CreditRiskMonitor.com to Restate Financials Over Unpaid State Taxes

What happened

CreditRiskMonitor.com, Inc. (ticker: CRMZ), a provider of credit risk and business information services, disclosed in an 8-K filing on August 6, 2026, that its financial statements for several prior periods should no longer be relied upon.

The company said its audit committee, after discussions with management and its independent auditor CohnReznick LLP, reached this conclusion on August 3, 2026. The affected periods are the quarters ended June 30, 2025, September 30, 2025 and 2024, and March 31, 2026 and 2025, as well as the fiscal years ended December 31, 2025 and 2024.

The company plans to restate those financial statements. It identified the cause as a failure to collect and remit sales and use tax and file income taxes in certain state and local jurisdictions where it had economic and physical presence, a matter uncovered during a "nexus study" with an external tax advisor.

As of the filing date, the company estimated a sales tax liability of approximately $1.767 million (including interest) and an income tax liability of approximately $210,000 (including interest). These are preliminary estimates that could change as the review continues.

CreditRiskMonitor.com also disclosed a material weakness in its internal control over financial reporting, saying its controls and disclosure procedures related to identifying, monitoring, and evaluating state and local tax nexus requirements were ineffective. Management has begun a remediation plan.

Company background

CreditRiskMonitor.com is a Nevada-incorporated company that provides credit risk analysis and business information, primarily serving the consumer credit reporting and collection agency sectors. The company operates as a remote-only business with no physical headquarters.

For its most recent annual period ended December 31, 2025, the company reported revenue of approximately $20.1 million. Its stock closed at $2.10 on August 6, 2026, down 2.33% from the prior close of $2.15.

What this means

This is an 8-K filing under Item 4.02, which companies use to notify investors that previously issued financial statements can no longer be relied upon. Such a filing usually signals a restatement or a likely restatement, meaning the numbers in prior reports may change.

Nexus refers to the level of connection a business has to a state that obligates it to collect sales tax or file income tax there. The company says it had economic and physical nexus in places where it was not meeting those obligations, leading to unpaid taxes and interest.

The restatement is expected to affect several line items: accrued liabilities, income tax liabilities, retained earnings, selling general and administrative expenses, interest expense, and income tax expense. These are the accounts where tax obligations typically surface.

The material weakness in internal controls means the company's processes for catching such tax obligations were not effective. The company says it has a remediation plan and will include its conclusions about internal controls in its 2026 annual report on Form 10-K.

Investors should expect revised financial figures for the affected periods once the restatement is completed. The company noted that the review is ongoing and that the estimates could change as more information becomes available.