CreditRiskMonitor.com Inc. Restates Financials, Flags ~$2.0M Tax Liabilities

What Happened

• On Aug. 3, 2026 the audit committee concluded (reported in an 8-K filed Aug. 6, 2026, Item 4.02) that previously issued financial statements for multiple quarterly and annual periods should no longer be relied upon. The company determined, after a nexus study with an external tax advisor, that it had economic and physical nexus in jurisdictions where it had not been collecting/remitting sales and use tax or filing income taxes.
• CreditRiskMonitor.com plans to restate financial statements for the affected periods. At the time of the filing the company estimated recording approximately $1,767,000 of sales tax (including interest) and approximately $210,000 of income tax (including interest) — about $1.98 million total — and expects the adjustments to affect accrued liabilities, income tax liabilities, retained earnings, SG&A, interest expense and income tax expense.
• The company identified a material weakness in internal control over financial reporting related to identifying and monitoring state/local tax nexus and has created a remediation plan. The audit committee and management discussed these matters with the independent auditor, CohnReznick LLP.

Key Details

• Affected periods: quarterly statements for March 31, 2025 & 2026; June 30, 2025; Sept. 30, 2024 & 2025; and audited financials for fiscal years ended Dec. 31, 2024 & 2025.
• Preliminary estimated tax liabilities: ~$1,767k (sales tax + interest) and ~$210k (income tax + interest); amounts are preliminary and may change.
• Material weakness: controls and disclosure procedures for state/local tax nexus were deemed ineffective; remediation plan in place and management will report conclusions in the 2026 Form 10-K.
• The audit committee, management and CohnReznick LLP have been involved; restatement process is ongoing.

Why It Matters

• Restatements and a disclosed material weakness can change previously reported earnings and retained earnings, and may affect investor confidence and comparability of past results.
• The nearly $2.0M preliminary tax liability will increase the company’s liabilities and could reduce past-period retained earnings and reported profitability for the affected periods.
• Investors should watch for the company’s restated financials and the 2026 Form 10-K for final amounts, the result of the remediation of internal controls, and any impact on upcoming periodic filings.