U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM
10-KSB xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934 For the fiscal
year ended: December 31, 2006 oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition
period from _________ to _________ Commission File
Number 1-8601 CREDITRISKMONITOR.COM,
  INC.(Name of small business
  issuer in its charter)  Nevada

36-2972588(State or other jurisdiction
  of
  incorporation or organization)

(I.R.S. Employer
  Identification No.)704 Executive
  Boulevard, Suite AValley Cottage, New
  York

10989(Address of Principal
  Executive offices)

(Zip Code) Issuers telephone number: (845) 230-3000 Securities registered under Section 12(b) of the Act: Title of each class
  None

Name of each exchange
  on which registered Securities registered under Section 12(g) of the Act: Common Stock $.01 Par
  Value(Title of Class) Check whether the issuer is not required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act. o Check whether the
issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x  No o Check if there is no disclosure of delinquent filers
in response to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB.  o Indicate by a check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes o
 No x State issuers revenues for the most recent fiscal
year. $4,322,785 The aggregate market value of the Registrants common
stock held by non-affiliates as of March 9, 2007 was $2,642,473. The Companys
common stock is traded on the OTC Electronic Bulletin Board. There were 7,694,462 shares of common stock $.01 par
value outstanding as of March 9, 2007. Documents incorporated by reference: None Transitional Small Business Disclosure Format (check
one): Yes o
 No x    PART I

ITEM 1.
BUSINESSIn
addition to historical information, the following discussion of the Companys
business contains forward-looking statements. These forward-looking statements
involve risks, uncertainties and assumptions. The actual results may differ
materially from those anticipated in these forward-looking statements as a
result of many factors, including but not limited to, those discussed in the
sections in this Annual Report on Form 10-KSB entitled The CreditRiskMonitor
Business, The Companys Goals, Marketing and Sales, Managements
Discussion and Analysis of Financial Condition and Results of Operations, and
Risks and Other Considerations. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect managements
opinions only as of the date hereof. CreditRiskMonitor.com, Inc. (the Company
or CRMZ) undertakes no obligation to revise or publicly release the results
of any revision to these forward-looking statements. Readers should carefully
review the risk factors described in this document as well as in other
documents the Company files from time to time with the Securities and Exchange
Commission, including the Quarterly Reports on Form 10-QSB to be filed by the
Company in fiscal year 2007.

Overview

CRMZ
was organized in Nevada in February 1977 and was engaged in the development and
sale of nutritional food products from 1982 until October 22, 1993, when it
sold substantially all of its assets (the Asset Sale), as previously
reported. In September 1998, the Company acquired an option (the Option) to
purchase the assets of the CreditRisk Monitor credit information service (CM
Service) from Market Guide Inc. (MGI). The Company exercised the Option on
December 29, 1998 and completed the purchase of the CM Service assets effective
January 19, 1999. The assets included customer contracts, receivables,
equipment, software and intangibles. Following the closing of the CM Service
purchase, the Company commenced doing business under the name
CreditRiskMonitor.com.

The CreditRiskMonitor Business

CRMZ
(see our website at www.crmz.com) is an Internet-based publisher of financial
information, designed to save time for busy corporate credit professionals,
which competes with Dun & Bradstreet, Inc. (D&BTM). The
service publishes comprehensive commercial credit reports covering public
companies worldwide and includes detailed financial statements, ratio analysis
and trend reports, peer analyses, credit scores, company background
information, and Moodys Investors Service (Moodys) and Standard &
Poors (S&P) ratings. It also includes trade payment data and public
filings (i.e., suits, liens, judgments and bankruptcy information) on millions
of U.S. companies. The service also provides continuous news monitoring that
keeps subscribers up to date on events affecting the creditworthiness of
companies, including financial statement updates, SEC filings, Moodys

1

and S&P
rating changes, credit-relevant news stories and press releases. Finally,
beginning in 2007, the Company now provides an interactive service for credit
managers to use in calculating recommended credit line limits for their
customers, as well as a facility for monitoring daily changes in these credit
limit recommendations and generating alert messages to subscribers as
requested. The focus of the Companys service is on facilitating the extension
of trade credit from one business to another.

The
Company is not a consumer reporting agency as defined by the Fair Credit
Reporting Act, as it is not involved in the communication of information
bearing on consumer credit.

In
a business-to-business transaction, for example the purchase and sale of
$20,000 of merchandise, the seller usually will ship before the buyer pays 
this is an extension of trade credit by the seller. The terms of trade credit
could be 2%-10 days, net 30 which means the customer is entitled to a 2%
deduction from the price if the customer makes payment within 10 days; but if
not, the customer must make payment in full within 30 days. The seller takes a
financial risk extending this credit, referred to as trade credit risk. The
buyer may pay late, causing the seller to incur increased borrowing costs; the seller
may incur extra costs in attempting to collect the $20,000; or the buyer may
never pay the full $20,000. Amounts unlikely to be repaid are called bad
debt. If buyers fail to pay, the seller can suffer substantial losses (e.g.,
assuming the seller averages a 10% pre-tax margin it will take about $10 of
sales to offset each $1 of bad debt).

CRMZs
service is usually purchased by a seller to review the risks of extending trade
credit to its customers. CRMZ believes that, with the downsizing of
corporations and the related reductions in credit departmental budgets and
personnel, corporate credit professionals have to do more with less. It is
notable that trade credit decisions are often made under intense time pressure.
Simultaneously, the Company believes, there has been an explosive growth in the
volume of data about businesses. Credit professionals are often faced with an
overwhelming amount of available data concerning important customers, while the
time for research and analysis is severely limited.

CRMZs
service is the result of managements experience in the commercial credit
industry and on-going research with respect to corporate credit department
information needs. This has enabled CRMZ to satisfy the credit professions need
for a timely, efficient, low cost credit information service. CRMZ publishes
and sells the following commercial credit analysis services to corporate credit
managers:

(1)
An annual
  fixed-price service (the Fundamental Service) with unlimited usage and
  coverage of public companies, featuring multi-period spreads of financial
  reports and ratio analysis, as well as up-to-date financial news screened
  specifically for usefulness in credit evaluation. Another feature of the
  service is notification and delivery of this news via email, concerning only
  companies of interest to the subscriber. This service is supplemented with
  trade receivable data contributed mainly by2

CRMZs
  subscribers, as well as U.S. public-record filing information (i.e., suits,
  liens, judgments and bankruptcy information) covering millions of public and
  private U.S. companies. The annual Fundamental Service is available covering
  over 40,000 public companies worldwide. Subscribers may opt, for lower
  prices, for limited regional coverage: North American Service for coverage
  of just U.S., Canadian, Mexican and Caribbean companies.(2)
In February
  2007, the Company announced an innovative new Credit Limit Service, sold as
  an annual subscription. The Credit Limit Service offers subscribers the
  ability to calculate and monitor credit line limit recommendations. These
  calculations are based on a sophisticated proprietary statistical model of
  default risk. The calculations are based, in part, on the subscribers own
  financial situation and relationship with each subject company. The resulting
  credit limit recommendations are fast, consistent and objective, based on
  proven risk analysis techniques, and customized to the subscribers unique
  situation. This Credit Limit Service is fully integrated with the Fundamental
  Service, which provides analytical depth to subscribers when questions arise
  or more analysis is needed. It is only sold in conjunction with the
  Fundamental Service, for an additional fee. The fee is based, in part, on the
  number of subject companies evaluated during the annual subscription period,
  and includes monitoring.(3)
Single
  credit reports on the over 40,000 companies covered in item (1) above. These
  reports are sold mainly via credit card and obtained via the Internet. Email
  alerts are not available with this single-report service.(4)
Individual
  credit reports on approximately 20 million foreign public and private
  companies. These reports are purchased by CRMZ through affiliations with
  third-party suppliers and sold to CRMZ subscribers.There
is little hard data on the size of CRMZs market. The U.S. National Association
of Credit Management has about 30,000 members, but some industry observers
believe the number of U.S. credit managers and other personnel performing this
function is substantially greater. In addition, there are numerous U.S. based
companies that do not have a full-time credit function but still require credit
information. Furthermore, a market exists outside of the U.S. for information on
U.S. and foreign companies. Finally, a small fraction of the Companys
customers use the information for purposes outside of the credit function,
including procurement and strategic planning/competitive analysis.

The
viability and potential of CRMZs business is made possible by the following
characteristics:


Low price. The prices of CRMZs services are
  low compared to the subscribers possible loss of not getting paid and low
  compared to the cost of most competitive products (for example, see the Price
  Comparison chart on our website).3


Non-cyclical. As economic growth slows,
  general corporate credit risk usually increases and the credit managers
  function rises in importance and complexity. Additionally, products that
  allow credit managers to perform their jobs more efficiently and cost
  effectively, compared to competitive services, should gain market share in
  most business environments and especially during a downturn. In a contracting
  business environment, most companies face increasing price competition which
  should accelerate their shift to lower cost technologies and providers, such
  as CRMZ. CRMZs business and revenues therefore may continue to grow as world
  economic growth slows or declines. Over the last ten years the issuance of
  corporate junk bonds and other debt by public companies and public debt by
  private companies (LBOs, etc.), and the development of credit instruments to
  hedge default and interest rate risk (i.e., credit derivatives) has increased
  dramatically. It is difficult to get a complete or totally accurate number of
  the totals, but it appears the market values of these various instruments may
  be in the range of $15 trillion. To put this in perspective, in 2006 the U.S.
  Gross National Product (GNP) was approximately $13 trillion. Thus, the U.S.
  public companies and private companies with public debt have a looming
  vulnerability to business cycle contraction and the attendant market risks
  for interest rates and stock markets. This dramatically increases the
  exposure and complexity of extending commercial trade credit and puts a
  premium on the speed and analysis of CRMZs service.
Recurring revenue stream. The recurring
  annual revenue stream of its subscription fee model gives the Company
  stability not found in a one-time sale product-based company.
Profit multiplier.
 Some of the Companys basic costs are being reduced. On a broad
  generic basis, the prices of computer hardware, software and
  telecommunications have been coming down for all buyers, including CRMZ. In
  addition, CRMZ has automated a significant amount of the processes used to
  create and deliver its service; therefore, its production costs, apart from
  the development cost of enhancing and upgrading the Companys website, are
  relatively stable over a wide range of increasing revenue. Offsetting these
  cost reductions is the cost of increasing the data content of CRMZs services
  if the Company chooses to increase content and not raise its prices to cover
  these additional costs.
Self financing.
  CRMZs business has no inventory, manufacturing or warehouse facilities, and
  payment for the subscription service is made early in the subscription cycle.
  Thus, the Companys business is characterized by low capital-intensity, and
  yet it is a business capable of generating high margins and sufficient positive
  cash flow to grow the business organically with little need for external
  capital. (See MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
  RESULTS OF OPERATIONS - Financial Condition, Liquidity and Capital
  Resources.)4


Management. CRMZ
  has in-place an experienced management team with proven talent in business
  credit evaluation systems and Internet development.The Companys
Goals


Growth
  in U.S. market share. Faced with a dominant U.S. competitor, D&B, as well as
  other several larger competitors, the Companys primary goal is to gain
  market share. The Company believes that many potential customers are unaware
  of its service, while others are aware but have not evaluated its services.
International penetration.
  Foreign companies doing business in the U.S. may have the same need as
  domestic companies for CRMZs
  credit analysis of U.S. companies. Internationally, the Internet provides a
  mechanism for rapid and inexpensive marketing and distribution of CRMZs
  service.
Broaden the services supplied.
  Revenue per subscriber should increase over time as the Company adds
  functionality and content.
Lowest cost provider. CRMZs sourcing, analysis
  and preparation of data into a usable form is highly automated. CRMZ delivers
  all of its information to customers via the Internet and there is continuous
  automation between the sourcing of data and delivery of a company credit
  report to a subscriber. Because of this automation, CRMZs production costs are
  relatively stable over a wide range of increasing revenue. Management
  believes CRMZs cost structure is one of the lowest in its industry.
High margins and return on investment.
  The Company foresees declining unit costs
  in some important expense areas, such as computer and communication costs,
  which should increase net profits from its subscription income stream. The
  Company believes that the advent of Internet delivery of telephone calls will
  further reduce the cost per phone call over the next several years, and
  computer costs per transaction should also continue to decline. The Company
  has lower sales expenses for customer renewals than for new sales, and the
  Company expects that its renewal revenue will grow larger each year. All
  these naturally occurring unit cost reductions will be in addition to the
  cost reductions achieved through servicing more accounts over the Companys
  in-place fixed costs.Marketing
and Sales

To gain
market share for the Companys service, it will continue to use the Internet
(at our website www.crmz.com) as the primary mechanism for demonstrating and
distributing its service. To inform potential subscribers about its service,
CRMZ uses a combination of telephone sales, Internet demonstration, direct
mail, trade show representation and speaking engagements before credit groups
and

5

associations.

Value Proposition

The
Companys fundamental value proposition is that it creates and sells
high quality commercial credit reports that save busy credit managers time, at
a cost significantly below that of reports from the leading provider (price
comparison as of January 24, 2007). Because D&B has the largest share of
the commercial credit market, their flagship product, the Business Information
Report (BIR), is the standard by which that market measures both quality and
price. The Companys research shows that its customers overwhelmingly agree
that CreditRiskMonitor saves them time, helps them to make better credit
decisions, and represents a significant value for the price paid compared to
competitive services.

The
operational strategy CRMZ follows to deliver on its value proposition is
straightforward. CRMZ became (and remains) one of the industrys lowest cost
producers of high quality commercial credit information by continuously
collecting data from a wide variety of sources and employing sophisticated
proprietary computer algorithms to process that data into an extensive data
base of valuable reports on companies. Highly automated operations add to
reliability and consistency, while limiting costs. The Company employs a small
number of analysts who selectively review data at critical points in its
process to further enhance the quality of its products and their relevance to
credit professionals.

CRMZ
employs several different selling strategies to deliver this value to
different customer segments:


Credit professionals need to save time,
  when analyzing their most important customers, and the CRMZ service provides
  this critical benefit. CRMZ believes that its reports and monitoring of
  public companies are superior in this way to what is offered by D&B. The
  CRMZ service provides financial information in greater depth and better
  analytical efficiency. It also includes timely email alerts enabling credit
  professionals to easily stay on top of financial developments at their
  customers, without the clutter of non-financial news prevalent at other news
  services. Finally, the Moodys and S&P ratings, and the Altman Z and
  proprietary FRISK scores offered by the service enable further efficiency by
  focusing attention on only those companies showing financial weakness.
The Companys customers typically have
  contracts with D&B. Traditionally, D&B sells them prepaid units
  and/or reports (units) on an annual basis, which they can then use to buy
  D&B products throughout the year. The price of each unit depends on the
  number of units being purchased upfront, with the resulting price of a
  domestic U.S. BIR generally ranging between $40 and $60. If a customer has
  unused units at the end of the year, D&B may allow it to carry a
  percentage of them forward, if the customer renews for another year for at
  least the same number of6

units as the previous year. All other
  unused units may be forfeited. For these customers, CRMZs simple unlimited
  usage fixed price annual subscription represents an opportunity to save money
  by reducing the customers D&B usage. The best practice that CRMZ
  recommends to its subscription customers is to always search CRMZs data base
  first (which does not incur any incremental expense to them) and to save
  their expensive D&B units for decisions concerning those privately-held
  businesses where CRMZ may have little or no information. According to the Companys
  research, the great majority of customers report saving money as a result of
  using the CRMZ service. In 2005, the Company became aware that D&B had
  also begun selling some part of its service on a fixed-price basis, and in
  2006 D&B expanded this practice under the trade name DNBi. It appears
  that these contracts offer a fixed price for usage of D&B information
  within a wide range of amounts, the upper end of which is a multiple of the
  customers current usage. D&B attempts to maintain or increase its total
  annual charges to each DNBi customer, and these charges are generally many
  times more than comparable CRMZ fees. The Company cannot predict the
  effectiveness of D&Bs strategy much less whether D&B will find this
  DNBi pricing is even sustainable over multiple years, while attempting to
  continuously increase its revenues. To date, the tactic has not significantly
  diminished the Companys ability to win new customers.
The Company estimates that only a small
  percentage of all credit-related business transactions are currently
  supported by objective third party credit information. This is not
  surprising, given the high cost of commercial credit reports from D&B and
  other vendors. CRMZ breaks that model by eliminating the incremental cost of
  a credit report. CRMZs fixed price, unlimited usage annual subscription
  enables customers to employ up to date, objective credit information in many
  more transactions than was economically feasible before. Customers can make
  better credit decisions with no increase in costs.
It is expected that compliance with the
  Sarbanes-Oxley Act of 2002 will require companies to adopt more systematic
  processes to review trade credit and accounts receivable risks. In-depth and
  frequent review of risks concentrated in the largest customer companies, many
  of which are public companies covered by CRMZ, is a common practice that the
  Company expects to become even more prevalent.
For low-volume customers, CRMZ sells single
  commercial credit reports for a flat price of $49.95 per report, using credit
  card transactions via the Internet. Although D&B also sells single
  reports on the Internet, they impose a complicated pricing schedule, in which
  the price of a specific company report depends on both the customers home country
  and the home country of the company about which they are inquiring. This
  pricing schedule includes more than 30 different price points for the D&B
  Business Information Report alone, ranging from $80 to $570 for  this7

flagship report. This competitors approach
  is apparently designed to protect its legacy revenue streams from the
  pre-Internet era, when charging large cross-border premiums could be
  justified to some extent by the increased production costs of producing and
  delivering reports across boundaries. In contrast, CRMZ was designed from the
  ground up to be a worldwide provider of commercial credit reports over the
  Internet, and is not similarly constrained by legacy systems. Consequently,
  CRMZs value advantage is even more apparent when customers compare the costs
  of cross-border report purchases.Net
Operating Loss Carryforwards

At December
31, 2006, the Company had net operating loss (NOL) carryforwards aggregating approximately $5.2 million, expiring in
varying amounts over
the next twenty (20) years, which,
to the extent available under the Internal Revenue Code of 1986, as amended
(the Code), may be used to minimize the Companys liability for taxes on
future taxable income of the Company, if any.

Section 382
of the Code provides limits on the amount of a companys NOL carryforwards
which can be applied against its earnings after an ownership change occurs.
Generally, such a limit is determined, with respect to the amount of NOL
carryforward to which the limit applies, by multiplying the companys value at
the time of the ownership change by the published long-term tax exempt interest
rate. The resulting amount is the maximum that can be offset by NOL
carryforwards in any one year if an ownership change has occurred.

An
ownership change occurs if there has been an owner shift  a more than 50
percentage point increase in stock ownership involving 5-percent shareholders
over the lowest percentage of stock of the loss corporation owned by such
shareholders at any time during the testing period (generally, the prior 3
years). For this purpose, in general, shareholders that are not 5-percent
shareholders are aggregated and treated as a single 5-percent shareholder.

See Risks
and Other Considerations  Disallowance of NOL Carryovers for a discussion of
the risk that an ownership change may have occurred or could occur which
could cause the loss or limitation of the Companys available NOL
carryforwards, pursuant to Section 382.

Employees

As
of March 9, 2007, the Company had 37 full-time employees. None of the Companys
employees are covered by a collective bargaining agreement. The Company
believes its relations with its employees to be satisfactory and has suffered no
interruption in operations.

The Company
established a 401(k) Plan covering all employees effective January 1, 2000 that
provides for discretionary Company contributions. The Company has no other
retirement, pension, profit sharing or similar program in effect for its
employees. The Company adopted a stock option plan in 1998 that covers its
employees.

8

ITEM 2.
PROPERTY.The
Company does not own any real property. The Companys principal office is located in approximately 7,690 square
feet of leased space in an industrial warehouse complex located in Valley
Cottage, New York. The lease expires on July 31, 2009 and provides for a
monthly cost of $8,150 during the current year and increases of 3% per annum in
subsequent years, plus an allocated portion of real estate taxes, insurance and
common area maintenance.

ITEM 3.
LEGAL PROCEEDINGS.Neither the
Company nor its property is a party to or subject of a pending legal
proceeding.

ITEM 4.
SUBMISSION OF
  MATTERS TO A VOTE OF SECURITY HOLDERS.No
matters were submitted to a vote of security holders during the fourth quarter
of the Companys fiscal year ended December 31, 2006, either through the
solicitation of proxies or otherwise.

9

PART II

ITEM 5.
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
  BUSINESS ISSUER PURHASES OF EQUITY SECURITIES.The
Companys Common Stock trades in the over-the-counter market Bulletin Board
Service under the symbol CRMZ. The following table sets forth the high and low
closing bid quotations reported on the over-the-counter market Bulletin Board
Service for each calendar quarter of 2005 and 2006. These quotations reflect
inter-dealer prices without retail mark-up, mark-down or commission and do not
necessarily represent actual transactions.

High Bid

Low Bid2005First Quarter


$
1.01



$
0.70Second Quarter


$
1.01



$
0.90Third Quarter


$
2.00



$
1.80Fourth Quarter


$
1.75



$
1.652006First Quarter


$
1.70



$
1.05Second Quarter


$
1.75



$
1.35Third Quarter


$
1.35



$
0.60Fourth Quarter


$
2.95



$
0.60On
March 9, 2007, there were approximately 326 registered holders of the Companys
Common Stock. This number does not reflect the number of individuals or
institutional investors holding stock in nominee name through banks, brokerage
firms, and others.

The
Company has not paid any cash dividends on its Common Stock and does not
anticipate paying any cash dividends in the foreseeable future.

The
Company did not repurchase any of its common stock during the fourth quarter of
2006.

ITEM 6.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
  RESULTS OF OPERATIONS.Financial Condition, Liquidity and Capital
Resources

At
December 31, 2006, the Company had cash and cash equivalents of $2.47 million
compared to $2.03 million at December 31, 2005. The Companys working capital
deficit at December 31, 2006 was approximately $209,000 compared to a working
capital deficit of approximately $144,000 at December 31, 2005, due primarily
to an increase of $378,000 in deferred revenue, a net increase of $262,000 in
accrued expenses and current portion of debt and a decrease of $11,000 in
accounts receivable offset somewhat by an increase of $433,000 in cash, an
increase of $106,000 in other current assets and a decrease of $47,000 in
accounts payable. Additionally, the working capital deficit at December 31,
2006 is mainly derived from $2.99 million in deferred revenue, which should

10

not require
any future cash outlay other than the cost of preparation and delivery of the
applicable commercial credit reports that is much less than the deferred
revenue shown. The deferred revenue is recognized as income over the
subscription term, which approximates twelve months. The Company has no bank
lines of credit or other currently available credit sources.

The
Company believes that it will have sufficient resources to meet its working
capital and capital expenditure needs, including debt service, for the
foreseeable future.

As
described more fully in Notes 6 and 8 of the Notes to Consolidated Financial
Statements, at December 31, 2006 the Company had certain cash obligations,
which are due as follows:

Total

Less than
  1 Year

1-3 Years

4-5 Years

After
  5 YearsPromissory Note

$
409,810

$
122,870

$
286,940





Capital lease obligations


18,437


18,437








Operating leases


283,073


115,710


167,363





Total

$
711,320

$
257,017

$
454,303





Off-Balance Sheet Arrangements

The
Company is not a party to any off-balance sheet arrangements.

Results of Operations

2006
vs. 2005

Year
  Ended December 31,2006

2005Amount

% of
  Total
  Revenue

Amount

% of Total
  RevenueOperating revenues

$
4,322,785


100.00
%
$
3,841,833


100.00
%Operating expenses:Data and
product costs


1,404,182


32.48
%

1,113,602


28.99
%Selling,
general and administrative expenses


2,849,002


65.91
%

2,679,203


69.73
%Depreciation
and amortization


65,951


1.53
%

66,302


1.73
%Total
operating expenses


4,319,135


99.92
%

3,859,107


100.45
%Income (loss) from
  operations


3,650


0.08
%

(17,274
)

-0.45
%Other income


68,285


1.58
%

31,492


0.82
%Gain on settlement of
  litigation





0.00
%

1,100,000


28.63
%Interest expense


(52,416
)

-1.21
%

(66,091
)

-1.72
%Income before income taxes


19,519


0.45
%

1,048,127


27.28
%Provision for state and local
income taxes


4,922


0.11
%

2,058


0.05
%Net income

$
14,597


0.34
%
$
1,046,069


27.23
%Operating
revenues increased 13% for fiscal 2006. This increase was primarily due to an
increase in the number of subscribers to the Companys Internet subscription
service as well as a higher average contract price offset in part by a decrease
in the number of subscribers to the Companys subscription service for
third-party international credit reports.

11

Data
and product costs increased 26% for fiscal 2006. This increase
was primarily due to higher salary and related employee benefits costs
including the hiring of additional quality control personnel, higher consulting
fees, as well as the cost of new third-party content added to the Companys
website.

Selling,
general and administrative expenses increased 6% for fiscal 2006. This increase
was primarily due to higher salary and related employee benefit costs due to an
increase in the Companys sales force during the past 12 months and an increase
in marketing expenses, partially offset by a decrease in professional fees as a
result of the settlement of the litigation that was reached during last years
second quarter, as previously reported.

Depreciation
and amortization decreased less than 1% for fiscal 2006, due to a lower
depreciable asset base as certain items have been fully depreciated but are
still in use.

Other
income increased 117% for fiscal 2006, primarily due to the settlement proceeds
received at the end of April 2005 that were invested in interest bearing
accounts as well as a higher interest rate received on funds invested in
interest bearing accounts during the current period compared to the same period
last year.

Interest
expense decreased 21% for fiscal 2006, due to a lower outstanding promissory
note balance.

The
Company reported net income of $15,000 for fiscal 2006 compared to net income
of $1.05 million for the year ended December 31, 2005. This decrease was
primarily due to the litigation settlement of $1.1 million received in the
second quarter of fiscal 2005.

2005
vs. 2004

Year
  Ended December 31,2005

2004Amount

% of
  Total
  Revenue

Amount

% of
  Total
  RevenueOperating revenues

$
3,841,833


100.00
%
$
3,346,572


100.00
%Operating expenses:Data and
product costs


1,113,602


28.99
%

1,042,912


31.16
%Selling,
general and administrative expenses


2,679,203


69.73
%

2,308,046


68.97
%Depreciation
and amortization


66,302


1.73
%

67,721


2.02
%Total
operating expenses


3,859,107


100.45
%

3,418,679


102.15
%Loss from operations


(17,274
)

-0.45
%

(72,107
)

-2.15
%Other income


31,492


0.82
%

7,729


0.23
%Gain on settlement of
  litigation


1,100,000


28.63
%




0.00
%Interest expense


(66,091
)

-1.72
%

(74,271
)

-2.22
%Income (loss) before income
  taxes


1,048,127


27.28
%

(138,649
)

-4.14
%Provision for state and local
income taxes


2,058


0.05
%

381


0.01
%Net income (loss)

$
1,046,069


27.23
%
$
(139,030
)

-4.15
%12

Operating
revenues increased 15% for fiscal 2005. This increase was primarily due to an
increase in the number of subscribers to the Companys Internet subscription
service offset in part by a decrease in the number of subscribers to the
Companys subscription service for third-party international credit reports.

Data and
product costs increased 7% for fiscal 2005. This increase was primarily due to
higher salary and related employee benefits as well as the cost of leasing the
co-location facility that commenced in the third quarter of 2004, offset in
part by the lower cost of acquiring additional third-party international credit
reports and by a reduction in consulting fees that were incurred last year in
connection with setting up the Companys data center due to its move to a new
facility.

Selling,
general and administrative expenses increased 16% for fiscal 2005. This
increase was primarily due to higher salary and related employee benefit costs
due to an increase in the Companys sales force during the past 12 months and
an increase in marketing expenses, offset in part by a decrease in legal fees and expenses as a result of the
settlement of the litigation which was reached during the second quarter of
2005 and the absence of the non-recurring moving expenses incurred in
2004.

Depreciation
and amortization decreased 2% for fiscal 2005, due to a lower depreciable asset
base as certain items have been fully depreciated but are still in use.

Other
income increased 307% for fiscal 2005, primarily due to the settlement proceeds
received at the end of April 2005 that were invested in interest bearing
accounts as well as a higher interest rate received on funds invested in
interest bearing accounts during the current period compared to the same period
last year.

Interest
expense decreased 11% for fiscal 2005, due to a lower outstanding promissory note balance.

The
Company reported net income of $1.05 million for fiscal 2005 compared to a net
loss of $139,000 for the year ended December 31, 2004.

Future
Operations

The Company
over time intends to expand its operations by expanding the breadth and depth
of its product and service offerings and introducing new and complementary
products. Gross margins attributable to new business areas may be lower than
those associated with the Companys existing business activities.

As a result
of the Companys limited operating history and the evolving nature of the
markets in which it competes, the Companys ability to accurately forecast its
revenues, gross profits and operating expenses as a percentage of net sales is
limited. The Companys current and future expense levels are based largely on
its investment plans and estimates of future revenues. To a large extent these
costs do not vary with revenue. Sales and operating results

13

generally depend on the Companys ability to attract and retain
customers and the volume of and timing of customer subscriptions for the
Companys services, which are difficult to forecast. The Company may be unable
to adjust spending in a timely manner to compensate for any unexpected revenue
shortfall. Accordingly, any significant shortfall in revenues in relation to
the Companys planned expenditures would have an immediate adverse effect on
the Companys business, prospects, financial condition and results of
operations. Further, as a strategic response to changes in the competitive
environment, the Company may from time to time make certain pricing, service,
marketing or acquisition decisions that could have a material adverse effect on
its business, prospects, financial condition and results of operations.

Achieving
greater profitability depends on the Companys ability to generate and sustain
increased revenue levels. The Company believes that its success will depend in
large part on its ability to (i) increase its brand awareness, (ii) provide its
customers with outstanding value, thus encouraging customer renewals, and (iii)
achieve sufficient sales volume to realize economies of scale. Accordingly, the
Company intends to continue to invest in marketing and promotion, product
development and technology and operating infrastructure development. There can
be no assurance that the Company will be able to achieve these objectives
within a meaningful time frame.

Critical Accounting Policies, Estimates and
Judgments

The
Companys consolidated financial statements are prepared in accordance with
accounting principles that are generally accepted in the United States. The
preparation of these consolidated financial statements require management to
make estimates and judgments that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Management bases its estimates and
judgments on historical experience and other factors that are believed to be
reasonable under the circumstances. Actual results may differ from these
estimates. Management continually evaluates its estimates and judgments, the
most critical of which are those related to:

Revenue recognition
   CRMZs domestic and international service is sold on a subscription basis
  pursuant to customer contracts that span varying periods of time, but are
  generally for a period of one year. The Company initially records amounts
  billed as accounts receivable and defers the related revenue until persuasive
  evidence of an arrangement exists, fees are fixed or determinable, and
  collection is reasonably assured. Revenues are recognized ratably over the
  related subscription period. Revenue from the Companys third-party
  international credit report service is recognized as information is delivered
  and products and services are used by customers.Valuation of goodwill
   Goodwill is reviewed for impairment annually, or more frequently if events
  or changes in14

circumstances warrant. If the carrying value of this asset exceeds
  its estimated fair value, the Company will record an impairment loss to write
  the asset down to its estimated fair value.Income taxes 
  The Company provides for deferred income taxes resulting from temporary
  differences between financial statement and income tax reporting. Temporary
  differences are differences between the amounts of assets and liabilities
  reported for financial statement purposes and their tax bases. Deferred tax
  liabilities are recognized for temporary differences that will be taxable in
  future years tax returns. Deferred tax assets are recognized for temporary
  differences that will be deductible in future years tax returns and for
  operating loss and tax credit carryforwards. Deferred tax assets are reduced
  by a valuation allowance if it is deemed more likely than not that some or
  all of the deferred tax assets will not be realized. The Company considers
  that the cumulative losses incurred in recent years creates a rebuttable
  presumption that a full valuation allowance continues to be required for its
  deferred tax assets.Federal Tax Considerations

The Company
has available net operating loss carryforwards (NOLs), which may be used to
reduce its Federal income tax liability. However, provisions contained in the
Internal Revenue Code of 1986, as amended (the Code), may impose substantial
limitations upon the Companys ability to utilize its NOLs. For example, the
Company may be subject to the so-called alternative minimum tax which does
not always permit full utilization of NOLs otherwise available.

Limitations
imposed by Section 382 of the Code upon the availability of NOLs would apply if
certain changes were to occur in ownership of the Company. Thus, the Companys
utilization of its carryforwards in the future may be deferred and/or reduced
if the Company undertakes further equity financings or if certain other changes
occur in the ownership of the Common Stock. See Business - Net Operating Loss
Carryforwards.

Recently Issued Accounting Standards

The
Financial Accounting Standards Board (FASB) and the Securities and Exchange
Commission (SEC) have issued accounting pronouncements as of December 31 2006
that will become effective in subsequent periods; however, management does not
believe that any of those pronouncements would have significantly affected our
financial accounting measurements or disclosures had they been in effect during
the annual period for which financial statements are included in this annual
report.

Risks and Other Considerations

The risks
and uncertainties described below are not the only ones facing the Company.
Additional risks and uncertainties not presently

15

known to the Company or currently deemed immaterial also may impair its
business operations. If any of the risks described below actually occur, the
Companys business could be impaired.

From time
to time, information provided by the Company or statements made by its
employees, or information provided in its filings with the Securities and
Exchange Commission may contain forward-looking information. Any statements
contained herein or otherwise made that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting the foregoing,
the words believes, expects, anticipates, plans and similar expressions
are intended to identify forward-looking statements. The Companys actual
future operating results or short-term or long-term liquidity may differ
materially from those projections or statements made in such forward-looking
information as a result of various risks and uncertainties, including but not
limited to the following in addition to those set forth elsewhere herein or in
other filings made by the Company with the Commission.

Limited
Operating History of CRMZ; Anticipated Losses and Negative Cash Flow.
The Company has been operating its business since January 1999, when it
acquired the assets of the CreditRisk Monitor credit information
service. Accordingly, CRMZ has a limited operating history on which to base an
evaluation of its business and prospects. The Companys prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets such as online commerce. Such
risks for the Company include, but are not limited to, an evolving and
unpredictable business model and the management of growth. To address these
risks, the Company among other things, must maintain and increase its customer
base, implement and successfully execute its business and marketing strategy
and its expansion into new product markets, effectively integrate acquisitions
and other business combinations, continue to develop and upgrade its technology
and transaction-processing systems, improve its Web site, provide superior
customer service, respond to competitive developments and attract, retain and
motivate qualified personnel. There can be no assurance that the Company will
be successful in addressing such risks, and the failure to do so could have a
material adverse effect on the Companys business, prospects, financial
condition and results of operations.

Since
inception, CRMZ has incurred significant operating losses, and the Company may
continue to incur additional losses and negative cash flow. See MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unpredictability
of Future Revenues and Profits; Potential Fluctuations in Quarterly Operating
Results. As a result of the Companys limited
operating history and the emerging nature of the markets in which it competes,
the Companys ability to accurately forecast its revenues, gross profits and
operating expenses as a percentage of net sales is limited. The Companys
current and future expense levels are based largely on its investment plans and
estimates of future revenues and to a large extent are fixed. Sales and

16

operating results generally depend on the Companys ability to attract
and retain customers and the volume of and timing of their subscriptions for
the Companys services, which are difficult to forecast. The Company may be
unable to adjust spending in a timely manner to compensate for any unexpected
revenue shortfall. Accordingly, any significant shortfall in revenues in
relation to the Companys planned expenditures would have an immediate adverse
effect on the Companys business, prospects, financial condition and results of
operations. Further, as a strategic response to changes in the competitive
environment, the Company may from time to time make certain pricing, service,
marketing or acquisition decisions that could have a material adverse effect on
its business, prospects, financial condition and results of operations.

Achieving
and improving profitability depends on the Companys ability to generate and
sustain substantially increased revenue levels. The Company believes that its
success will depend in large part on its ability to (i) extend its brand
position, (ii) provide its customers with outstanding value, and (iii) achieve
sufficient sales volume to realize economies of scale. Accordingly, the Company
intends to continue to invest in marketing and promotion, product development
and technology and operating infrastructure development. There can be no
assurance that the Company will be able to achieve these objectives within a
meaningful time frame.

The Company
expects to experience significant fluctuations in its future quarterly
operating results due to a variety of factors, some of which are outside the
Companys control. Factors that may adversely affect the Companys quarterly
operating results include, among others, (i) the Companys ability to retain
existing customers, attract new customers at a steady rate and maintain
customer satisfaction, (ii) the Companys ability to maintain gross margins in
its existing business and in future product lines and markets, (iii) the
development of new services and products by the Company and its competitors,
(iv) price competition, (v) the level of use of the Internet and online
services and increasing acceptance of the Internet and other online services
for the purchase of products such as those offered by the Company, (vi) the
Companys ability to upgrade and develop its systems and infrastructure, (vii)
the Companys ability to attract new personnel in a timely and effective
manner, (viii) the level of traffic on the Companys Web site, (ix) the
Companys ability to manage effectively its development of new business
segments and markets, (x) the Companys ability to successfully manage the
integration of operations and technology of acquisitions or other business
combinations, (xi) technical difficulties, system downtime or Internet
brownouts, (xii) the amount and timing of operating costs and capital
expenditures relating to expansion of the Companys business, operations and
infrastructure, (xiii) governmental regulation and taxation policies, (xiv)
disruptions in service by common carriers due to strikes or otherwise, (xv)
risks of fire or other casualty, (xvi) continued litigation costs or other
unanticipated expenses, (xvii) interest rate risks and inflationary pressures,
and (xviii) general economic conditions and economic conditions specific to the
Internet and online commerce.

17

Due to the
foregoing factors and the Companys limited forecasting abilities, the Company
believes that period-to-period comparisons of its revenues and operating
results are not necessarily meaningful and should not be relied on as an
indication of future performance.

Competition.
The online commerce market, particularly over the Web, is new, rapidly evolving
and intensely competitive. The Companys current or potential competitors
include (i) companies now selling or who will be selling credit analysis data,
such as D&BTM
which currently has the dominant position in the industry and the financial
resources to invest much more than the Company can while withstanding substantial
price competition, and (ii) a number of indirect competitors that specialize in
online commerce or information or who derive a substantial portion of the
revenues from online commerce, advertising or information, and who may offer
competing products, and many of which possess significant brand awareness,
sales volume and customer bases. The Company believes that the principal
competitive factors in its market are brand recognition, selection,
personalized services, convenience, price, accessibility, customer service,
quality of search tools, quality of editorial and other site content and
reliability and speed of delivery. Many of the Companys competitors have
longer operating histories, larger customer bases, greater brand recognition
and significantly greater financial, marketing and other resources than the
Company. Certain of the Companys competitors may be able to secure data from
vendors on more favorable terms, devote greater resources to marketing and
promotional campaigns, adopt more aggressive pricing and devote substantially
more resources to Web site and systems development than the Company. Increased
competition may result in reduced operating margins, loss of market share and a
diminished brand franchise. There can be no assurance that the Company will be
able to compete successfully against current and future competitors.

The Company
expects that the competition in the Internet and online commerce markets will
intensify in the future. For example, as various Internet market segments
obtain large, loyal customer bases, participants in those segments may seek to
leverage their market power to the detriment of participants in other market
segments. In addition, new technologies and the expansion of existing
technologies may increase the competitive pressures on the Company. Competitive
pressures created by any one of the Companys competitors, or by the Companys
competitors collectively, could have a material adverse effect on the Companys
business, prospects, financial condition and results of operations.

Need
for Additional Financing; Risks of Default. The
Companys future liquidity and capital funding requirements will depend on
numerous factors, including whether or when the Company will increase its
customer base and revenues, and the costs and timing of expansion of sales,
control of information costs and other expenses and competition. There can be
no assurance that additional capital, if needed, will be available on terms
acceptable to the Company, or at all. Furthermore, any additional equity
financing may be dilutive to stockholders and may cause a loss or material
limitation of the

18

Companys NOL carryovers, and debt financing may be unavailable in
light of the first priority liens which have been granted to secure the
Companys note to the seller of the assets of its credit information service
and, if available, will likely include restrictive covenants, including
financial maintenance covenants restricting the Companys ability to incur
additional indebtedness and to pay dividends. The failure of the Company to
raise capital on acceptable terms when needed could have a material adverse
effect on the Company.

There can
be no assurance that the Company will be able to meet its debt service obligations.
In the event the Companys cash flow is inadequate to meet its obligations, the
Company could face substantial liquidity problems. If the Company is unable to
generate sufficient cash flow or otherwise obtain funds necessary to make
required payments, or if the Company otherwise fails to comply with the various
covenants in its indebtedness, it would be in default under the terms thereof,
which would permit the holders of such indebtedness to accelerate the maturity
of such indebtedness and to foreclose on its collateral, which could cause
defaults under other indebtedness of the Company. Any such default could have a
material adverse effect on the Companys business, prospects, financial
condition and results of operations.

System
Development and Operation Risks. Any system
interruptions that result in the unavailability of the Companys Web site would
reduce the attractiveness of the Companys service offerings. The Company has
experienced periodic system interruptions, which it believes will continue to
occur from time to time. The Company will be required to add additional
software and hardware and further develop and upgrade its existing technology
and network infrastructure to accommodate increased traffic on its Web site
resulting from increased sales volume. Any inability to do so may cause
unanticipated system disruptions, slower response times, degradation in levels
of customer service, impaired quality, or delays in reporting accurate
financial information. There can be no assurance that the Company will be able
to accurately project the rate or timing of increases, if any, in the use of
its Web site or in a timely manner to effectively upgrade and expand its
systems or to integrate smoothly any newly developed or purchased modules with
its existing systems. Any inability to do so could have a material adverse
effect on the Companys business, prospects, financial condition and results of
operations.

The
Companys web servers were located to a secure offsite location during 2004.
Its back office computer and communications hardware is located at a single
leased facility in Valley Cottage, New York. The Companys systems and
operations are vulnerable to damage or interruption from fire, flood, power
loss, telecommunications failure, break-ins, earthquake and similar events. The
Company does not currently have redundant systems or a formal disaster recovery
plan and does not have sufficient business interruption insurance to compensate
it for losses that may occur. Despite the implementation of network security
measures by the Company, its servers are vulnerable to computer viruses,
physical or electronic break-ins and similar disruptions, which could lead to
interruptions, delays, loss of critical data or the inability to accept and
fulfill customer orders.

19

The occurrence of any of the foregoing events could have a material
adverse effect on the Companys business, prospects, financial condition and
results of operations.

Management
of Potential Growth. To manage the expected growth
of its operations and personnel, the Company will be required to improve
existing and implement new operational and financial systems, procedures and
controls, as well as to expand, train and manage its growing employee base.
There can be no assurance that the Companys current and planned personnel,
systems, procedures and controls will be adequate to support the Companys
future operations, that management will be able to hire, train, retain,
motivate and manage required personnel or that Company management will be able
to successfully identify, manage and exploit existing and potential market
opportunities. If the Company is unable to manage growth effectively, such
inability could have a material adverse effect on the Companys business,
prospects, financial condition and results of operations.

Limited
Personnel. The Company currently has limited
personnel and other resources to undertake the extensive marketing activities
necessary to maintain and grow is revenues. The Companys ability to generate
revenue will be dependent upon, among other things, its ability to manage an
effective sales organization. The Company will need to continue to develop and
expand a sales force and a marketing group with technical expertise to coordinate
marketing efforts. In addition, there can be no assurance that the Company will
be able to market its products effectively through an in-house sales force,
independent sales representatives, through arrangements with an outside sales
force, or through strategic partners.

Risks
of New Business Areas. The Company intends to
expand its operations by continuing to promote new and complementary products
and by expanding the breadth and depth of its product or service offerings.
Expansion of the Companys operations in this manner will require significant
additional expense and development, operations and editorial resources and
could strain the Companys management, financial and operational resources.
There can be no assurance that the Company will be able to expand its
operations in a cost-effective or timely manner. Furthermore, any new business
launched by the Company that is not favorably received by customers could
damage the Companys reputation or the CRMZ brand. The lack of market acceptance
of such efforts or the Companys inability to generate satisfactory revenues
from such expanded services or products to offset their cost could have a
material adverse effect on the Companys business, prospects, financial
condition and results of operations. Gross margins attributable to new business
areas may be lower than those associated with the Companys existing business
activities.

Risks
of Business Combinations and Strategic Alliances.
The Company may choose to expand its operations or market presence by entering
into business combinations, investments, joint venture or other strategic
alliances with third parties. Any such transaction will be accompanied by risks
commonly encountered in such transactions, which include, among others, the
difficulty of

20

assimilating the operations, technology and personnel of the combined
companies, the potential disruption of the Companys ongoing business, the
possible inability to retain key technical and managerial personnel, the
potential inability of management to maximize the financial and strategic
position of the Company through the successful integration of acquired
businesses, additional expenses associated with amortization of purchased
intangible assets, additional operating losses and expenses associated with the
activities and expansion of acquired businesses, the maintenance of uniform
standards, controls and policies and the possible impairment of relationships
with existing employees and customers. There can be no assurance that the Company
will be successful in overcoming these risks or any other problems encountered
in connection with such business combinations, investments, joint ventures or
other strategic alliances, or that such transactions will not have a material
adverse effect on the Companys business, prospects, financial condition and
results of operations.

Rapid
Technological Change. To remain competitive, the
Company must continue to enhance and improve the responsiveness, functionality
and features of its services. The Internet and the online commerce industry are
characterized by rapid technological change, changes in user and customer
requirements and preferences, frequent new products and service introductions
embodying new technologies and the emergence of new industry standards and
practices that could render the Companys existing website and proprietary
technology and systems obsolete. The Companys success will depend, in part, on
its ability to license leading technologies useful in its business, enhance its
existing services, develop new services and technology that address the
increasingly sophisticated and varied needs of its prospective customers and
respond to technological advances and emerging industry standards and practices
on a cost-effective and timely basis. The development of a website and other
proprietary technology entails significant technical, financial and business
risks. There can be no assurance that the Company will successfully implement
new technologies or adapt its website, proprietary technology and
transaction-processing systems to customer requirements or emerging industry
standards. If the Company is unable, for technical, legal, financial or other
reasons, to adapt in a timely manner in response to changing market conditions
or customer requirements, such inability could have a material adverse effect
on the Companys business, prospects, financial condition and results of
operations.

Dependence
on Key Personnel. The Companys performance is
substantially dependent on the continued services and on the performance of its
senior management and other key personnel. The Company does not have long-term
employment agreements with any of its key personnel and maintains no key
person life insurance policies. The loss of the services of its executive
officers or other key employees could have a material adverse effect on the
Companys business, prospects, financial condition and results of operations.

Reliance
on Certain Suppliers. The Company purchases its
data and/or credit reports from a limited number of vendors under agreements
having terms of 24 months or less. The Company has no longer-term contracts or
arrangements with any vendor of data that

21

guarantee the availability of data, the continuation of particular
payment terms or the extension of credit. Nevertheless, the Company believes
that it would be able to obtain the necessary data from other sources, at
competitive prices, should it become necessary or advisable to do so. There can
be no assurance, however, that the Companys vendors will continue to supply
data to the Company on current terms or that the Company will be able to
establish new or extend current vendor relationships to ensure acquisition of
information in a timely and efficient manner and on acceptable commercial
terms. If the Company were unable to maintain or develop relationships with
vendors that would allow it to obtain sufficient quantities of reliable
information on acceptable commercial terms, such inability could have a
material adverse effect on the Companys business, prospects, financial
condition and results of operations.

Risk
of Expansion and Implementation of Growth Strategy.
The Companys growth and expansion have placed, and may continue to place, a
strain on the Companys management, administrative, operational, financial and
technical resources and increased demands on its systems and controls. Demands
on the Companys network resources and technical staff and resources have grown
rapidly with the Companys expanding customer bases. A failure to effectively
provide customer and technical support services will adversely affect the
Companys ability to attract and maintain its customer base. The Company
expects to experience continued strain on its operational systems as it
develops, operates and maintains its network. Expected increases in the
Companys Internet client base will produce increased demands on sales,
marketing and administrative resources, its engineering and technical
resources, and its customer and technical support resources. The Company
believes that it will need, both in the short-term and the long-term, to hire
additional sales and marketing and technical personnel as well as qualified
administrative and management personnel in the accounting and finance areas to
manage its financial control systems. In addition, the Company will need to
hire or to train managerial and support personnel. Although the Company has
hired additional personnel and upgraded certain of its systems, there can be no
assurance that the Companys administrative, operating and financial control
systems, infrastructure, personnel and facilities will be adequate to support
the Companys future operations or maintain and effectively adapt to future
growth.

There can
be no assurance that the Company will be able to build its infrastructure, add
services, expand its customer bases or implement the other features of its
business strategy at the rate or to the extent presently planned, or that its
business strategy will be successful. The Companys ability to continue to grow
may be affected by various factors, many of which are not within the Companys
control, including U.S. and foreign regulation of the Internet industry,
competition and technological developments. The inability to continue to
upgrade the networking systems or the operating and financial control systems,
the inability to recruit and hire necessary personnel or the emergence of
unexpected expansion difficulties could have a material adverse effect on the Companys
business, prospects, financial condition and results of operations.

22

Risks
of Network Failure. The success of the Company is
largely dependent on its ability to deliver high quality, uninterrupted access
to its product over the Internet. Any system or network failure that causes
interruptions in the Companys Internet operations could have a material
adverse effect on the business, financial condition or results of operations of
the Company. The Companys operations are dependent on its ability to
successfully expand its network and integrate new and emerging technologies and
equipment into its network, which are likely to increase the risk of system
failure and cause unforeseen strain upon the network. The Companys operations
also are dependent on the Companys protection of its hardware and other
equipment from damage from natural disasters such as fires, floods, hurricanes,
and earthquakes, or other sources of power loss, telecommunications failures or
similar occurrences.

Significant
or prolonged system failures could damage the reputation of the Company and
result in the loss of customers. Such damage or losses could have a material
adverse effect on the Companys ability to obtain new subscribers and
customers, and on the Companys business, prospects, financial condition and
results of operations.

Security
Risks. Despite the implementation of network
security measures by the Company, such as limiting physical and network access
to its routers, its Internet access systems and information services are
vulnerable to computer viruses, break-ins and similar disruptive problems
caused by its customers or other Internet users. Such problems caused by third
parties could lead to interruption, delays or cessation in service to the
Companys Internet customers. Furthermore, such inappropriate use of the
Internet by third parties could also potentially jeopardize the security of
confidential information stored in the computer systems of the Companys
customers and other parties connected to the Internet, which may deter
potential subscribers. Persistent security problems continue to plague public
and private data networks. Recent break-ins, worms and viruses reported in
the press and otherwise have reached computers connected to the Internet at
major corporations and Internet access providers and have involve the theft of
information, including incidents in which hackers bypassed firewalls by posing
as trusted computers. Alleviating problems caused by computer viruses, worms,
break-ins or other problems caused by third parties may require significant
expenditures of capital and resources by the Company, which could have a
material adverse effect on the Company. Until more comprehensive security
technologies are developed, the security and privacy concerns of existing and
potential customers may inhibit the growth of the Internet service industry in
general and the Companys customer base and revenues in particular. Moreover,
if the Company experiences a breach of network security or privacy, there can
be no assurance that the Companys customers will not assert or threaten claims
against the Company based on or arising out of such breach, or that any such
claims will not be upheld, which could have a material adverse effect on the
Companys business, prospects, financial condition and results of operations.

Disallowance
of NOL Carryovers. As of December 31, 2006, the
Company had approximately $5.2 million of net operating loss (NOL)

23

carryovers, expiring in varying amounts over the next twenty (20)
years, which it believes may be available to shelter future taxable income, if
any. While the Companys view is predicated upon the advice of counsel, the
Company does not intend to seek a ruling from the Internal Revenue Service
(IRS) as to the availability of its NOLs and neither the Companys views nor
counsels advice is binding on the IRS. Moreover, counsels advice is in turn
predicated on the accuracy of certain factual assumptions, including
assumptions as to the value of its respective preferred and common equity
interests as of certain relevant dates, which are in turn based upon the
opinion of the independent directors of the Company. Since these factual
determinations are important to the tax conclusions, a ruling on this issue
would not be available from the IRS, since it does not issue rulings on factual
issues. There can be no assurance that such assumptions would be sustained if
challenged by the IRS. If a successful challenge were maintained, then the sale
of shares of common stock in its 1999 private placement, together with other
owner-shifts within the prior three years, could have resulted in an
ownership change, in which event the NOL carryovers would be lost in their
entirety. In addition, the issuance of shares of common stock in the 2003
private placement, and future issuances by the Company of its equity
securities, could result in an ownership change which, depending upon the
timing thereof, would in turn cause a limitation on the amount of NOL
carryovers which can be used in any one year. Any inability to utilize these
NOLs or any material limitation on their availability would adversely effect
the Companys after-tax cash flow and, accordingly, its financial condition and
results of operations.

Risks
Associated with Domain Names. The Company
currently utilizes its domain names CreditRiskMonitor.com and crmz.com in
its business. The acquisition and maintenance of domain names generally is
regulated by governmental agencies and their designees. For example, in the
United States, the National Science Foundation has appointed Network Solutions,
Inc. as the exclusive registrar for the .com, .net and .org generic
top-level domains. The regulation of domain names in the United States and in
foreign countries is subject to change. Governing bodies may establish
additional top-level domains, appoint additional domain name registrars or
modify the requirements for holding domain names. As a result, there can be no
assurance that the Company will be able to acquire or maintain relevant domain
names in the United States and all other countries in which it may conduct
business. Furthermore, the relationship between regulations governing domain
names and laws protecting trademarks and similar proprietary rights is unclear.
The Company, therefore, may be unable to prevent third parties from acquiring
domain names that are similar to, infringe upon or otherwise decrease the value
of its trademarks and other proprietary rights. Any such inability could have a
material adverse effect on the Companys business, prospects, financial
condition and results of operations.

Governmental
Regulation and Legal Uncertainties. The Company is
not currently subject to direct regulation by any domestic or foreign
governmental agency, other than regulations applicable to businesses generally
and laws or regulations directly applicable to access to online commerce.
However, due to the increasing popularity and use of

24

the Internet and other online services, it is possible that a number of
laws and regulations may be adopted with respect to the Internet or other
online services covering issues such as user privacy, pricing, content,
copyrights, distribution and characteristics and quality of products and
services. Furthermore, the growth and development of the market for online
commerce may prompt calls for more stringent consumer protection laws that may
impose additional burdens on those companies conducting business online. The
adoption of any additional laws or regulations may decrease the growth of the
Internet or other online services, which could, in turn, decrease the demand
for the Companys products and services and increase the Companys cost of
doing business, or otherwise have a material adverse effect on the Companys
business, prospects, financial condition and results of operations. Moreover,
the applicability to the Internet and other online services of existing laws in
various jurisdictions governing issues such as property ownership, sales and
other taxes, libel and personal privacy is uncertain and may take years to
resolve. Any such new legislation or regulation, the application of laws and
regulations from jurisdictions whose laws do no currently apply to the
Companys business, or the application of existing laws and regulations to the
Internet and other online services could have a material adverse effect on the
Companys business, prospects, financial condition and results of operations.

Proprietary
Rights. The Company relies and expects to continue
to rely on a combination of copyright, trademark and trade secret laws and
contractual restrictions to establish and protect its technology. The Company
does not currently have any issued patents or registered copyrights.

The Company
has a policy to require employees and consultants to execute confidentiality
and technology ownership agreements upon the commencement of their
relationships with the Company. There can be no assurance that the steps taken
by the Company will be adequate to prevent misappropriation of its technology
or other proprietary rights, or that the Companys competitors will not
independently develop technologies that are substantially equivalent or
superior to the Companys technology. There can be no assurance that the
Companys trademark applications will result in any trademark registrations, or
that, if registered, any registered trademark will be held valid and
enforceable if challenged.

In
addition, to the extent the Company becomes involved in litigation to enforce
or defend its intellectual property rights, such litigation can be a lengthy
and costly process causing diversion of effort and resources by the Company and
its management with no guarantee of success.

Sarbanes-Oxley
Act of 2002. Beginning with the
enactment of the Sarbanes-Oxley Act of 2002, a significant number of new
corporate governance requirements have been adopted or proposed by the SEC.
Although we currently expect to comply with all current and future requirements,
we may not be successful in complying with these requirements in the future. In
addition, certain of these requirements may require us to make changes to our
corporate governance.

25

ITEM 7.
FINANCIAL
  STATEMENTS.The
information required by Item 7, and an index thereto, appears at pages F-1 to
F-19 (inclusive) of this Report on Form 10-KSB.

ITEM 8.
CHANGES IN AND
  DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.None.

ITEM 8A.
CONTROLS AND PROCEDURES.The
Companys management, with the participation of the Companys Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of the
Companys disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended)
as of the end of the period covered by this report. Based on that evaluation,
the Companys Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of such period, the Companys disclosure controls
and procedures are effective.

There have
not been any changes in the Companys internal control over financial reporting
(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities
Exchange Act of 1934, as amended) during its fiscal fourth quarter that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting. Management is aware that
there is a lack of segregation of duties due to the small number of employees
dealing with general administrative and financial matters. However, management
has decided that considering the employees involved and the control procedures
in place, risks associated with such lack of segregation are insignificant and
the potential benefit of adding employees to clearly segregate duties do not
justify the expenses associated with such increase.

ITEM 8B.
OTHER INFORMATION.None.

26

PART III

ITEM 9.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.Directors and Executive Officers

The
following table sets forth certain information with respect to the directors
and executive officers of the Company and the period such persons held their
respective positions with the Company.

Name

Age

Principal
  Occupation/Position
  Held with Company

Officer or
  Director
  SinceJerome S. Flum

66

Chairman
  of the Board/President/Chief Executive Officer

1983William B. Danner

50

Senior
  Vice President/Chief Operating Officer

2005Lawrence Fensterstock

56

Senior
  Vice President/Chief Financial Officer/ Secretary

1999Jeffrey S. Geisenheimer

41

Director

2005Richard J. James

67

Director

1992Andrew J. Melnick

65

Director

2005Jerome S.
Flum was appointed President and
Chief Executive Officer of the Company and Chairman of the Board of Directors in
June 1985. From 1968 to 1985, Mr. Flum was in the investment business as an
institutional security analyst, research and sales partner at an investment
firm and then as a general partner of a private investment pool. Before
entering the investment business Mr. Flum practiced law, helped manage a U.S.
congressional campaign and served as a legal and legislative aide to a U.S.
congressman. Mr. Flum has been a guest lecturer at the Massachusetts Institute
of Technology/Sloan School of Management Lab for Financial Engineering. Mr.
Flum received a BS degree in Business Administration from Babson College and a
JD degree from Georgetown University Law School. Mr. Flum served as a
L/Corporal in the USMCR.

William B.
Danner joined the Company in May
2005 as Chief Marketing Officer and was appointed Chief Operating Officer in
October 2005. Mr. Danner brings to the Company over 20 years of financial
services and information services experience. His most recent experience
includes brand strategy and business development consulting for financial
services clients at his own firm, Danner Marketing.

27

Clients
included WellPoint and the Bowne & Co. Previously, he was at Citigate
Albert Frank, a marketing communications company in New York City, where he
provided strategic planning and brand consulting for a variety of leading
financial services organizations including Reuters Instinet and the CFA
Institute. From 1997 to 2001, Mr. Danner was Vice President of Market
Development at MetLifes employee-benefits business. Before joining MetLife, he
was Vice President, Strategic Planning at Dun & Bradstreet for over 5-1/2
years. He spent nearly the first 10 years of his career at General Electric
Company, working in increasingly responsible positions at GE Information
Services and GE Capital. Mr. Danner earned a BA in economics at Harvard College
and an MBA at Harvard Business School.

Lawrence
Fensterstock joined the Company
and was elected to his current offices in January 1999. Previously, he joined
Market Guide Inc. in September 1996 to assist in the formation of its credit
information services division. From 1993 to 1996 he was with Information
Clearinghouse Incorporated (ICI) and was closely involved in the formation of
its credit reporting service. In addition to being responsible for the
publication of the various facets of this credit reporting service, he was
chief operating and financial officer of ICI. From August 1989 through October
1992, he was vice president-controller, treasurer and corporate secretary for a
private entity formed to acquire Litton Industries office products operations
in a leveraged buyout. There, he spent 2-1/2 years acting as de facto chief
financial officer. Mr. Fensterstock is a certified public accountant who began
his career in 1973 with Arthur Andersen LLP. He has an MBA degree from The
University of Chicago Business School and a BA degree from Queens College.

Jeffrey S.
Geisenheimer is Chief Financial
Officer of Instant Information, Inc., a financial information services company
providing professional, collaborative solutions to the financial industry. In
this capacity he is responsible for the daily financial and operating
activities of the company. Prior to joining Instant Information in 2005, Mr.
Geisenheimer was Chief Financial Officer, from 2003 to 2005, of Moneyline
Telerate, Inc., which was acquired by Reuters in June 2005. Before that he
served as Chief Financial Officer, from 1999 to 2003, of Multex.com, Inc.,
which was acquired by Reuters in March 2003, and as Chief Financial Officer,
from 1996 to 1999, of Market Guide, Inc., which was acquired by Multex in
September 1999. Mr. Geisenheimer received a Bachelor of Business Administration
degree in Banking and Finance and a Master of Business Administration degree in
Accounting from Hofstra University.

Richard J.
James is a Consultant for Sigma
Breakthrough Technologies, Inc., working with leading international and
domestic Fortune 500 companies to improve their new product development and operational
processes, since 2005. Prior to this, Mr. James served as the Technical Manager
for Polaroid Corporations Consumer Hardware Division, supporting manufacturing
plants in Scotland, China and the United States, from 1980 until 2002. In this
role he was responsible for increasing the business performance of Polaroids
instant consumer cameras through improved manufacturing processes and product
redesigns. From 1968 through 1979, Mr. James was President of James

28

Associates, a
group of businesses involving accounting and tax preparation, small business
consulting, real estate sales and rentals, and retail jewelry sales. Mr. James
is a founding Board member and VP Finance of the Boston Chapter of the Society
of Concurrent Product Development. Mr. James holds a BS in Chemical Engineering
from Northeastern University and has completed extensive managerial and
technical subjects. Mr. James served as a 1st Lieutenant in the U.S.
Army.

Andrew J.
Melnick retired from Goldman,
Sachs & Co. at the end of 2004. He joined Goldman Sachs in 2002 as
Co-Director of its Global Investment Research Division and a member of its
Management Committee. Prior to joining Goldman Sachs, he was Senior Vice
President and Director of the Global Securities and Economics Research Group of
Merrill Lynch, since 1988. During his 13 years at Merrill Lynch, Mr. Melnick
expanded the Firms Research Group from primarily a domestic effort to one with
research offices in 26 countries around the world. During that period Merrill Lynch
was ranked as the top research department in nearly all regions of the world
including six straight times as the number one equity research department in
the United States. Previous employment: President of Woolcott & Co. a
boutique research and investment banking firm; Director of Research and a
Partner of L.F. Rothschild Unterberg Towbin; and Senior Analyst at Drexel
Burnham Lambert. He is a Chartered Financial Analyst (C.F.A.). Mr. Melnick
served as a 1st Lieutenant in the U.S. Army.

The
Companys By-Laws provide that (a) directors shall be elected to hold office
until the next annual meeting of stockholders and that each director, including
a director elected to fill a vacancy, shall hold office until the expiration of
the term for which the director was elected and until a successor has been
elected, and (b) officers shall hold office until their successors are chosen
by the Board of Directors, except that the Board may remove any officer at any
time.

The Audit Committee

The
Audit Committee shall assist the Board of Directors in fulfilling its
responsibility to the shareholders, potential shareholders and investment
community relating to corporate accounting, reporting practices of the Company
and the quality and integrity of the Companys financial reporting. To fulfill
its purposes, the Committees duties shall include to:


Appoint,
  evaluate, compensate, oversee the work of, and if appropriate terminate, the
  independent auditor, who shall report directly to the Committee.
Approve in
  advance all audit engagement fees and terms of engagement as well as all
  audit and non-audit services to be provided by the independent auditor.
Engage
  independent counsel and other advisors, as it deems necessary to carry out
  its duties.29

The
Audit Committee currently consists of its outside directors  Jeffrey
Geisenheimer, Richard James and Andrew Melnick, all of whom are audit committee
financial experts and are independent, as such terms are defined by the SEC.

Compliance with Section 16(a) of the of 1934

Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the
Companys directors and officers, and persons who own more than 10% of a
registered class of the Companys equity securities, to file with the
Securities and Exchange Commission (SEC) initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Such persons are required by SEC regulation to furnish the Company
with copies of all Section 16(a) reports they file.

To
the Companys knowledge, based solely on its review of the copies of such
reports received by it with respect to fiscal 2006, or written representations
from certain reporting persons, the Company believes that all filing
requirements applicable to its directors, officers and persons who own more
than 10% of a registered class of the Companys equity securities have been
timely complied with, except that a Form 4 for Jerome Flum with respect to one
transaction was filed late.

Code of Ethics

CRMZs
Board of Directors has adopted a Code of Ethics for its Principal Executive
Officer and Senior Financial Officers. This Code applies to the Companys Chief
Executive Officer and Chief Financial Officer (who also is the Companys
principal accounting officer).

ITEM 10.
EXECUTIVE COMPENSATION.The
following table shows all cash compensation paid or to be paid by the Company
during the fiscal years indicated to the chief executive officer and all other
executive officers of the Company as of the end of the Companys last fiscal
year.

SUMMARY COMPENSATION TABLEName and Principal
  Position

Year

Salary

Option
  Awards(1)

All Other
  Compensation

TotalJerome S. Flum,


2006

$
145,000

$
183

$
15,000
(2)
$
160,183Chairman, President 
  and Chief Executive 
  Officer


2005

$
145,667

$
183

$
-0-

$
145,850William B. Danner,


2006

$
150,000

$
16,823

$
-0-

$
166,823Senior Vice President


2005

$
97,708

$
7,963

$
-0-

$
105,671Lawrence Fensterstock,


2006

$
153,365

$
683

$
-0-

$
154,048Senior Vice President


2005

$
144,833

$
683

$
-0-

$
145,516(1)Represents the compensation costs of
stock option awards for financial reporting purposes for the year under SFAS
123R, rather than

30

an amount paid
to or realized by the Named Executive Officer. See Note 4 of the
Notes to Consolidated Financial Statements for a discussion of the assumptions
used in calculating the aggregate grant date fair value computed in accordance
with SFAS 123R. The SFAS 123R value as of the grant date for stock options is
spread over the number of months of service required for the grant to become
non-forfeitable. There can be no assurance that the FAS 123R amounts will ever
by realized.

(2) Beginning January 20, 1999 and
continuing through June 30, 2003, in order to conserve the Companys cash
during this start-up period, Mr. Flum agreed to defer a portion of his annual
salary. As of June 30, 2003, the cumulative non-interest bearing amount
deferred was $238,750. In July 2004, the Companys Board of Directors agreed to
issue 200,000 shares of the Companys common stock with a fair value of $90,000
as partial payment of this liability as well as paying, in cash, the balance to
the Chief Executive Officer, representing the tax gross-up on this stock
award, thereby reducing the cumulative deferred amount by approximately
$150,000 to $88,890. In December 2006, the Companys Board of Directors agreed
to allow Mr. Flum to exercise stock options for 15,000 shares of the Companys
common stock with an exercise price of $15,000 as partial payment of this
liability as well as paying, in cash, the balance to Mr. Flum, representing the
tax gross-up on this stock issuance. This transaction reduced the cumulative
deferred amount still payable to $58,890. The full amount of his compensation,
including the deferred amount, is reflected in the Companys financial
statements.

Outstanding Equity Awards

No
stock options, stock awards or stock appreciation rights were granted to the
Companys executive officers during the last fiscal year.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-ENDName

Number of
  Securities
  Underlying
  Unexercised
  Options
  (#)
  Exercisable

Number of
  Securities
  Underlying
  Unexercised
  Options
  (#)
  Un-
  exercisable

Equity
  Incentive
  Plan
  Awards:
  Number of
  Securities
  Underlying
  Unexercised
  Unearned
  Options
  (#)

Option
  Exercise
  Price
  ($)

Option
  Expiration
  DateJerome S. Flum

5,000


-0-


-0-


$
1.0000


07-31-08William B. Danner

-0-


100,000


-0-


$
1.0000


05-09-15-0-


50,000


-0-


$
1.2500


10-06-15Lawrence Fensterstock

150,000


-0-


-0-


$
0.0001


08-25-08-0-


15,000


-0-


$
1.0000


12-19-11-0-


5,000


-0-


$
1.0000


07-13-13The
closing market price of the Companys common stock on

31

December 31,
2006 was $3.00 per share.

All
of the options granted may be exercised after three years in installments upon
the Company attaining certain specified gross revenue and pre-tax profit margin
objectives as set forth in the table below, unless such objectives are modified
in the sole discretion of the Board of Directors. In order to achieve the
vesting of the applicable percentage of options at each level, both the minimum
sales amount and the pre-tax operating margin tests for that level must be met.

MINIMUM ANNUALLevel

Gross Sales

Pre-Tax Operating
  Margin

Options
  Vested

Cumulative
  Options Vested1

$
3 Million

20
%

6.7
%

6.7
%2

$
4 Million

23
%

6.7
%

13.4
%3

$
5 Million

27
%

10.0
%

23.4
%4

$
6 Million

36
%

10.0
%

33.4
%5

$
7.5 Million

39
%

13.3
%

46.7
%6

$
9 Million

42
%

13.3
%

60.0
%7

$
11 Million

45
%

16.6
%

76.6
%8

$
14 Million

48
%

16.6
%

93.2
%9

$
17 Million

48
%

6.8
%

100.0
%Notwithstanding
that the objectives may not have been met in whole or in part, each of the
foregoing performance-based options will vest in full on a date which is two
years prior to the expiration date of the option or, in the event of a change
in control, will vest in full at the time of such change in control.

32

Directors Fees

Commencing
September 1994, non-employee directors receive $450 for each Board of
Directors meeting attended, up to a maximum payment of $1,800 per Director per
calendar year.

DIRECTOR COMPENSATIONName

Fees Earned
  or Paid in
  Cash
  ($)

Option
  Awards
  ($)(1)

Total
  ($)Jeffrey S. Geisenheimer

$
1,350

$
2,427

$
3,777Richard J. James

$
1,350

$
108

$
1,458Andrew J. Melnick

$
900

$
1,359

$
2,259(1) Represents the compensations costs for
financial reporting purposes for the year under SFAS 123R. See Note 4 to the
Notes to Consolidated Financial Statements for the assumptions made in
determining SFAS 123R values.

ITEM 11.
SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND
  RELATED STOCKHOLDER MATTERS.The
following table sets forth as of March 9, 2007 information regarding the
beneficial ownership of the Companys voting securities (i) by each person who
is known to the Company to be the owner of more than five percent of the
Companys voting securities, (ii) by each of the Companys directors and
executive officers, and (iii) by all directors and executive officers of the
Company as a group. Except as indicated in the following notes, the owners have
sole voting and investment power with respect to the shares:

33

Name ofBeneficial
  Owner

Amount and
  Nature ofBeneficial
  Ownership(1)

Percent ofClassFlum Partners(2)

4,897,128


62.39
%Jerome S. Flum

5,380,353
(3)(4)

68.54
%William B. Danner

11,395



*Lawrence Fensterstock

150,000


1.91
%Jeffrey S. Geisenheimer

58,653



*Richard J. James

37,000



*Andrew J. Melnick

10,000



*All directors and officers

5,647,401
(3)(4)

71.95
%(as a group (6 persons))*          less than 1%

(1) Does not give effect to (a) options to
purchase 461,500 shares of Common Stock granted to 10 officers and employees
pursuant to the 1998 Long Term Incentive Plan of the Company, and (b) options
to purchase an aggregate of 79,000 shares granted to the non-employee directors
pursuant to the 1998 Long Term Incentive Plan of the Company. All of the
foregoing options are not exercisable within sixty days. Includes 2,000 shares
of Common Stock issued to Flum Partners in consideration of loans to the
Company. Includes options to purchase 5,000 and 150,000 shares of Common Stock
granted to Messrs. Flum and Fensterstock, respectively, which are immediately
exercisable

(2) The sole general partner of Flum
Partners is Jerome S. Flum, Chairman of the Board, President and Chief
Executive Officer of the Company.

(3) Includes 4,897,128 shares owned by Flum
Partners, of which Mr. Flum is the sole general partner, which are also deemed
to be beneficially owned by Mr. Flum because of his power, as sole general
partner of Flum Partners, to direct the voting of such shares held by the
partnership. Mr. Flum disclaims beneficial ownership of the shares owned by
Flum Partners. The 5,380,353 shares of Common Stock, or 68.54% of the
outstanding shares of Common Stock, may also be deemed to be owned,
beneficially and collectively, by Flum Partners and Mr. Flum, as a group,
within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the Act).

(4) Includes 2,000 shares of Common Stock
owned by a grandchild of Mr. Flum, the beneficial ownership of which is
disclaimed by Mr. Flum.

The
Companys equity compensation plan approved by stockholders is the 1998 Long-Term
Incentive Plan.

The
following table summarizes information about the Companys common stock that
may be issued upon the exercise of options, warrants

34

and rights
under all equity compensation plans of the Company as of December 31, 2006.

Plan category

Number of
  securities
  to be issued
  upon
  exercise of
  outstanding
  options,
  warrants and
  rights

Weighted
  average
  exercise price
  of
  outstanding
  options,
  warrants
  and rights

Number of
  securities
  remaining
  available for
  future
  issuance under
  equity
  compensation
  plans
  (excluding
  securities
  reflected in
  first column)Equity compensation plans approved by stockholders

695,500


$
0.8372

717,500Equity compensation plans not approved by stockholders







Total

695,500


$
0.8372

717,500ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
  INDEPENDENCE.There
were no such reportable relationships or related transactions in 2006.

35

ITEM 13.
EXHIBITS.(a)
Exhibits2
-
Copy of the
  Asset Purchase Agreement dated December 29, 1998. (1)3 (i)
-
Copy of the
  Companys Amended and Restated Articles of Incorporation dated as of May 7,
  1999. (3)3 (ii)
-
Copy of the
  Companys By-Laws as amended April 27, 1987 and May 11, 1999. (5)10-C
-
Copy of
  Companys 1998 Long-Term Incentive Plan. (2)14
-
CreditRiskMonitor.com, Inc. Code of Ethics
  for Principal Executive Officer and Senior Financial Officers. (4)31.1*
-
Certification
  of Chief Executive Officer.31.2*
-
Certification
  of Chief Financial Officer.32.1*
-
Certification of Chief Executive Officer Pursuant
to 18 U.S.C.
  Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.32.2*
-
Certification of Chief Financial Officer Pursuant
to 18 U.S.C.
  Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.(1)
Filed as an
  Exhibit to Registrants Report on Form 8-K dated January 19, 1999 (File No.
  1-10825) and incorporated herein by reference thereto.(2)
Filed as an
  Exhibit to Registrants Annual Report on Form 10-KSB for the fiscal year
  ending December 31, 1998 (File No. 0-10825) and incorporated herein by
  reference thereto.(3)
Filed as an
  Exhibit to Registrants Annual Report on Form 10-KSB for the fiscal year
  ending December 31, 1999 (File No. 1-10825) and incorporated herein by
  reference thereto.(4)
Filed as an
  Exhibit to Registrants Annual Report on Form 10-KSB for the fiscal year
  ending December 31, 2003 (File No. 1-10825) and incorporated herein by
  reference thereto.(5)
Filed as an
  Exhibit to Registrants Annual Report on Form 10-KSB for the fiscal year
  ending December 31, 2005 (File No. 1-10825) and incorporated herein by
  reference thereto.*
Filed herewith.DOCUMENTS AVAILABLE UPON REQUEST

All
exhibits indicated above are available upon request and payment of a reasonable
fee approximating the Companys cost of providing and mailing the exhibits by
writing to:

Office
of the Secretary, CreditRiskMonitor.com, Inc., 704 Executive Boulevard, Suite
A, Valley Cottage, NY 10989.

ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.The aggregate fees billed to the Company by
J.H. Cohn LLP for professional services rendered for the last two fiscal years
are as follows:

36

Fiscal Year Ended
  December 31,2006

2005Audit fees (1)

$
39,000

$
40,825Audit
  related fees





Tax fees (2)


8,000


6,000All other
  fees





Total fees

$
47,000

$
46,825(1)
Consists of fees for services provided in connection with the audit
  of the Companys financial statements and review of the Companys quarterly
  financial statements.(2)
Consists of fees for preparation of Federal and state income tax
  returns.The
engagement of J.H. Cohn LLP for the 2006 and 2005 fiscal years and the scope of
audit-related services, including the audits and reviews described above, were
all pre-approved by the Audit Committee.

The
policy of the Audit Committee is to pre-approve the engagement of the Companys
independent auditors and the furnishing of all audit and non-audit services.

37

SIGNATURES

In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

CREDITRISKMONITOR.COM, INC.
(REGISTRANT)

Date: March
  30, 2007
By:
/s/
Jerome S.
  Flum
  Jerome S. Flum
  Chairman of the Board and
  Chief Executive OfficerIn
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Date: March
  30, 2007
By:
/s/
Jerome S.
  Flum
  Jerome S. Flum
  Chairman of the Board and
  Chief Executive OfficerDate: March
  30, 2007
By:
/s/
Lawrence
  Fensterstock
  Lawrence Fensterstock
  Chief Financial OfficerDate: March
  30, 2007
By:
/s/
Jeffrey S.
  Geisenheimer
  Jeffrey S. Geisenheimer
  DirectorDate: March
  30, 2007
By:
/s/
Richard J.
  James
  Richard J. James
  DirectorDate: March
  30, 2007
By:
/s/
Andrew J.
  Melnick
  Andrew J. Melnick
  Director38

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGEREPORT OF INDEPENDENT
  REGISTERED PUBLIC ACCOUNTING FIRM
F-2CONSOLIDATED FINANCIAL STATEMENTSConsolidated Balance Sheets - December 31,
  2006 and 2005
F-3Consolidated Statements of Operations -
  Years Ended December 31, 2006 and 2005
F-4Consolidated Statements of Stockholders
  Equity Years Ended December 31, 2006 and 2005
F-5Consolidated Statements of Cash Flows -
  Years Ended December 31, 2006 and 2005
F-6Notes to Consolidated Financial Statements
F-7F-1

Report of Independent
Registered Public Accounting Firm

To the Board
of Directors and 
Stockholders of CreditRiskMonitor.com, Inc.:

We have
audited the accompanying consolidated balance sheets of CreditRiskMonitor.com,
Inc. and Subsidiary as of December 31, 2006 and 2005, and the related
consolidated statements of operations, stockholders equity and cash flows for
the years then ended. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express
and opinion on these consolidated financial statements based on our audits.

We conducted
our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our
opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
CreditRiskMonitor.com, Inc. and Subsidiary as of December 31, 2006 and 2005,
and their consolidated results of operations and cash flows for the years then
ended, in conformity with accounting principles generally accepted in the
United States.

As discussed
in Note 2 to the consolidated financial statements, the Company changed the
manner in which it accounts for share-based compensation in 2006.

/s/ J.H. Cohn
LLP

Jericho, New
York 
March 7, 2007

F-2

CREDITRISKMONITOR.COM, INC. AND
SUBSIDIARYCONSOLIDATED BALANCE SHEETS
December 31, 2006 and 2005

2006

2005ASSETSCurrent
assets:Cash and cash
equivalents

$
2,467,520

$
2,034,786Accounts
receivable, net of allowance of $30,000 and $43,677,
  respectively


647,484


658,603Other current
assets


297,267


191,137Total current
assets


3,412,271


2,884,526Property and
equipment, net


131,211


153,689Goodwill


1,954,460


1,954,460Other
assets


27,753


33,854Total
assets

$
5,525,695

$
5,026,529LIABILITIES
AND STOCKHOLDERS EQUITYCurrent
liabilities:Deferred
revenue

$
2,985,724

$
2,607,569Accounts
payable


78,364


125,590Accrued
expenses


415,645


157,676Current
portion of long-term debt


122,870


110,893Current
portion of capitalized lease obligations


18,437


26,467Total current
liabilities


3,621,040


3,028,195Long-term
debt, net of current portion:Promissory
note


286,940


409,810Capitalized
lease obligations





18,437286,940


428,247Other
liabilities


73,392


95,812Total
liabilities


3,981,372


3,552,254Stockholders equity:Preferred
stock, $.01 par value; authorized 5,000,000 shares; none
  issued





Common stock,
$.01 par value; authorized 25,000,000 shares; issued and
  outstanding 7,694,462 and 7,679,462 shares, respectively


76,944


76,794Additional
paid-in capital


28,177,684


28,122,383Accumulated
deficit


(26,710,305
)

(26,724,902
)Total
stockholders equity


1,544,323


1,474,275Total
liabilities and stockholders equity

$
5,525,695

$
5,026,529The accompanying notes are an integral part
of these consolidated financial statements.

F-3

CREDITRISKMONITOR.COM, INC. AND
SUBSIDIARYCONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2006 and 2005

2006

2005Operating
revenues

$
4,322,785

$
3,841,833Operating
expenses:Data and
product costs


1,404,182


1,113,602Selling,
general and administrative expenses


2,849,002


2,679,203Depreciation
and amortization


65,951


66,302Total
  operating expenses


4,319,135


3,859,107Income (loss)
from operations


3,650


(17,274
)Other
income


68,285


31,492Gain on
settlement of litigation





1,100,000Interest
expense


(52,416
)

(66,091
)Income before
income taxes


19,519


1,048,127Provision for
state and local income taxes


4,922


2,058Net
income

$
14,597

$
1,046,069Net income per
share-basic and diluted

$
0.00

$
0.14The accompanying notes are an integral part
of these consolidated financial statements.

F-4

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 
Years Ended December 31, 2006 and 2005

Common Stock

Additional
  Paid-in
  Capital

Accumulated
  Deficit

Total
  Stockholders
  EquityShares

AmountBalance January
1, 2005


7,679,462

$
76,794

$
28,122,383

$
(27,770,971
)
$
428,206Net income











1,046,069


1,046,069Balance December
31, 2005


7,679,462


76,794


28,122,383


(26,724,902
)

1,474,275Net income











14,597


14,597Exercise of stock option
settled by
  reduction in accrued compensation


15,000


150


14,850





15,000Stock-based
compensation








40,451





40,451Balance December
31, 2006


7,694,462

$
76,944

$
28,177,684

$
(26,710,305
)
$
1,544,323The accompanying notes are an integral part of these consolidated
financial statements.

F-5

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS 
Years Ended December 31, 2006 and 2005

2006

2005Cash flows from operating
activities:Net
income

$
14,597

$
1,046,069Adjustments to
reconcile net income to net
  cash provided by operating activities:Depreciation


65,951


66,302Stock-based
compensation


40,451


Deferred
salary


(9,167
)

Deferred
rent


1,747


4,547Changes in operating assets and
  liabilities:Accounts
receivable, net


11,119


(21,382
)Other current
assets


(106,130
)

(19,118
)Other
assets


6,101


(13,812
)Deferred
revenue


378,155


386,336Accounts
payable


(47,226
)

(45,359
)Accrued
expenses


257,969


(61,314
)Net cash provided by operating
activities


613,567


1,342,269Cash flows from investing
activities:Purchase of
property and equipment


(43,473
)

(57,906
)Net cash used in investing
activities


(43,473
)

(57,906
)Cash flows from financing
activities:Payments on
promissory note


(110,893
)

(100,084
)Payments on
capital lease obligations


(26,467
)

(26,518
)Net cash used in financing
activities


(137,360
)

(126,602
)Net increase in cash and cash
equivalents


432,734


1,157,761Cash and cash equivalents at
beginning of
  year


2,034,786


877,025Cash and cash equivalents at
end of year

$
2,467,520

$
2,034,786Supplemental disclosure of cash
flow
  information:Cash paid
during the year for:Interest

$
53,450

$
77,936Income
taxes

$
4,922

$
2,058Payout of stock option exercise
through a
  reduction of accrued compensation

$
15,000

$
The accompanying notes are an integral part of these consolidated
financial statements.

F-6

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

CreditRiskMonitor.com, Inc.
(also referred to as the Company or CRMZ) provides a totally interactive
business-to-business Internet-based service designed specifically for corporate
credit professionals. This service is sold predominantly to corporations
located in the United States. In addition, the Company is a re-distributor of
international credit reports in the United States.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial
statements include the accounts of the Company and its wholly owned subsidiary,
Barbito Corp. All significant intercompany balances and transactions have been
eliminated in consolidation.

Use of Estimates

The preparation of financial
statements in conformity with accounting principles generally accepted in the
U.S. requires management to make estimates and assumptions. These estimates and
assumptions affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

Cash Equivalents

The Company considers all
highly liquid debt instruments with maturities of three months or less when
acquired to be cash equivalents.

Property and Equipment

Property and equipment are
recorded at cost. Depreciation is provided on the straight-line method over the
estimated useful life of the asset. Assets under capital leases are recorded at
the lower of the fair market value of the asset or the present value of future
minimum lease payments. Assets under capital leases are amortized on the
straight-line method over their primary term. Estimated useful lives are
generally as follows: fixtures, equipment and software  3 to 6 years;
capitalized leases  3 to 5 years; and leasehold improvements  lower of life or
term of lease.

Goodwill

In accordance with Statement
of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets,
goodwill and

F-7

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

other indefinite-lived intangible assets are no longer amortized,
but are reviewed for impairment at least annually and if a triggering event
were to occur in an interim period. Goodwill impairment is determined using a
two-step process. The first step of the impairment test is used to identify
potential impairment by comparing the fair value of a reporting unit to the
book value, including goodwill. If the fair value of a reporting unit exceeds
its book value, goodwill of the reporting unit is not considered impaired and
the second step of the impairment test is not required. If the book value of a
reporting unit exceeds its fair value, the second step of the impairment test
is performed to measure the amount of impairment loss, if any. The second step
of the impairment test compares the implied fair value of the reporting units
goodwill with the book value of that goodwill. If the book value of the
reporting units goodwill exceeds the implied fair value of that goodwill, an
impairment loss is recognized in an amount equal to that excess. The implied
fair value of goodwill is determined in the same manner as the amount of
goodwill recognized in a business combination. The Company completed its annual
goodwill impairment tests for 2006 and 2005 during the fourth quarter of each
year and determined there was no impairment of existing goodwill.

Long-Lived Assets

The Company reviews its
long-lived amortizable assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. Recoverability of assets held and used is
measured by a comparison of the carrying amount of an asset to undiscounted
pre-tax future net cash flows expected to be generated by that asset. An
impairment loss is recognized for the amount by which the carrying amount of
the assets exceeds the fair value of the assets. As of December 31, 2006,
management believes no impairment of long-lived assets has occurred.

Income Taxes

The Company provides for
deferred income taxes resulting from temporary differences between financial
statement and income tax reporting. Temporary differences are differences
between the amounts of assets and liabilities reported for financial statement
purposes and their tax bases. Deferred tax liabilities are recognized for
temporary differences that will be taxable in future years tax returns.
Deferred tax assets are recognized for temporary differences that will be
deductible in future years tax returns and for operating loss and tax credit
carryforwards. Deferred tax assets are reduced by a valuation allowance if it
is deemed more likely than not that some or all of the deferred tax assets will
not be realized.

Revenue Recognition

CRMZs domestic and
international service is sold on a subscription basis pursuant to customer
contracts that span varying periods of

F-8

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

time, but are generally for
a period of one year. The Company initially records amounts billed as accounts
receivable and defers the related revenue until persuasive evidence of an
arrangement exists, fees are fixed or determinable, and collection is
reasonably assured. Revenues are recognized ratably over the related
subscription period. Revenue from the Companys third-party international
credit report service is recognized as information is delivered and products
and services are used by customers.

Income Per Share

Income per share is computed
under the provisions of SFAS No. 128, Earnings Per Share. Amounts reported as
basic and diluted net income per share for each of the two years in the period
ended December 31, 2006 reflect the net income for the year divided by the
weighted average of common shares outstanding during the year and the weighted
average of common shares outstanding adjusted for the effects of potentially
dilutive securities (see Note 9).

Fair Value of Financial Instruments

The Company follows the
provisions of SFAS No. 107, Disclosure about Fair Value of Financial
Instruments. This pronouncement requires that the Company calculate the fair
value of financial instruments and include this additional information in the
notes to the financial statements when the fair value is different than the
book value of those financial instruments. The Company believes the recorded
value of cash and cash equivalents, accounts receivable, and accounts payable
and other liabilities approximates fair value because of the short maturity of
these financial instruments. The Companys promissory note was originally
discounted, as appropriate, to bear an interest rate that represents the cost
of borrowings with third-party lenders. Management believes that the carrying
value of the note approximates its fair value at December 31, 2006 and 2005.

Comprehensive Income

The Company adheres to the
provisions of SFAS No. 130, Reporting Comprehensive Income. This pronouncement
establishes standards for reporting and display of comprehensive income or loss
and its components (revenues, expenses, gains, and losses). The statement
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be classified by their nature.
Furthermore, the Company is required to display the accumulated balances of
other comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of the balance sheet. For the years ended
December 31, 2006 and 2005, there were no items that gave rise to other
comprehensive income or loss and net income equaled comprehensive income.

F-9

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Segment Information

The Company follows the
provisions of SFAS No. 131, Disclosures About Segments of an Enterprise and
Related Information. This pronouncement establishes standards for the way
public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. The pronouncement also establishes standards for related
disclosure about products and services, geographic areas and major customers.
The Company currently believes it operates in one segment.

Stock-Based Compensation

In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No.
123 (revised 2004) Share-Based Payment (SFAS 123R). SFAS 123R replaces SFAS
123 Accounting for Stock-Based Compensation, and supersedes APB Opinion No
25, Accounting for Stock Issued to Employees (APB 25). SFAS 123R
establishes standards for accounting for share-based payment transactions.
Share-based payment transactions are those in which an entity exchanges its
equity instruments for goods or services or in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entitys equity instruments or that may be settled by the issuance of
those equity instruments. SFAS 123R covers a wide range of share-based
compensation arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights and employee share purchase
plans. SFAS 123R requires a public entity to measure the cost of employee
services received in exchange for an award of equity instruments based on the
fair value of the award on the grant date (with limited exceptions). That cost
will be recognized in the entitys financial statements over the period during
which the employee is required to provide services in exchange for the award.

The
Company adopted SFAS 123R at the beginning of fiscal 2006 utilizing the
modified prospective method, which does not require restatement of prior
periods. The modified prospective method requires that compensation expense be
recorded for all unvested stock options and restricted stock awards over the
requisite service period (generally the vesting schedule).

Prior
to fiscal 2006, the Company measured compensation cost for employee stock
options and similar equity instruments using the intrinsic value-based method
of accounting prescribed by APB 25. APB 25 did not require any compensation
expense to be recorded in the financial statements if the exercise price of the
award was not less than the market price on the date of grant. Since all
options granted by the Company had exercise prices equal to or greater than the
market price on the date of grant, no compensation expense was recognized for
stock option grants prior to January 1, 2006.

F-10

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The
following table represents pro forma net income and pro forma net income per
share for the year ended December 31, 2005 had compensation cost been
determined using the fair value method:

2005Net incomeAs
reported

$
1,046,069Less: Total
stock-based employee compensation expense determined
  under fair value based method for all awards, net of related tax benefits or
  effects


(25,674
)Pro
forma

$
1,020,395Net income per share 
basic and dilutedAs
reported

$
0.14Pro
forma

$
0.13See Note 4 for more
information regarding the Companys stock compensation plan and the assumptions
used to prepare the pro forma information presented above.

Recently Issued Accounting Standards

The FASB and the SEC had issued
certain accounting pronouncements as of December 31, 2006 that will become
effective in subsequent periods; however, management does not believe that any
of those pronouncements would have significantly affected our financial
accounting measurements or disclosures had they been in effect during the
interim periods for which financial statements are included in this annual
report.

Reclassifications

Certain prior year amounts
have been reclassified to conform to the current year financial statement presentation.

Concentrations of Credit Risk

Financial instruments that
potentially subject the Company to concentrations of credit risk principally
consist of cash, cash equivalents and accounts receivable. The Company
maintains its cash and cash equivalents in bank deposit and other accounts, the
balances of which, at times, may exceed Federally insured limits. Exposure to
credit risk is reduced by placing such deposits in high credit quality
financial institutions.

The Company closely monitors
the extension of credit to its customers. The Companys accounts receivable
balance is net of an allowance for doubtful accounts. The Company does not
require collateral or other security to support credit sales, but provides an
allowance for doubtful accounts based on historical experience and specifically
identified

F-11

CREDITRISKMONITOR.COM,
INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

risks. Accounts receivable are charged off against the
allowance for doubtful accounts when management determines that recovery is
unlikely and the Company ceases collection efforts. The Company does not
believe that significant credit risk existed at December 31, 2006 and 2005.

NOTE 3 -
INCOME TAXES

The Company has generated net operating loss (NOL)
carryforwards for income tax purposes, which are available for carryforward
against future taxable income. At December 31, 2006, the Company had Federal
NOL carryforwards of approximately $5,231,000, which expire through 2026.

The actual tax expense for 2006 and 2005 differs from
the expected tax expense or benefit for those years (computed by applying the
applicable United States federal corporate tax rate to income before income
taxes) as follows:

2006

2005Computed expected benefit

$
2,928

$
419,251Permanent timing differences


292


808State and local income tax expense


4,922


2,058Decrease in valuation allowance


(3,220
)

(420,059
)State and local income tax expense

$
4,922

$
2,058The tax effects of temporary differences that give rise
to significant portions of the deferred tax assets at December 31, 2006 and
2005 are as follows:

2006

2005Deferred tax
  assets:Net operating
  loss carryforwards

$
2,090,806

$
2,211,016Other


61,155


54,441Total deferred
  tax assets


2,151,961


2,265,457Valuation
  allowance


(1,797,584
)

(1,967,613
)Net deferred tax
  assets


354,377


297,844Deferred tax
  liabilities:Goodwill
  amortization


(351,068
)

(290,674
)Fixed asset
  depreciation


(3,309
)

(7,170
)Total deferred
  tax liabilities


(354,377
)

(297,844
)Net deferred tax
  assets

$


$
The Company considers that the cumulative losses
incurred in recent years, excluding the effects of a non-recurring gain in
2005, creates a rebuttable presumption that a full valuation allowance
continues to be required for its deferred tax assets. Therefore, no deferred
tax benefit

F-12

CREDITRISKMONITOR.COM,
INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

has been recorded and a full valuation allowance has
been charged against the related deferred tax assets because the Company does
not consider it more likely than not that the deferred tax assets will be
realized.

The net change in the total valuation allowance for
the years ended December 31, 2006 and 2005 was a decrease of $170,029 and
$741,277, respectively.

NOTE 4 -
COMMON STOCK, STOCK OPTIONS, AND STOCK
APPRECIATION RIGHTS

Common
Stock

At December 31, 2006, 695,500 shares of the Companys
authorized common stock were reserved for issuance upon exercise of outstanding
options under its stock option plan.

Preferred
Stock

The Companys Articles of Incorporation provide that
the Board of Directors has the authority, without further action by the holders
of the outstanding common stock, to issue up to five million shares of
preferred stock from time to time in one or more series. The Board of Directors
shall fix the consideration to be paid, but not less than par value thereof,
and to fix the terms of any such series, including dividend rights, dividend
rates, conversion or exchange rights, voting rights, rights and terms of
redemption (including sinking fund provisions), the redemption price and the
liquidation preference of such series. As of December 31, 2006, the Company
does not have any preferred stock outstanding.

Stock
Options and Stock Appreciation Rights

At December 31, 2006, the Company has one stock option
plan: the 1998 Long-Term Incentive Plan.

The 1998 Long-Term Incentive Plan authorizes the grant
of incentive stock options, non-qualified stock options, stock appreciation
rights (SARs), restricted stock, bonus stock, and performance shares to
employees, consultants, and non-employee directors of the Company. The exercise
price of each option shall not be less than the fair market value of the common
stock at the date of grant. The total number of the Companys shares that may
be awarded under this plan is 1,500,000 shares of common stock. At December 31,
2006, there were options outstanding for 695,500 shares of common stock under
this plan.

Options expire on the date determined, but not more
than ten years from the date of grant. The plan terminates ten years from the
date of stockholder approval. All of the options granted may be exercised after
three years in installments upon the Company attaining certain specified gross
revenue and pre-tax margin objectives, unless such

F-13

CREDITRISKMONITOR.COM,
INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

objectives are modified in the sole discretion by the
Board of Directors. No modifications to
these criteria have been made.

Notwithstanding that the objectives may not be met in
whole or in part, these options will vest in full on a date that is two years
prior to the expiration date of the option or, in the event of a change in
control (as defined), will vest in full at time of such change in control.

There have been no transactions with respect to the
Companys stock appreciation rights during the years ended December 31, 2006
and 2005, nor are there any stock appreciation rights outstanding at December
31, 2006 and 2005.

Transactions with respect to the Companys stock
option plan for the years ended December 31, 2006 and 2005 are as follows:

Number
  of Shares

Weighted
  Average
  Exercise
  PriceOutstanding at
  January 1, 2005


546,500

$
0.8600Granted


340,500


1.1079Forfeited


(149,500
)

1.0000Outstanding at
  December 31, 2005


737,500

$
0.9461Forfeited


(27,000
)

3.7222Exercised


(15,000
)

1.0000Outstanding at
  December 31, 2006


695,500

$
0.8372As of December 31, 2006, there
were 717,500 shares of common stock reserved for the granting of additional
options.

The Company adopted SFAS 123R at the beginning of
fiscal 2006 utilizing the modified prospective method, which does not require
restatement of prior periods. The modified prospective method requires that
compensation expense be recorded for all stock options and restricted stock
awards unvested at the time of adoption over the remaining requisite service
period (generally the vesting schedule). Prior to fiscal 2006, the Company
measured compensation cost for employee stock options and similar equity
instruments using the intrinsic value-based method of accounting prescribed by
APB 25.

For the year ended December 31, 2006, the Company
recognized stock-based compensation expense of $40,451 related to outstanding
stock options according to the provisions of SFAS 123R, using the
modified-prospective transition method of which $7,810 and $32,641 is included
in Data and products costs and Selling, general and administrative expenses,
respectively, on the accompanying Consolidated Statements of Operations.

F-14

CREDITRISKMONITOR.COM,
INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

The fair value of each option is estimated on the date
of grant using the Black-Scholes option-pricing model that uses the weighted
average assumptions noted in the following table. Expected volatilities are
based on historical volatility of our stock through the date of grant. The
Company uses historical data to estimate the options expected term, which
represents the period of time that options granted are expected to be
outstanding. The risk-free interest rate used is based on the U.S. Treasury
constant maturities at the time of grant having a term that approximates the
expected life of the option.

No options were granted during the year ended December
31, 2006. The fair value of options granted during the year ended December 31,
2005, ranged from $0.24 to $1.11, with a weighted-average fair value of $0.52.
The fair value of options at date of grant was estimated using the
Black-Scholes model with the following weighted average assumptions:

Assumption


Year ended
  
  December 31,
  2005Risk-free interest rate


4.28%Expected dividend yield


0.00%Expected volatility factor


2.64Expected life of the option (years)


9The Company issues new shares upon the exercise of
options.

The following table summarizes information about the
Companys stock options outstanding at December 31, 2006:

Options Outstanding

Options ExercisableRange of
  Exercise Prices

Number
  Outstanding

Weighted
  Average
  Remaining
  Contractual
  Life
  (in years)

Weighted
  Average
  Exercise
  Price

Number
  Exercisable

Weighted
  Average
  Exercise
  Price$ 0.0001 - $ 0.9900


150,000

1.65


$
0.0001


150,000

$
0.0001$ 1.0000 - $ 1.2000


446,500

7.39


$
1.0000


5,000

$
1.0000$ 1.2100 - $ 1.6500


99,000

8.83


$
1.3712





695,500

6.36


$
0.8372


155,000

$
0.0324The aggregate intrinsic value represents the total
pretax intrinsic value, based on options with an exercise price less than the
Companys closing stock price of $3.00 as of December 31, 2006, which
would have been received by the option holders had those option holders
exercised their options as of that date. The aggregate intrinsic value of
options outstanding and exercisable as of December 31, 2006 was $1,504,235
and $459,985, respectively.

F-15

CREDITRISKMONITOR.COM,
INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

As of December 31, 2006, the total compensation cost
related to unvested stock-based awards granted to employees under the Companys
stock option plan but not yet recognized was $248,000. This cost will be
amortized on a straight-line basis over a weighted average term of 4.43 years
and will be adjusted for subsequent changes in estimated forfeitures.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

2006

2005Computer
  equipment and software

$
260,159

$
232,528Furniture and
  fixtures


70,391


54,549Leasehold
  improvements


35,855


35,855Capitalized
  lease


90,043


90,043456,448


412,975Less accumulated
  depreciation and amortization


(325,237
)

(259,286
)$
131,211

$
153,689NOTE 6 - PROMISSORY NOTE

In December 2002, the Company entered into a Note
Modification Agreement with Market Guide Inc. (MGI), which modified the
Consolidated Secured Promissory Note that had been executed in July 2001. The
new note bears interest at the rate of 9.5% per annum from January 1, 2003 and
is payable in 84 equal monthly installments of principal and interest of
$13,282 each, commencing January 31, 2003. The Company was required to discount
the new note by approximately $20,000 to yield an effective interest rate of
10.30% based on the carrying value of the old debt instrument.

The new note is secured by the assets originally
purchased from MGI and substantially all other assets of the Company and does
not contain any covenants.

If the Company is unable to generate sufficient cash
flow or otherwise obtain funds necessary to make the required payments on this
note, it would be in default under the terms thereof, which would permit the
holders of the note to accelerate the maturity of such indebtedness. Such a
default could have a material adverse effect on Companys business, prospects,
financial condition and results of operations.

The principal maturities on this note subsequent to
December 31, 2006 are as follows:

F-16

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

Year Ending 
  December 31,

Amount2007

$
122,8702008


136,1412009


150,799409,810Less current portion


122,870$
286,940NOTE 7 - ACCRUED
COMPENSATION

Beginning January 20, 1999 and continuing through June 30, 2003, the
Companys President and Chief Executive Officer agreed to defer a portion of
his annual salary. In December 2006, the Companys Board of Directors agreed to
allow the President and Chief Executive Officer to exercise stock options for
15,000 shares of the Companys common stock with an exercise price of $15,000
as partial payment of this liability as well as paying, in cash, the balance to
the President and Chief Executive Officer, representing the tax gross-up on
this stock issuance. This transaction reduced the cumulative deferred amount
still payable to $58,890. The full amount of his compensation, including the
deferred amount, is reflected in the Companys financial statements.

NOTE 8 - LEASE
COMMITMENTS

The Companys
operations are conducted from a leased facility, which is under an operating
lease that expires in 2009. The Company also leases certain equipment under
operating leases that expire through 2009. Rental expenses under operating
leases were $152,108 and $159,610 for the years ended December 31, 2006 and
2005, respectively.

In connection with the Companys relocation in 2004 it entered into two
capital leases for telephone equipment and computer equipment. Both of these
leases are for 36 months, have an implicit interest rate of approximately 10.8%
and provide for the Company to acquire the equipment for $1 at the end of the
lease.

F-17

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

Future minimum
lease payments for the capital lease and noncancelable operating leases at
December 31, 2006 are as follows:

Capital
  Lease
  Obligations

Operating
  Leases2007

$
19,167

$
115,7102008





105,9312009





61,432Total
  minimum lease payments


19,167

$
283,073Less amounts
  representing interest


73018,437Less current
  portion of capitalized lease obligations


18,437Long-term
  capitalized lease obligations

$
NOTE 9 - NET INCOME PER SHARE

The following
table sets forth the computation of basic and diluted net income per share:

2006


2005Net income

$
14,597

$
1,046,069Basic weighted average common
shares
  outstanding


7,680,591


7,679,462Net income per share - basic

$
0.00

$
0.14Diluted weighted average common
shares
  outstanding


7,950,989


7,679,462Net income per share - diluted

$
0.00

$
0.14For fiscal 2005, the computation
of diluted net income per share excludes the effects of the assumed exercise of
737,500 options since their inclusion would be anti-dilutive as their exercise
prices were above market value.

NOTE 10 - LEGAL PROCEEDINGS

On April 27, 2005, the Company executed an
agreement (the Stipulation of Settlement), which settled all of the lawsuits
between it and a competitor, as previously reported, and the competitor
simultaneously paid the Company $1.1 million. In addition, the competitor
agreed in the Stipulation of Settlement to assume certain potential liabilities
against the Company and to defend the Company in connection with the Decision
Strategies litigation discussed below and to indemnify the Company with respect
to all liabilities in excess of $25,000.

F-18

CREDITRISKMONITOR.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


In July 2004, the Company
commenced an action in Nassau County against Decision Strategies LLC (Decision
Strategies), the court-appointed forensic computer expert in the enforcement
proceeding that was settled, for breach of its services contract and seeking a
declaration of the rights of the parties under the terms of the contract. Also
in July 2004, Decision Strategies commenced an action in New York against the
Company and the competitor for fees in excess of the limitations provided in
the services contract. The parties reached a settlement in December 2005
whereby the Company paid to Decision Strategies the $25,000 maximum amount
agreed to in the Stipulation of Settlement.

F-19