10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

OR

☐ 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 ☑  No ☐

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 ☑    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller 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 ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☑

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes ☐    No ☑

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 – 10,722,401 shares outstanding as of November 4, 2016.

CREDITRISKMONITOR.COM, INC.

INDEX

			Page
PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		Balance Sheets – September 30, 2016 (Unaudited) and December 31, 2015	2
		Statements of Operations for the Three Months Ended September 30, 2016 and 2015 (Unaudited)	3
		Statements of Operations for the Nine Months Ended September 30, 2016 and 2015 (Unaudited)	4
		Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (Unaudited)	5
		Condensed Notes to Financial Statements	6
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
	Item 4. Controls and Procedures		13
PART II. OTHER INFORMATION
	Item 6. Exhibits		14
SIGNATURES			15

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CREDITRISKMONITOR.COM, INC.

BALANCE SHEETS

SEPTEMBER 30, 2016 AND DECEMBER 31, 2015

	September 30, 2016			December 31, 2015
	(Unaudited)			(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	9,561,016		$	8,717,899
Marketable securities		274,029			245,474
Accounts receivable, net of allowance		1,490,154			1,927,428
Other current assets		686,418			555,871
Total current assets		12,011,617			11,446,672
Property and equipment, net		403,359			395,026
Goodwill		1,954,460			1,954,460
Prepaid and other assets		46,676			33,999
Total assets	$	14,416,112		$	13,830,157
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Deferred revenue	$	7,857,159		$	7,436,764
Accounts payable		162,814			78,267
Accrued expenses		1,249,758			1,241,317
Total current liabilities		9,269,731			8,756,348
Deferred taxes on income		743,757			759,454
Other liabilities		11,242			4,314
Total liabilities		10,024,730			9,520,116
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 and 10,722,321 shares, respectively		107,224			107,223
Additional paid-in capital		29,392,158			29,279,791
Accumulated deficit		(25,108,000	)		(25,076,973	)
Total stockholders’ equity		4,391,382			4,310,041
Total liabilities and stockholders’ equity	$	14,416,112		$	13,830,157

See accompanying condensed notes to financial statements.

2

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(Unaudited)

	2016			2015
Operating revenues	$	3,237,687		$	3,153,249
Operating expenses:
Data and product costs		1,254,151			1,134,296
Selling, general and administrative expenses		1,808,184			1,635,790
Depreciation and amortization		48,894			54,470
Total operating expenses		3,111,229			2,824,556
Income from operations		126,458			328,693
Other expense, net		(589	)		(4,680	)
Income before income taxes		125,869			324,013
Provision for income taxes		(45,916	)		(124,614	)
Net income	$	79,953		$	199,399
Net income per share of common stock:
Basic	$	0.01		$	0.02
Diluted	$	0.01		$	0.02
Weighted average number of common shares outstanding:
Basic		10,722,326			10,691,193
Diluted		10,804,989			10,811,295

See accompanying condensed notes to financial statements.

3

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(Unaudited)

	2016			2015
Operating revenues	$	9,530,462		$	9,330,561
Operating expenses:
Data and product costs		3,682,612			3,534,268
Selling, general and administrative expenses		5,781,867			5,006,033
Depreciation and amortization		148,026			167,655
Total operating expenses		9,612,505			8,707,956
Income (loss) from operations		(82,043	)		622,605
Other income, net		33,592			1,014
Income (loss) before income taxes		(48,451	)		623,619
Benefit from (provision for) income taxes		17,424			(242,641	)
Net income (loss)	$	(31,027	)	$	380,978
Net income (loss) per share of common stock:
Basic	$	0.00		$	0.04
Diluted	$	0.00		$	0.04
Weighted average number of common shares outstanding:
Basic		10,722,322			10,596,151
Diluted		10,722,322			10,773,801

See accompanying condensed notes to financial statements.

4

CREDITRISKMONITOR.COM, INC.

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(Unaudited)

	2016			2015
Cash flows from operating activities:
Net income (loss)	$	(31,027	)	$	380,978
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		148,026			167,655
Stock-based compensation		112,368			95,933
Unrealized (gain) loss on marketable securities		(27,777	)		37,292
Tax benefit from stock option plans		--			(31,912	)
Deferred taxes on income		(15,697	)		(37,801	)
Deferred rent		6,928			(820	)
Changes in operating assets and liabilities:
Accounts receivable		437,274			701,076
Other current assets		(130,547	)		(22,979	)
Prepaid and other assets		(12,677	)		(21,367	)
Deferred revenue		420,395			(281,884	)
Accounts payable		84,547			(25,681	)
Accrued expenses		8,441			(67,070	)
Net cash provided by operating activities		1,000,254			893,420
Cash flows from investing activities:
Purchase of marketable securities		(778	)		(12,753	)
Purchase of property and equipment		(156,359	)		(254,908	)
Net cash used in investing activities		(157,137	)		(267,661	)
Cash flows from financing activities:
Proceeds from exercise of stock options		--			39,584
Tax benefit from stock option plans		--			31,912
Net cash provided by financing activities		--			71,496
Net increase in cash and cash equivalents		843,117			697,255
Cash and cash equivalents at beginning of period		8,717,899			7,529,468
Cash and cash equivalents at end of period	$	9,561,016		$	8,226,723

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, 2015.

The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results of a full fiscal year.

The December 31, 2015 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, 2015 included in the Company’s Annual Report on Form 10-K.

The Company has identified certain immaterial errors in previously issued financial statements for the years ended December 31, 2015 and 2014 related to the accounting for non-qualified stock options. These immaterial errors resulted in a cumulative overstatement of its deferred tax liability and tax provision in the amount of $46,707 as well as a cumulative overstatement of additional paid-in capital and prepaid taxes in the amount of $194,054. The Company reviewed the accounting errors utilizing SEC Staff Accounting Bulletin No. 99, “Materiality” (“SAB 99”) and SEC Staff Accounting Bulletin No. 108, “Effects of Prior Year Misstatements on Current Year Financial Statements” (“SAB 108”) and determined the impact of the errors to be immaterial to any prior period’s presentation. The accompanying Balance Sheet as of December 31, 2015 reflects the corrections of the aforementioned immaterial error.

(2) Stock Split

On October 21, 2015, the Company’s Board of Directors authorized a 1.3-for-1 split of its common stock, in the form of a 30% stock dividend, payable to stockholders of record as of November 30, 2015. Shares resulting from the split were issued on December 15, 2015. All share and per share amounts for all prior periods presented have been retroactively adjusted to reflect the stock split.

(3) 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:

6

	3 Months Ended September 30,				9 Months Ended September 30,
	2016		2015		2016		2015
Data and product costs	$	8,738	$	2,945	$	26,029	$	8,835
Selling, general and administrative expenses		26,743		29,316		86,339		87,098
	$	35,481	$	32,261	$	112,368	$	95,933

(4) Other Recently Issued Accounting Standards

The Financial Accounting Standards Board and the SEC had issued certain accounting pronouncements as of September 30, 2016 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.

(5) 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 mutual funds.

The table below sets forth the Company’s cash and cash equivalents and marketable securities as of September 30, 2016 and December 31, 2015, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

	September 30, 2016								December 31, 2015
	Level 1		Level 2		Level 3		Total		Total
Cash and cash equivalents	$	9,561,016	$	-	$	-	$	9,561,016	$	8,717,899
Marketable securities		274,029		-		-		274,029		245,474
Total	$	9,835,045	$	-	$	-	$	9,835,045	$	8,963,373

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, 2016 or December 31, 2015.

7

(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:

	3 Months Ended September 30,						9 Months Ended September 30,
	2016			2015			2016		2015
Weighted average number of common shares outstanding – basic		10,722,326			10,691,193			10,722,322		10,596,151
Potential shares exercisable under stock option plans		360,450			232,700			--		340,817
LESS: Shares which could be repurchased under treasury stock method		(277,787	)		(112,598	)		--		(163,167	)
Weighted average number of common shares outstanding – diluted		10,804,989			10,811,295			10,722,322		10,773,801

Potential common shares of 60,900 and 114,660 related to the Company's outstanding stock options were excluded from the computation of diluted income per share for the 3 months ended September 30, 2016 and 2015, respectively, as inclusion of these shares would have been anti-dilutive. All outstanding stock options were excluded from the computation of diluted loss per share for the 9 months ended September 30, 2016 as they were anti-dilutive. For the 9 months ended September 30, 2015, the computation of diluted net income per share excludes the effects of the assumed exercise of 178,317 options, since their inclusion would be anti-dilutive as their exercise prices were above market value.

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Environment

Despite the continued strengthening of the U.S. economy, the continuing uncertainty in the worldwide financial system has negatively impacted general business conditions. It is possible that a weakened 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 2016 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 2016.

Financial Condition, Liquidity and Capital Resources

The following table presents selected financial information and statistics as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Cash, cash equivalents and marketable securities	$	9,835	$	8,963
Accounts receivable, net	$	1,490	$	1,927
Working capital	$	2,742	$	2,690
Cash ratio		1.06		1.02
Quick ratio		1.22		1.24
Current ratio		1.30		1.31

The Company has invested some of its excess cash in debt instruments of the United States Government and mutual funds. 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, 2016, the Company had $9.84 million in cash, cash equivalents and marketable securities, an increase of approximately $872,000 from December 31, 2015. The reason for this increase was that cash generated by operating activities ($1,000,000) exceeded the cash used to acquire property and equipment ($157,000).

The Company’s cash provided by operating activities was positive despite its net loss for the nine months primarily due to the 23% decrease in accounts receivable and the 6% increase in deferred revenue.Additionally, the main component of current liabilities at September 30, 2016 is deferred revenue of $7.86 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 9 of the last 10 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.

9

Off-Balance Sheet Arrangements

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

Results of Operations

	3 Months Ended September 30,
	2016						2015
	Amount			% of Total Operating Revenues			Amount			% of Total Operating Revenues
Operating revenues	$	3,237,687			100.00	%	$	3,153,249			100.00	%
Operating expenses:
Data and product costs		1,254,151			38.73	%		1,134,296			35.97	%
Selling, general and administrative expenses		1,808,184			55.85	%		1,635,790			51.88	%
Depreciation and amortization		48,894			1.51	%		54,470			1.73	%
Total operating expenses		3,111,229			96.09	%		2,824,556			89.58	%
Income from operations		126,458			3.91	%		328,693			10.42	%
Other expense, net		(589	)		(0.02	%)		(4,680	)		(0.14	%)
Income before income taxes		125,869			3.89	%		324,013			10.28	%
Provision for income taxes		(45,916	)		(1.42	%)		(124,614	)		(3.96	%)
Net income	$	79,953			2.47	%	$	199,399			6.32	%

Operating revenues increased $84,438, or 3%, for the three months ended September 30, 2016 compared to the same period of fiscal 2015. This overall revenue growth resulted from an increase in Internet subscription service revenue, attributable to increased sales to new and existing subscribers.

Data and product costs increased $119,855, or 11%, for the third quarter of 2016 compared to the same period of fiscal 2015. This increase was due primarily to higher salary and related employee benefits, as the Company increased its headcount.

Selling, general and administrative expenses increased $172,394, or 11%, for the third quarter of fiscal 2016 compared to the same period of fiscal 2015. This increase was due to higher marketing expenditures and higher salary and related employee benefits. The increase in marketing expenses is part of our 2016 plan to drive increased traffic to the Company’s website, and improve customers’ experience using the website, with the hope of incremental future sales. This is the Company’s first significant marketing campaign and it includes investment in a substantial redesign of the website, which was launched early in the second quarter.

Depreciation and amortization decreased $5,576, or 10%, for the third quarter of fiscal 2016 compared to the same period of fiscal 2015. This decrease was due to a lower depreciable asset base reflecting the continued use of certain items that have been fully depreciated. The increase in property and equipment, net since year end is due to a deposit made at the end of the first quarter for a new telephone system that was not installed until mid- September.

Other expense, net decreased $4,091 for third quarter of fiscal 2016 compared to the same period last year. This decrease was due to a smaller negative mark-to-market adjustment related to the Company’s investments recorded in this year’s third quarter.

Provision for income taxes decreased $78,698 for the third quarter of fiscal 2016 compared to the same period of fiscal 2015. This decrease was due to the Company having lower pre-tax income because of the reasons enumerated above.

10

	9 Months Ended September 30,
	2016						2015
	Amount			% of Total Operating Revenues			Amount			% of Total Operating Revenues
Operating revenues	$	9,530,462			100.00	%	$	9,330,561			100.00	%
Operating expenses:
Data and product costs		3,682,612			38.64	%		3,534,268			37.88	%
Selling, general and administrative expenses		5,781,867			60.67	%		5,006,033			53.65	%
Depreciation and amortization		148,026			1.55	%		167,655			1.80	%
Total operating expenses		9,612,505			100.86	%		8,707,956			93.33	%
Income (loss) from operations		(82,043	)		(0.86	%)		622,605			6.67	%
Other income, net		33,592			0.35	%		1,014			0.01	%
Income (loss) before income taxes		(48,451	)		(0.51	%)		623,619			6.68	%
Benefit from (provision for) income taxes		17,424			0.18	%		(242,641	)		(2.60	%)
Net income (loss)	$	(31,027	)		(0.33	%)	$	380,978			4.08	%

Operating revenues increased $199,901, or 2%, for the nine months ended September 30, 2016 compared to the same period of fiscal 2015. This overall revenue growth resulted from an increase in Internet subscription service revenue, attributable to increased sales to new and existing subscribers.

Data and product costs increased $148,344, or 4%, for the first nine months of 2016 compared to the same period of fiscal 2015. This increase was due primarily to higher salary and related employee benefits, as the Company increased its headcount, partially offset by the lower cost associated with the outsourcing of certain data entry tasks, as less tasks have been outsourced, and lower data costs, as the Company incurred the cost of a one-time feed in 2015.

Selling, general and administrative expenses increased $775,834, or 15%, for the first nine months of fiscal 2016 compared to the same period of fiscal 2015. This increase was due to higher marketing expenditures and higher salary and related employee benefits. The increase in marketing expenses is part of our 2016 plan to drive increased traffic to the Company’s website, and improve customers’ experience using the website, with the hope of incremental future sales. This is the Company’s first significant marketing campaign and it includes investment in a substantial redesign of the website, which was launched early in the second quarter.

Depreciation and amortization decreased $19,629 or 12%, for the first nine months of fiscal 2016 compared to the same period of fiscal 2015. This decrease was due to a lower depreciable asset base reflecting the continued use of certain items that have been fully depreciated. The increase in property and equipment, net since year end is due to a deposit made at the end of the first quarter for a new telephone system that was not installed until mid- September.

Other income, net increased $32,578 for first nine months of fiscal 2016 compared to the same period last year. This increase was due to a larger mark-to-market adjustment related to the Company’s investments recorded in this year’s first nine months.

Provision for income taxes decreased $260,065 for the first nine months of fiscal 2016 compared to the same period of fiscal 2015. This decrease was due to the Company being in a pre-tax loss position in 2016 versus a pre-tax income position in 2015 because of the reasons enumerated above.

11

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 and service staff, and to 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 increase in dollar amount and as a percentage of revenues during the remainder of 2016 and future periods as the Company continues to expand its business on a worldwide basis. Further, the Company expects that product development expenses and data costs will also continue to increase in dollar amount and may increase as a percentage of revenues during the remainder of 2016 and future periods because it expects to employ more development personnel on average compared to prior periods, obtain additional data and build the infrastructure required to support the development of new and improved products and services. However, as these expenditures are largely 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 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 Company’s ability to obtain products and services from its vendors, including information suppliers, on commercially reasonable terms, (vi) the Company’s ability to upgrade and develop its systems and infrastructure, and adapt to technological change, (vii) the Company’s ability to attract and retain personnel in a timely and effective manner, (viii) the Company’s ability to manage effectively its development of new business segments and markets, (ix) the Company’s ability to successfully manage the integration of operations and technology of acquisitions or other business combinations, (x) technical difficulties, system downtime or Internet brownouts, (xi) the amount and timing of operating costs and capital expenditures relating the Company’s business, operations and infrastructure, (xii) governmental regulation and taxation policies, (xiii) disruptions in service by common carriers due to strikes or otherwise, (xiv) risks of fire or other casualty, (xv) litigation costs or other unanticipated expenses, (xvi) interest rate risks and inflationary pressures, and (xvii) general economic conditions and economic conditions specific to the Internet and online commerce.

12

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, due to a material weakness in our internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of September 30, 2016. In light of the material weakness in internal control over financial reporting, we completed substantive procedures, including validating the completeness and accuracy of the underlying data used for accounting for income taxes, prior to filing this Quarterly Report on Form 10-Q.

These additional procedures have allowed us to conclude that, notwithstanding the material weakness in our internal control over financial reporting, the financial statements included in this report fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of September 30, 2016, we did not maintain effective monitoring and oversight of controls over the completeness, existence, accuracy and presentation and disclosure of our accounting for income taxes, including the income tax provision and related tax assets and liabilities. Specifically, there were errors in the tax accounting for incentive stock options resulting in errors in the calculation of certain deferred tax balances and incorrect balance sheet classification and disclosure of certain balances in the notes to the financial statements. These errors resulted in adjustments to our financial statements as of and for the year ended December 31, 2015.

The errors arising from the underlying deficiency are not material to the financial statements reported in any interim or annual period. However, this control deficiency could result in misstatements of the aforementioned accounts and disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected in a timely manner. Accordingly, we have determined that this control deficiency constitutes a material weakness.

Because of this material weakness, management concluded that we did not maintain effective internal control over financial reporting as of September 30, 2016, based on criteria described in Internal Control – Integrated Framework (2013) issued by COSO.

The Company is evaluating the material weakness and developing a plan of remediation to strengthen our overall internal control over accounting for income taxes. The remediation plan includes implementing additional monitoring controls through revising and formalizing the income tax review processes. The Company is committed to maintaining a strong internal control environment and believes that these remediation efforts will represent significant improvements in our controls. The Company has started to implement these steps, however, some of these steps will take time to be fully integrated and confirmed to be effective and sustainable. Additional controls may also be required over time. Until these remediation steps are fully implemented and tested, the material weakness described above will continue to exist.

Except as noted above, there has been no change in the Company’s internal control over financial reporting during the quarter ended September 30, 2016, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

13

PART II. OTHER INFORMATION

Item 6. Exhibits

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	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.
32.2	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, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (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.

14

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, 2016	By:	/s/ Lawrence Fensterstock
		Lawrence Fensterstock
		Chief Financial Officer &
		Principal Accounting Officer

15

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jerome S. Flum, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CreditRiskMonitor.com, Inc.;

2. 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;

3. 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. 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

d) 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

5. 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):

a) 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) 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.

Date: November 14, 2016	By:	/s/ Jerome S. Flum
		Jerome S. Flum
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lawrence Fensterstock, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CreditRiskMonitor.com, Inc.;

2. 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;

3. 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. 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

d) 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

5. 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):

a) 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) 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.

Date: November 14, 2016	By:	/s/ Lawrence Fensterstock
		Lawrence Fensterstock
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

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

In connection with the Quarterly Report of CreditRiskMonitor.com, Inc. on Form 10-Q for the period ended September 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jerome S. Flum, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(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
November 14, 2016

This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section.

EX-32.2

EXHIBIT 32.2

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

In connection with the Quarterly Report of CreditRiskMonitor.com, Inc. on Form 10-Q for the period ended September 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lawrence Fensterstock, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(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
November 14, 2016

This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 30, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	CREDITRISKMONITOR COM INC
Entity Central Index Key	0000315958
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,722,401
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016

XML

BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 9,561,016	$ 8,717,899
Marketable securities	274,029	245,474
Accounts receivable, net of allowance	1,490,154	1,927,428
Other current assets	686,418	555,871
Total current assets	12,011,617	11,446,672
Property and equipment, net	403,359	395,026
Goodwill	1,954,460	1,954,460
Prepaid and other assets	46,676	33,999
Total assets	14,416,112	13,830,157
Current liabilities:
Deferred revenue	7,857,159	7,436,764
Accounts payable	162,814	78,267
Accrued expenses	1,249,758	1,241,317
Total current liabilities	9,269,731	8,756,348
Deferred taxes on income	743,757	759,454
Other liabilities	11,242	4,314
Total liabilities	10,024,730	9,520,116
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 and 10,722,321 shares, respectively	107,224	107,223
Additional paid-in capital	29,392,158	29,279,791
Accumulated deficit	(25,108,000)	(25,076,973)
Total stockholders' equity	4,391,382	4,310,041
Total liabilities and stockholders' equity	$ 14,416,112	$ 13,830,157

XML

BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
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	10,722,321
Common stock, outstanding (in shares)	10,722,401	10,722,321

XML

STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
Operating revenues	$ 3,237,687	$ 3,153,249	$ 9,530,462	$ 9,330,561
Operating expenses:
Data and product costs	1,254,151	1,134,296	3,682,612	3,534,268
Selling, general and administrative expenses	1,808,184	1,635,790	5,781,867	5,006,033
Depreciation and amortization	48,894	54,470	148,026	167,655
Total operating expenses	3,111,229	2,824,556	9,612,505	8,707,956
Income (loss) from operations	126,458	328,693	(82,043)	622,605
Other income (expense), net	(589)	(4,680)	33,592	1,014
Income (loss) before income taxes	125,869	324,013	(48,451)	623,619
Benefit from (provision for) income taxes	(45,916)	(124,614)	17,424	(242,641)
Net income (loss)	$ 79,953	$ 199,399	$ (31,027)	$ 380,978
Net income (loss) per share of common stock:
Basic (in dollars per share)	$ 0.01	$ 0.02	$ 0	$ 0.04
Diluted (in dollars per share)	$ 0.01	$ 0.02	$ 0	$ 0.04
Weighted average number of common shares outstanding:
Basic (in shares)	10,722,326	10,691,193	10,722,322	10,596,151
Diluted (in shares)	10,804,989	10,811,295	10,722,322	10,773,801

XML

STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income (loss)	$ (31,027)	$ 380,978
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	148,026	167,655
Stock-based compensation	112,368	95,933
Unrealized (gain) loss on marketable securities	(27,777)	37,292
Tax benefit from stock option plans	0	(31,912)
Deferred taxes on income	(15,697)	(37,801)
Deferred rent	6,928	(820)
Changes in operating assets and liabilities:
Accounts receivable	437,274	701,076
Other current assets	(130,547)	(22,979)
Prepaid and other assets	(12,677)	(21,367)
Deferred revenue	420,395	(281,884)
Accounts payable	84,547	(25,681)
Accrued expenses	8,441	(67,070)
Net cash provided by operating activities	1,000,254	893,420
Cash flows from investing activities:
Purchase of marketable securities	(778)	(12,753)
Purchase of property and equipment	(156,359)	(254,908)
Net cash used in investing activities	(157,137)	(267,661)
Cash flows from financing activities:
Proceeds from exercise of stock options	0	39,584
Tax benefit from stock option plans	0	31,912
Net cash provided by financing activities	0	71,496
Net increase in cash and cash equivalents	843,117	697,255
Cash and cash equivalents at beginning of period	8,717,899	7,529,468
Cash and cash equivalents at end of period	$ 9,561,016	$ 8,226,723

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2016

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, 2015.

The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results of a full fiscal year.

The December 31, 2015 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, 2015 included in the Company’s Annual Report on Form 10-K.

The Company has identified certain immaterial errors in previously issued financial statements for the years ended December 31, 2015 and 2014 related to the accounting for non-qualified stock options. These immaterial errors resulted in a cumulative overstatement of its deferred tax liability and tax provision in the amount of $46,707 as well as a cumulative overstatement of additional paid-in capital and prepaid taxes in the amount of $194,054. The Company reviewed the accounting errors utilizing SEC Staff Accounting Bulletin No. 99, “Materiality” (“SAB 99”) and SEC Staff Accounting Bulletin No. 108, “Effects of Prior Year Misstatements on Current Year Financial Statements” (“SAB 108”) and determined the impact of the errors to be immaterial to any prior period’s presentation. The accompanying Balance Sheet as of December 31, 2015 reflects the corrections of the aforementioned immaterial error.

XML

Stock Split

9 Months Ended

Sep. 30, 2016

Stock Split [Abstract]

Stock Split

(2) Stock Split

On October 21, 2015, the Company’s Board of Directors authorized a 1.3-for-1 split of its common stock, in the form of a 30% stock dividend, payable to stockholders of record as of November 30, 2015. Shares resulting from the split were issued on December 15, 2015. All share and per share amounts for all prior periods presented have been retroactively adjusted to reflect the stock split.

XML

Stock-Based Compensation

9 Months Ended

Sep. 30, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(3) 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 September 30,				9 Months Ended September 30,
	2016		2015		2016		2015
Data and product costs	$	8,738	$	2,945	$	26,029	$	8,835
Selling, general and administrative expenses		26,743		29,316		86,339		87,098
	$	35,481	$	32,261	$	112,368	$	95,933

XML

Other Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2016

Other Recently Issued Accounting Standards [Abstract]

Other Recently Issued Accounting Standards

(4) Other Recently Issued Accounting Standards

The Financial Accounting Standards Board and the SEC had issued certain accounting pronouncements as of September 30, 2016 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.

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Measurements [Abstract]

Fair Value Measurements

(5) 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 mutual funds.

The table below sets forth the Company’s cash and cash equivalents and marketable securities as of September 30, 2016 and December 31, 2015, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

	September 30, 2016								December 31, 2015
	Level 1		Level 2		Level 3		Total		Total
Cash and cash equivalents	$	9,561,016	$	-	$	-	$	9,561,016	$	8,717,899
Marketable securities		274,029		-		-		274,029		245,474
Total	$	9,835,045	$	-	$	-	$	9,835,045	$	8,963,373

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, 2016 or December 31, 2015.

XML

Net Income (Loss) per Share

9 Months Ended

Sep. 30, 2016

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:

	3 Months Ended September 30,						9 Months Ended September 30,
	2016			2015			2016		2015
Weighted average number of common shares outstanding – basic		10,722,326			10,691,193			10,722,322		10,596,151
Potential shares exercisable under stock option plans		360,450			232,700			--		340,817
LESS: Shares which could be repurchased under treasury stock method		(277,787	)		(112,598	)		--		(163,167	)
Weighted average number of common shares outstanding – diluted		10,804,989			10,811,295			10,722,322		10,773,801

Potential common shares of 60,900 and 114,660 related to the Company's outstanding stock options were excluded from the computation of diluted income per share for the 3 months ended September 30, 2016 and 2015, respectively, as inclusion of these shares would have been anti-dilutive. All outstanding stock options were excluded from the computation of diluted loss per share for the 9 months ended September 30, 2016 as they were anti-dilutive. For the 9 months ended September 30, 2015, the computation of diluted net income per share excludes the effects of the assumed exercise of 178,317 options, since their inclusion would be anti-dilutive as their exercise prices were above market value.

XML

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

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 the three and nine months ended September 30:

	3 Months Ended September 30,				9 Months Ended September 30,
	2016		2015		2016		2015
Data and product costs	$	8,738	$	2,945	$	26,029	$	8,835
Selling, general and administrative expenses		26,743		29,316		86,339		87,098
	$	35,481	$	32,261	$	112,368	$	95,933

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Measurements [Abstract]

Cash and Cash Equivalents and Marketable Securities Measured at Fair Value on Recurring Basis

The table below sets forth the Company’s cash and cash equivalents and marketable securities as of September 30, 2016 and December 31, 2015, respectively, which are measured at fair value on a recurring basis by level within the fair value hierarchy.

	September 30, 2016								December 31, 2015
	Level 1		Level 2		Level 3		Total		Total
Cash and cash equivalents	$	9,561,016	$	-	$	-	$	9,561,016	$	8,717,899
Marketable securities		274,029		-		-		274,029		245,474
Total	$	9,835,045	$	-	$	-	$	9,835,045	$	8,963,373

XML

Net Income (Loss) per Share (Tables)

9 Months Ended

Sep. 30, 2016

Net Income (Loss) per Share [Abstract]

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:

	3 Months Ended September 30,						9 Months Ended September 30,
	2016			2015			2016		2015
Weighted average number of common shares outstanding – basic		10,722,326			10,691,193			10,722,322		10,596,151
Potential shares exercisable under stock option plans		360,450			232,700			--		340,817
LESS: Shares which could be repurchased under treasury stock method		(277,787	)		(112,598	)		--		(163,167	)
Weighted average number of common shares outstanding – diluted		10,804,989			10,811,295			10,722,322		10,773,801

XML

Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
Deferred Tax Liability and Tax Provision [Member]
Quantifying Misstatement in Current Year Financial Statements [Line Items]
Cumulative overstatement, amount	$ 46,707
Additional Paid-in Capital and Prepaid Taxes [Member]
Quantifying Misstatement in Current Year Financial Statements [Line Items]
Cumulative overstatement, amount	$ 194,054

XML

Stock Split (Details)		9 Months Ended
	Oct. 21, 2015	Sep. 30, 2016
Stock Split [Abstract]
Stock split ratio applied	1.3
Stock dividend issued as common stock		30.00%
Dividends payable, date of record		Nov. 30, 2015

XML

Stock-Based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Stock-based compensation expense for stock options [Abstract]
Stock-based compensation expense	$ 35,481	$ 32,261	$ 112,368	$ 95,933
Data and Product Costs [Member]
Stock-based compensation expense for stock options [Abstract]
Stock-based compensation expense	8,738	2,945	26,029	8,835
Selling, General and Administrative Expenses [Member]
Stock-based compensation expense for stock options [Abstract]
Stock-based compensation expense	$ 26,743	$ 29,316	$ 86,339	$ 87,098

XML

Fair Value Measurements (Details) - Recurring [Member] - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Cash and cash equivalents and marketable securities measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	$ 9,561,016	$ 8,717,899
Marketable securities	274,029	245,474
Total	9,835,045	$ 8,963,373
Level 1 [Member]
Cash and cash equivalents and marketable securities measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	9,561,016
Marketable securities	274,029
Total	9,835,045
Level 2 [Member]
Cash and cash equivalents and marketable securities measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	0
Marketable securities	0
Total	0
Level 3 [Member]
Cash and cash equivalents and marketable securities measured at fair value on recurring basis [Abstract]
Cash and cash equivalents	0
Marketable securities	0
Total	$ 0

XML

Net Income (Loss) per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net Income (Loss) per Share [Abstract]
Weighted average number of common shares outstanding - basic (in shares)	10,722,326	10,691,193	10,722,322	10,596,151
Potential shares exercisable under stock option plans (in shares)	360,450	232,700	0	340,817
LESS: Shares which could be repurchased under treasury stock method (in shares)	(277,787)	(112,598)	0	(163,167)
Weighted average number of common shares outstanding - diluted (in shares)	10,804,989	10,811,295	10,722,322	10,773,801
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	60,900	114,660		178,317