CreditRiskMonitor.com, Inc. (CRMZ) flags restatement and $1,767 thousand tax hit
Rhea-AI Filing Summary
CreditRiskMonitor.com, Inc. determined, after a nexus study with an external tax advisor, that it has economic and physical tax nexus in additional state and local jurisdictions where it had not been collecting or remitting sales and use tax or filing income taxes. The audit committee concluded that unaudited quarterly financial statements for periods ended June 30, 2025, September 30, 2025 and 2024, and March 31, 2026 and 2025, as well as audited statements for the years ended December 31, 2025 and 2024, should no longer be relied upon.
The company plans to restate these periods and currently expects to record a preliminary sales tax liability of approximately $1,767 thousand and an income tax liability of approximately $210 thousand, including interest. The adjustments are expected to affect accrued and income tax liabilities, retained earnings, selling, general and administrative expenses, interest expense and income tax expense. Management identified a material weakness in internal control over financial reporting and disclosure controls related to monitoring state and local tax nexus and has developed a remediation plan, with further conclusions to be described in the 2026 Form 10-K.
Positive
- None.
Negative
- Non-reliance and restatement of previously issued quarterly and annual financial statements for multiple periods, including fiscal years ended December 31, 2025 and 2024.
- Expectation to record additional sales tax liability of approximately $1,767 thousand and income tax liability of approximately $210 thousand, including interest.
- Identification of a material weakness in internal control over financial reporting and ineffective disclosure controls related to state and local tax nexus requirements.
8-K Event Classification
Item 4.02 — Non-Reliance on Previously Issued Financial Statements or a Related Audit Report
1 item
Item 4.02
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report
Governance
Previously issued financial statements should no longer be relied upon due to errors or restatements.
Key Figures
Sales tax liability: approximately $1,767 thousand
Income tax liability: approximately $210 thousand
Affected fiscal years: 2025 and 2024
+2 more
5 metrics
Sales tax liability
approximately $1,767 thousand
Preliminary sales tax plus interest expected to be recorded following nexus study
Income tax liability
approximately $210 thousand
Preliminary income tax plus interest expected to be recorded for Affected Periods
Affected fiscal years
2025 and 2024
Audited financial statements for years ended December 31, 2025 and 2024 to be restated
Audit committee determination date
August 3, 2026
Date audit committee concluded prior financial statements should no longer be relied upon
Report signature date
August 6, 2026
Date the current report was signed by the Chief Executive Officer
Key Terms
nexus study, material weakness, internal control over financial reporting, disclosure controls and procedures, +1 more
5 terms
nexus study regulatory
"In connection with a nexus study conducted with an external tax advisor,"
material weakness regulatory
"the Company has identified a material weakness in the Company’s internal control"
A material weakness is a significant flaw in the systems and checks a company uses to ensure its financial reports are accurate, meaning errors or fraud could happen and not be caught. For investors it matters because it raises the risk that reported results are unreliable—similar to finding a hole in a ship’s hull—potentially leading to corrected financials, regulatory action, reduced trust, and negative effects on stock value and borrowing costs.
internal control over financial reporting regulatory
"in the Company’s internal control over financial reporting and concluded that its internal"
Internal control over financial reporting is a company’s system of procedures and checks designed to make sure its financial statements are accurate and complete, like a set of guardrails and verification steps that catch mistakes or fraud before numbers are published. Investors care because strong controls make reported results more trustworthy, lower the risk of surprise restatements or regulatory problems, and give greater confidence when valuing the company or comparing it to peers.
disclosure controls and procedures regulatory
"internal control over financial reporting and disclosure controls and procedures related to the"
Policies, routines and internal checks a public company uses to identify, collect and verify information that must appear in its financial reports and public filings, and to make sure that material news is disclosed accurately and on time. Investors care because effective controls increase confidence that the company’s reported numbers and disclosures are reliable and reduce the risk of surprises, much like a building’s inspection and alarm system helps occupants trust the structure’s safety.
forward-looking statements regulatory
"Forward-Looking Statements This on may contain “forward-looking statements” within the meaning"
Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What did CreditRiskMonitor.com, Inc. (CRMZ) say about its past financial statements?
CreditRiskMonitor.com, Inc. stated that previously issued financial statements for several 2024–2026 quarters and the fiscal years ended December 31, 2025 and 2024 should no longer be relied upon. The company plans to restate these Affected Periods following a tax nexus review.
Why is CRMZ restating its financial statements?
CRMZ is restating its financials after a nexus study with an external tax advisor showed it had economic and physical nexus in additional jurisdictions. In those places it had not been collecting or remitting sales and use tax or filing income taxes, affecting prior-period results.
What new tax liabilities does CRMZ expect to record from this issue?
CRMZ currently expects to record a preliminary sales tax liability of approximately $1,767 thousand including interest and an income tax liability of approximately $210 thousand including interest. These amounts are estimates and may change as the company’s review continues.
What internal control problems did CRMZ identify in this 8-K?
The company identified a material weakness in internal control over financial reporting and concluded that controls and procedures related to identifying, monitoring and evaluating state and local tax nexus were ineffective. Management has created a remediation plan to address this weakness.
Which future filings did CRMZ reference regarding this control weakness?
CRMZ indicated that management’s conclusions about the impact of this issue on internal control over financial reporting will be included in its 2026 Annual Report on Form 10-K. The company also cited potential implications for future required periodic reports in its forward-looking statements.
Which reporting periods for CRMZ are affected by the planned restatement?
The Affected Periods include unaudited quarters ended March 31, 2026 and 2025, June 30, 2025, and September 30, 2025 and 2024, plus audited financial statements for the fiscal years ended December 31, 2025 and 2024, all of which will be restated.