CreditRiskMonitor Announces Second Quarter Results
Rhea-AI Summary
CreditRiskMonitor (OTCQX:CRMZ) reported second quarter fiscal 2026 revenue of $5.2 million, up about 2% year over year, but posted an operating loss of approximately $664 thousand versus a loss of about $8 thousand a year earlier. Net results shifted to a $475 thousand loss from $135 thousand income.
Management recorded an estimated $2 million sales tax liability and $210 thousand income tax liability after a nexus review, and will restate prior results. The company disclosed a material weakness in internal controls over state and local tax nexus and is pursuing Voluntary Disclosure Agreements and an automated tax solution. Despite the charges, CreditRiskMonitor reported approximately $17.8 million in cash, cash equivalents and short-term Treasuries plus about $1 million in non-current Treasuries and no debt. Management highlighted stable underlying subscription business trends, growing trade contributor data, new AI-enabled workflows, and product integrations supporting long-term growth initiatives.
Positive
- Revenue $5.2 million, approximately 2% year-over-year growth in Q2 2026
- Cash and liquid investments ~$18.8 million with no debt, supporting tax payments
- Sales tax liabilities addressed through Voluntary Disclosure Agreements to limit lookback periods and penalties
- Expanding trade contributor program with approximately $3 trillion in annualized transaction data
- Growing demand signals for SupplyChainMonitor and AI-enabled connectors and workflows
Negative
- Operating loss ~$664 thousand in Q2 2026 vs. ~$8 thousand loss in 2025
- Net loss ~$475 thousand in Q2 2026 vs. ~$135 thousand net income prior year
- Sales and income tax liabilities recorded of about $2.21 million, reducing equity
- Material weakness identified in internal control over state and local tax nexus
- Financial restatement required due to revised sales and income tax obligations
AI-generated analysis. How Rhea-AI works. Not financial advice.
TARRYTOWN, NY / ACCESS Newswire / August 19, 2026 / CreditRiskMonitor.com, Inc. (OTCQX:CRMZ) reported revenues of
Mike Flum, CEO, said, "I want to start by addressing the restatement directly. Upon management's initiative, the Company commissioned a nexus study with an external tax advisor and determined that it had established economic and physical nexus in state and local jurisdictions in which it had not been collecting and remitting sales and use tax or filing income tax returns. We have recorded a sales tax liability of approximately
Concurrently, we identified a material weakness in our internal control over financial reporting related to the identification and monitoring of state and local tax nexus. Although the Company had not received an audit notice, assessment, non-compliance notice, notice of deficiency, or any other communication from any taxing authority indicating that sales tax was due, we elected to submit Voluntary Disclosure Agreements ("VDAs") as a pre-emptive, voluntary compliance action to satisfy potential sales tax and income tax exposure.
The VDA process limits lookback periods while eliminating penalty assessments, and the Company is in various stages of review, submission, acceptance, and payment with each impacted state. Management has also developed a remediation plan for the material weakness, including engaging an independent third-party provider of automated sales tax solutions. That system is designed to continuously identify, monitor, and evaluate our transaction activity and physical presence, with the objective of determining when we are approaching qualifying thresholds in new jurisdictions so we can register, file, and remit accordingly. We will also be evaluating our ability to recover sales and use tax payments made to states that were previously remitted by our clients as part of their own compliance processes. At this time, our focus is on closing VDAs.
If we ran a less conservative balance sheet with significantly fewer liquid assets, like most
The restatement aside, the underlying business is healthy. Retention is strengthening under our new Client Success model, and the playbooks we have built are lifting performance across customer cohorts. Our trade contributor program is experiencing an uptick from direct outreach, marketing campaigns, and our SOC 2 Type I certification. This expansion is particularly interesting as trade providers have higher retention rates, prospects who trial with trade data have high close rates, and growing our trade file directly adds to coverage, improving our services for all users.
Our new Solutions team is finding real demand for collections prioritization and credit limit recommendation workflows, along with our native connectors into leading software and intelligence platforms. On the product development front, our connectors for large language models drew significant client interest and positive feedback when demonstrated at major national events like the NACM's 130th Credit Congress & Expo and the Credit Research Foundation's 2026 August Forum & EXPO. This response was an important piece of market feedback as we move further towards Data and Intelligence-as-a-Service business models. We are enthusiastic about our partnerships in the A/R management and Credit Application spaces as accretive revenue channels, with a particular highlight on our July announcement regarding native integration with Nuvo, putting our risk intelligence inside an agentic order-to-cash network.
Finally, our internal experimentation with AI and automation continues to unlock cost and capacity across Quality Assurance, Engineering, Product, Data Science, Marketing, and Revenue. Several workflows are now migrating into production, and AI-assisted coding has become a routine part of our development practice. Upfront, I want to be clear: it is at best a guess when all of these changes will show a clear degree of impact on revenue and cost. These specific unknowns are part and parcel of navigating new technologies, and we don't claim to have a crystal ball on timing or magnitude.
We believe that the macroeconomic environment continues to move in our direction. Large U.S. corporate bankruptcies reached 372 in the first half of 2026, the highest first-half total in sixteen years, while small business filings rose
Reported corporate earnings are increasingly dependent on non-operating items: unrealized gains on equity stakes accounted for
Private credit is showing the strain we flagged last year, with defaults at the largest managers at their highest levels since at least 2021 and nontraded funds paying out more in redemptions than they take in. What concerns us more is that the disclosed numbers keep proving more favorable than the underlying condition, whether in non-accrual rates that omit borrowers' other debt, liquidity metrics with no standard definition, or the off-balance-sheet commitments described above. Cutting through that gap is the entire premise of what we do. Our PAYCE® Score flagged elevated risk at Tricolor and First Brands more than a year before either filing, and we expect more of the same as this cycle develops. When asset prices and counterparty fundamentals diverge to this degree, our intelligence delivers meaningful value to our clients.
Financial and geopolitical risk remain top concerns for the companies we serve, which continues to drive demonstrations and pipeline, particularly for our SupplyChainMonitor™ product. As always, our north star remains delivering subscription services whose value exceeds their cost to our clients."
A full copy of the financial statements can be found at https://crmz.ir.edgar-online.com/
Overview
CreditRiskMonitor.com, Inc. (creditriskmonitor.com) sells a suite of web-based, SaaS subscription products providing access to comprehensive commercial credit reports, bankruptcy risk analytics, financial and payment information, and curated news on public and private companies worldwide. Our primary SaaS subscription products for analyzing commercial financial risk are CreditRiskMonitor® and SupplyChainMonitor™. These products help corporate credit and procurement professionals stay ahead of and manage financial risk more quickly, accurately, and cost-effectively. Our subscribers include nearly
To help subscribers prioritize and monitor counterparty financial risk, our SaaS platforms offer the proprietary FRISK® and PAYCE® Scores as well as the FAST Rating, the well-known Altman Z"-Score, agency ratings from key Nationally Recognized Statistical Rating Organizations ("NRSROs"), curated news, and detailed financial spreads & ratios. Our FRISK® and PAYCE® Scores are financial distress classification models that measure a business's probability of bankruptcy within a year. The FRISK® score also includes a risk signal based on the aggregate research behaviors of our subscribers, who control counterparty access to trade credit at some of the most sophisticated companies in the world. The inclusion of this risk signal boosts the overall accuracy of this bankruptcy analytic by lowering the false positive rate for the riskiest corporations.
Through its Trade Contributor Program, the Company receives monthly confidential accounts receivables data from hundreds of subscribers and non-subscribers, which it parses, processes, aggregates, and reports to summarize the invoice payment behavior of B2B counterparties without disclosing the specific contributors of this information. The size of the Trade Contributor Program's current annualized trade credit transaction data is approximately
Safe Harbor Statement
Certain statements in this press release, including statements prefaced by the words "anticipates", "estimates", "believes", "expects" or words of similar meaning, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include details of the accounting restatement, the expected impact of the accounting restatement and the remediation of the related material weakness in internal control over financial reporting. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, expectations or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including, among others, those risks, uncertainties and factors referenced from time to time as "risk factors" or otherwise in the Company's Registration Statements or Securities and Exchange Commission Reports. There can be no assurance that (i) the consequences of the Company's restated results will be as anticipated above and (ii) the Company will be able to promptly and efficiently implement the appropriate remediation steps into its financial reporting. We disclaim any intention or obligation to revise any forward-looking statements, whether as a result of new information, a future event, or otherwise.
CONTACT:
CreditRiskMonitor.com, Inc.
Mike Flum, Chief Executive Officer
(845) 230-3037
ir@creditriskmonitor.com
SOURCE: CreditRiskMonitor.com, Inc.
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