | 15,000 | ||||||
Net cash provided by financing activities
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23,000 | 15,000 | ||||||
Net increase in cash and cash equivalents
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1,142,785 | 772,350 | ||||||
Cash and cash equivalents at beginning of period
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6,531,204 | 5,642,568 | ||||||
Cash and cash equivalents at end of period
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$ | 7,673,989 | $ | 6,414,918 |
3 Months Ended
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6 Months Ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2012
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2011
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2012
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2011
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Data and product costs
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$ | 4,285 | $ | 4,315 | $ | 8,544 | $ | 8,170 | ||||||||
Selling, general and administrative expenses
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31,523 | 29,275 | 63,020 | 57,842 | ||||||||||||
$ | 35,808 | $ | 33,590 | $ | 71,564 | $ | 66,012 |
June 30, 2012
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December 31, 2011
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|||||||||||||||||||
Level 1
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Level 2
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Level 3
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Total
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Total
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Cash and cash equivalents
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$ | 7,673,989 | $ | - | $ | - | $ | 7,673,989 | $ | 6,531,204 | ||||||||||
Marketable securities
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1,740,978 | - | - | 1,740,978 | 1,753,072 | |||||||||||||||
Total
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$ | 9,414,967 | $ | - | $ | - | $ | 9,414,967 | $ | 8,284,276 |
3 Months Ended
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6 Months Ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2012
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2011
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2012
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2011
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Weighted average number of common shares outstanding – basic
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7,943,462 | 7,900,629 | 7,937,480 | 7,900,045 | ||||||||||||
Potential shares exercisable under stock option plans
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433,500 | 612,500 | 448,500 | 612,500 | ||||||||||||
LESS: Shares which could be repurchased under treasury stock method
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(136,256 | ) | (168,215 | ) | (161,428 | ) | (158,455 | ) | ||||||||
Weighted average number of common shares outstanding – diluted
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8,240,706 | 8,344,914 | 8,224,552 | 8,354,090 |
Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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June 30,
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December 31,
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|||||||
2012
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2011
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|||||||
Cash, cash equivalents and marketable securities
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$ | 9,415 | $ | 8,284 | ||||
Accounts receivable, net
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$ | 1,012 | $ | 1,551 | ||||
Working capital
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$ | 2,766 | $ | 2,510 | ||||
Cash ratio
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1.19 | 1.07 | ||||||
Quick ratio
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1.31 | 1.26 | ||||||
Current ratio
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1.35 | 1.32 |
3 Months Ended June 30,
|
||||||||||||||||
2012
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2011
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% of Total
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% of Total
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|||||||||||||||
Operating
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Operating
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|||||||||||||||
Amount
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Revenues
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Amount
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Revenues
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|||||||||||||
Operating revenues
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$ | 2,740,227 | 100.00 | % | $ | 2,539,350 | 100.00 | % | ||||||||
Operating expenses:
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Data and product costs
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936,411 | 34.17 | % | 819,490 | 32.27 | % | ||||||||||
Selling, general and administrative expenses
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1,566,213 | 57.16 | % | 1,411,059 | 55.57 | % | ||||||||||
Depreciation and amortization
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38,415 | 1.40 | % | 41,507 | 1.63 | % | ||||||||||
Total operating expenses
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2,541,039 | 92.73 | % | 2,272,056 | 89.47 | % | ||||||||||
Income from operations
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199,188 | 7.27 | % | 267,294 | 10.53 | % | ||||||||||
Other income, net
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15,428 | 0.56 | % | 33,367 | 1.31 | % | ||||||||||
Income before income taxes
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214,616 | 7.83 | % | 300,661 | 11.84 | % | ||||||||||
Provision for income taxes
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(97,735 | ) | (3.57 | %) | (91,012 | ) | (3.58 | %) | ||||||||
Net income
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$ | 116,881 | 4.26 | % | $ | 209,649 | 8.26 | % |
6 Months Ended June 30,
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||||||||||||||||
2012
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2011
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% of Total
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% of Total
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|||||||||||||||
Operating
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Operating
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|||||||||||||||
Amount
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Revenues
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Amount
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Revenues
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|||||||||||||
Operating revenues
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$ | 5,385,482 | 100.00 | % | $ | 4,979,311 | 100.00 | % | ||||||||
Operating expenses:
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||||||||||||||||
Data and product costs
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1,863,156 | 34.60 | % | 1,653,417 | 33.21 | % | ||||||||||
Selling, general and administrative expenses
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3,163,572 | 58.74 | % | 2,756,572 | 55.36 | % | ||||||||||
Depreciation and amortization
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76,556 | 1.42 | % | 82,729 | 1.66 | % | ||||||||||
Total operating expenses
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5,103,284 | 94.76 | % | 4,492,718 | 90.23 | % | ||||||||||
Income from operations
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282,198 | 5.24 | % | 486,593 | 9.77 | % | ||||||||||
Other income, net
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12,616 | 0.23 | % | 34,918 | 0.70 | % | ||||||||||
Income before income taxes
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294,814 | 5.47 | % | 521,511 | 10.47 | % | ||||||||||
Provision for income taxes
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(129,879 | ) | (2.41 | %) | (182,451 | ) | (3.66 | %) | ||||||||
Net income
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$ | 164,935 | 3.06 | % | $ | 339,060 | 6.81 | % |
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Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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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.
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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.
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101
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The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, 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.*
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*
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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.
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CREDITRISKMONITOR.COM, INC.
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(REGISTRANT)
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Date: August 14, 2012
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By: /s/
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Lawrence Fensterstock
|
Lawrence Fensterstock
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Chief Financial Officer &
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Principal Accounting Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of CreditRiskMonitor.com, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
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Date: August 14, 2012
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By: /s/
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Jerome S. Flum
|
Jerome S. Flum
|
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of CreditRiskMonitor.com, Inc.;
|
2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
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Date: August 14, 2012
|
By: /s/
|
Lawrence Fensterstock
|
Lawrence Fensterstock
|
||
Chief Financial Officer
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By: /s/
|
Jerome S. Flum
|
|
Jerome S. Flum
|
||
Chief Executive Officer
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By: /s/
|
Lawrence Fensterstock
|
|
Lawrence Fensterstock
|
||
Chief Financial Officer
|
Fair Value Measurements
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
|
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | (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 June 30, 2012 and December 31, 2011, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.
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, 2012 or December 31, 2011. |