CreditRiskMonitor Announces 2023 Results

VALLEY COTTAGE, N.Y. - March 21, 2024 - CreditRiskMonitor (OTCQX: CRMZ) reported revenues of $18.9 million, an increase of approximately $953 thousand or 5%, for the year ended December 31, 2023, as compared to 2022. The Company reported operating income of approximately $1.49 million, a decrease of approximately $79 thousand for 2023 as compared to 2022. The decrease in operating margin was primarily due to increased data and product costs related to the SupplyChainMonitor™ product that preceded corresponding revenue gains. The Company reported net income of approximately $1.70 million, an increase of approximately $335 thousand for 2023 as compared to 2022.

Mike Flum, CEO, said, "In the second half of 2023, CreditRiskMonitor experienced renewed interest in our namesake CreditRiskMonitor® product, due to a rebound in bankruptcy rates to more typical levels after the historical lows of 2021 and 2022. We're also starting to see more sales engagement with our new SupplyChainMonitor™ product as we've continued to refine our sales process while expanding our outreach. The high renewal rate for our initial SupplyChainMonitor™ subscribers validates its utility for early adopters while the expanded interest from prospects confirms its market fit. We are encouraged to see the results of all our revenue team's hard work in building a robust sales pipeline.

Looking ahead to 2024, we are optimistic. The ongoing macroeconomic and geopolitical challenges underscore the need for B2B financial risk analysis, fueling demand for our products. We are particularly enthusiastic about launching our new Confidential Financial Statements ("CFS") Solution, a revolutionary product designed to streamline the way subscribers assess the financial risk of private companies by removing data entry requirements. A subscriber or its invited counterparty can securely upload financial statements, answer a few basic questions, and receive a detailed business report within 1 business day. These reports feature all the content our clients love like clean, standardized statements, financial spreads & ratios, peer benchmarking, and bankruptcy risk scores including our proprietary CFS score. This innovative product not only saves time but also enhances decision-making while offering clients a way to get coverage on all their critical counterparties. Finally, its consumption-based credit model only charges clients when they receive a risk score and they can buy more credits at any time during their annual term. No big investments to get started and no bad experiences paying for effort without results.

Moreover, we are deepening our investment in AI to improve our operational efficiency and products. Our use of AI, both predictive machine learning and generative techniques, continues to become more sophisticated. Specifically regarding generative AI, we are proceeding with caution given the potential for responses containing erroneous information and corresponding damage to the integrity of our subscriber relationships. We have installed human review steps and labeling for generated content to ensure quality and transparency. We use a variety of tools for these processes including our own fine-tuned, open-source models. While initially focusing on internal applications, we are exploring chat interfaces that will serve as the prototypes for a new, client-facing engagement channel in the future, once we can ensure utility, reliability, and trust.

Our commitments to introducing new products and expanding through innovative new channels will incur additional operational costs. However, we are confident these investments will fuel our growth strategy and enhance operational efficiency, ultimately leading to higher sustained profitability. We remain committed to delivering subscription services to our clients whose value exceeds their cost."

A full copy of the financial statements can be found at https://crmz.ir.edgar-online.com/

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