OTC:CRMZ
CREDITRISKMONITOR COM INC
A niche OTC provider of credit risk analytics software and data services helping financial firms optimize loan monitoring and regulatory compliance.
Key Metrics
Investment Thesis
Bull Case
The consistent revenue expansion over the last three years and stable net income suggest a healthy core business model with predictable recurring revenue streams typical in the financial services software sector. The company maintains a positive operating profit margin relative to its small asset base, indicating operational efficiency that could support future growth if capital expenditures are optimized.
Bear Case
Investors should be wary of the substantial cash burn and the negative change in cash position which signals potential solvency issues or aggressive spending on fixed assets that may not yet yield proportional returns. The significant retained earnings deficit and heavy reliance on paid-in capital rather than organic equity growth raises questions about the sustainability of current operations without external financing.
About CREDITRISKMONITOR COM INC
CreditRiskMonitor provides specialized credit risk monitoring solutions and data analytics services to financial institutions and corporate entities seeking to mitigate loan default exposure. The company generates revenue through subscription-based software platforms, custom reporting modules, and advisory consulting for portfolio management across the banking and fintech sectors. Key products include real-time risk scoring engines and regulatory compliance dashboards designed to streamline credit assessment workflows.
Analysis
Management Discussion
The company reported steady revenue growth from $18.0M in 2022 to $19.8M in 2024, while net income stabilized at $1.7M after a slight increase in 2023. However, the balance sheet shows a concerning shift with ending cash dropping to $6.7M from a beginning balance of $11.0M, driven largely by investing outflows of $7.2M which significantly offset operating cash generation of $2.9M.
Industry Overview
The financial technology sector is experiencing rapid digitization where banks increasingly outsource complex risk management functions to specialized vendors to meet regulatory requirements like Basel III. Companies in this space must balance high data privacy standards with the need for real-time analytics, creating a barrier to entry that favors established players with robust security protocols.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $18.0M | $18.9M | $19.8M |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $18.0M | $18.9M | $19.8M |
| Operating Expenses | $16.4M | $17.4M | $18.6M |
| Operating Income | $1.6M | $1.5M | $1.2M |
| G&A | $9.0M | $9.2M | $9.5M |
| Stock-Based Comp | $80.4K | $103.1K | $99.0K |
| D&A | $382.3K | $383.8K | $402.0K |
| Other OpEx | $7.4M | $8.2M | $9.0M |
| Non-Operating Income | $180.8K | $715.3K | $918.6K |
| Pre-Tax Income | $1.8M | $2.2M | $2.2M |
| Income Tax | $392.0K | $512.4K | $493.2K |
| Continuing Ops | $1.4M | $1.7M | $1.7M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $1.4M | $1.7M | $1.7M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $1.4M | $1.7M | $1.7M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $18.1M | $19.2M | $13.7M |
| Cash & Equivalents | $9.9M | $11.0M | $6.7M |
| Accounts Receivable | $3.5M | $3.9M | $3.6M |
| Other Current Assets | $4.7M | $4.3M | $3.4M |
| Long-Term Assets | $4.4M | $4.8M | $11.2M |
| PP&E (Net) | $481.8K | $557.6K | $497.6K |
| Goodwill | $2.0M | $2.0M | $2.0M |
| Operating Leases | $1.8M | $1.6M | $0 |
| Other LT Assets | $163.5K | $718.1K | $8.8M |
| Total Assets | $22.5M | $24.1M | $24.9M |
| Current Liabilities | $12.6M | $12.7M | $13.1M |
| Accounts Payable | $245.9K | $142.0K | $319.7K |
| Current Leases | $194.0K | $211.5K | $0 |
| Other Current Liab | $10.0M | $10.3M | $10.9M |
| Long-Term Liabilities | $2.3M | $2.0M | $632.9K |
| LT Operating Leases | $1.8M | $1.6M | $0 |
| Other LT Liab | $495.9K | $419.1K | $632.9K |
| Total Liabilities | $14.9M | $14.7M | $13.8M |
| Shareholders' Equity | $7.6M | $9.4M | $11.1M |
| Paid-In Capital | $29.9M | $30.0M | $30.1M |
| Retained Earnings | $-22.4M | $-20.7M | $-19.1M |
| Total L&E | $22.5M | $24.1M | $24.9M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $1.4M | $1.7M | $1.7M |
| Non-Cash Adjustments | $-1.3M | $-806.3K | $683.0K |
| Working Capital Changes | $1.7M | $560.6K | $514.0K |
| Cash from Operations | $1.7M | $1.4M | $2.9M |
| Capital Expenditures | $258.0K | $303.9K | $378.7K |
| Cash from Investing | $-4.3M | $-311.0K | $-7.2M |
| Cash from Financing | $0 | $0 | $0 |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-2.5M | $1.1M | $-4.3M |
| Beginning Cash | $12.4M | $9.9M | $11.0M |
| Ending Cash | $9.9M | $11.0M | $6.7M |
Frequently Asked Questions
How does CREDITRISKMONITOR COM INC make money?
Core software licensing revenue from credit risk monitoring platforms, custom data feed subscriptions for institutional clients, and professional consulting fees for regulatory compliance projects and system implementation.
What are the main risks for CRMZ?
Severe liquidity constraints evidenced by a negative net cash change of $4.3M despite positive operating cash flow, indicating heavy capital expenditures or other investing outflows, significant accumulated retained earnings deficit of $19.1M suggesting past losses or aggressive stock buybacks/dividends not seen in current data, reliance on a narrow OTC market with limited analyst coverage and liquidity for the CRZ ticker, and potential concentration risk if major banking clients reduce subscription spend.
What is CRMZ's competitive advantage?
Specialized domain expertise in non-standardized credit risk modeling that large generalist competitors cannot easily replicate, a proprietary dataset of historical default patterns enhancing algorithm accuracy, and low-cost operational structure typical of OTC companies allowing higher margin retention.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.