CRMZ 10-K & 10-Q changes, risk factors and insider trading

TheOur strategic priorities and plans for 2026 are to continue building on the improvement initiatives underway to enhance our value proposition to subscribers while continuing to achieve sustainable, profitable growth. However, the continuing uncertainty in the worldwide financial system has negatively impacted general business conditions. It is possible that a weakened economy could adversely affect our subscribers’ discretionary spending for financial risk information, or even their solvency, but wethe Company cannot predict whether or to what extent this will occur. The potential impact of AI on the SaaS industry and the ability of our Company to adapt to advancements in AI are additional uncertainties that may affect our business.

The following table presentssets forth selected financial information and statistics as of December 31, 20242025 and 20232024 (dollars in thousands):

As of December 31, 2024,2025, the Company had approximately $6.7$6.2 million in cash and cash equivalents, a decrease of approximately $4.3$426.3 millionthousand from December 31, 2023. This decrease was primarily the result of net cash used in investing activities with a shift towards longer duration U.S. Treasury securities, that carry a higher interest rate, relative to cash and cash equivalents.2024. The Company had approximately $8.8$12.6 million in non-current total held-to-maturity assets (current and non-current) comprised of U.S. Treasury securities, an increase of approximately $8.1$1.4 million, as compared to approximately $11.2 million fromas of December 31, 2023.2024.

The main component of current liabilities atas of December 31, 20242025 was unexpired subscription revenue of approximately $10.9 million, which should not require significant future cash outlay, as this is annual reoccurring revenue, other than the cost of preparation and delivery of the applicable commercial credit reports, which cost much less than the unexpired subscription revenue shown. Unexpired subscription revenue is recognized as income over the subscription term, which approximates 12 months.

Data and product costs increased approximately $789$301 thousand, or 10%,3%, for fiscal 20242025 compared to fiscal 2023.2024. This increase was due primarily to (1i) higher salary and related employee expenses mainly from new hires, pay raises to existing staff, and expansion of the expert network and (2ii) higher costs of third-party content due to price increases instituted by some of the Company’s major suppliers.suppliers, and (iii) higher hosted facility costs driven by increased production demands and the expiration of the Company’s leased office space on July 31, 2025.

Selling, general and administrative expenses increased approximately $313$732 thousand, or 3%,8%, for fiscal 20242025 compared to fiscal 2023.2024. This increase wasaligns duewith primarilythe toCompany’s growth strategy, driven by the (1i) higherimplementation salaryof and related employee expenses froma new hiresCustomer andRelationship payManagement raisesplatform, to(ii) existingrevamped staffclient services model, and (2iii) highertargeted customerexpansion acquisitionof costs.the sales teams. The Company expects some of these increased expenses associated with (i) and (ii) to subside over time as these changes take root and redundancies are eliminated.

Other income,income net increaseddecreased approximately $203$173 thousandthousand, or 19%, for fiscal 20242025 compared to fiscal 2023.2024. This increase was due to a higherShort-term interest rate earnedlevels on ainstitutional largermoney balancemarket offunds held-to-maturity securitieswere aslower comparedin fiscal 2025 relative to fiscal 2023.2024.

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 subscribers with outstanding value, thus encouraging renewals, and (iii) achieve sufficient sales volume to realize economies of scale. Accordingly, the Company intends to continue to increase the size of its sales force as well as invest in product development, operating infrastructure, marketing and promotion. The Company believes that these expenditures will help it to sustain the revenue growth it has experienced over the last several years. WeThe anticipateCompany anticipates that sales and marketing expenses will continue to increase in dollar amount and as a percentage of revenues into 20252026 and future periods as the Company continues to expand its business on a worldwide basis. Further, the Company expects that product development expenses will also continue to increase in dollar amount and may increase as a percentage of revenues into 20252026 and future periods because it expects to employ more development personnel on average compared to prior periods and build the infrastructure required to support the development of new and improved products and services. However, as some of these expenditures are discretionary in nature, the Company expects that the actual amounts incurred will be in line with its projections of future cash flows in order not to negatively impact its future liquidity and capital needs. 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 fluctuations in its future 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 operating results include, among others, (i) the Company’s ability to retain existing subscribers, attract new subscribers at a steady raterate, 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 Company’s ability to obtain products and services from its vendors, including information suppliers, on commercially reasonable terms, (vi) the Company’s ability to upgrade and develop its systems and infrastructure, and adapt to technological change, (vii) the Company’s ability to attract and retain personnel in a timely and effective manner, (viii) the Company’s ability to manage effectively its development of new business segments and markets, (ix) the Company’s ability to successfully manage the integration of operations and technology of acquisitions or other business combinations, (x) technical difficulties, system downtime, cybersecurity breaches, or Internet brownouts, (xi) uncertainties related to AI, (xii) the amount and timing of operating costs and capital expenditures relating to the Company’s business, operations and infrastructure, (xiixiii) governmental regulation and taxation policies, (xiiixiv) including undetermined state tax obligations, (xv) disruptions in service by common carriers due to strikes or otherwise, (xivxvi) risks of fire or other casualty, (xvxvii) litigation costs or other unanticipated expenses, (xvixviii) interest rate risks and inflationary pressures, and (xviixix) general economic conditions and economic conditions specific to the Internet and online commerce.

The table below presents selected financial information and statistics as of MarchJune 31,30, 2026 and December 31, 2025 (dollars in thousands):

As of MarchJune 31,30, 2026, the Company had approximately $5.7$9.3 million in cash and cash equivalents, aan decreaseincrease of approximately $533$3.1 thousandmillion from December 31, 2025. The Company had approximately $12.7$9.5 million in total held-to-maturity assets (current and non-current) comprised of U.S. Treasury securities as compared to approximately $12.6 million as of December 31, 2025.

The main component of current liabilities as of MarchJune 31,30, 2026 was unexpired subscription revenue of approximately $10.8$11.2 million, which should not require significant future cash outlay, as this is annual recurring revenue, other than the cost of preparation and delivery of the applicable commercial credit reports, which cost much less than the unexpired subscription revenue shown. Unexpired subscription revenue is recognized as income over the subscription term, which approximates 12 months. The unexpired subscription revenue balance does not include the total contract value of multi-year, noncancellable contracts that are billed annually.

Operating revenues increased approximately $115$107 thousand, or 2%, for the firstsecond quarter of fiscal 2026 compared to the same period of fiscal 2025. This overall revenue growth resulted from an increase in SaaS subscription product revenue, attributable to increased sales to new and existing subscribers, as well as related price increases for subscriptions.

Data and product costs increased approximately $238$539 thousand, or 10%,25%, for the firstsecond quarter of fiscal 2026 compared to the same period of fiscal 2025. The increase was driven by the (i) addition of senior technology leadership, (ii) shifts in reporting structure to better align departmental accountability and facilitate more efficient delivery of technology products, and (iii) higher hosted facility costs driven by increased production demands and the expiration of the leased office space on July 31, 2025.

Selling, general and administrative expenses reflect an increase in both the second quarter of fiscal 2026 and 2025 due to recording sales tax in prior periods. Overall, selling, general and administrative expenses increased approximately $29$288 thousand, or 1%,10%, for the firstsecond quarter of fiscal 2026 compared to the same period of fiscal 2025. The year-over-year increase is driven by an increase in professional fees, which the Company believes will be temporary.

Other income reflects a decrease in both the second quarter of fiscal 2026 and 2025 due to interest expense associated with recording sales tax and income tax in prior periods. Overall, other income decreased approximately $11$15 thousand, or 6%,10%, for the firstsecond quarter of fiscal 2026 compared to the same period of fiscal 2025. Short-term interest rate levels on institutional U.S. Government money market funds were lower in fiscal 2026 relative to fiscal 2025.

The Company expects to experience 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 subscribers, attract new subscribers at a steady rate and maintain customer satisfaction, (ii) the Company’s ability to maintain 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 Company’s ability to obtain products and services from its vendors, including information suppliers, on commercially reasonable terms, (vi) the Company’s ability to upgrade and develop its systems and infrastructure, and adapt to technological change, (vii) the Company’s ability to attract and retain personnel in a timely and effective manner, (viii) the Company’s ability to manage effectively its development of new business segments and markets, (ix) the Company’s ability to successfully manage the integration of operations and technology of acquisitions or other business combinations, (x) technical difficulties, system downtime, cybersecurity breaches, or Internet brownouts, (xi) uncertainties related to AI, (xii) the amount and timing of operating costs and capital expenditures relating to the Company’s business, operations and infrastructure, (xiii) governmental regulation and taxation policies, including undetermined state tax obligations,obligations and their settlement and resolution, (xiv) disruptions in service by common carriers due to strikes or otherwise, (xv) risks of fire or other casualty, (xvi) 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.

This Quarterly Report on Form 10-Q contains forward-looking statements. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained herein, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding our results of operations; financial position and performance; liquidity and our ability to fund business operations and initiatives; capital expenditure; business strategies, plans and goals, including those related to marketing, expansion of our business; industry trends; general economic conditions, including inflation, interest rates and other pricing pressures that could impact our operating margins; expectations regarding consumer behaviors and trends; human resource management; and our objectives for future operations. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” “likely,” “opportunity,” “may,” “could,” “outlook,” “can,” “trend,” “might,” “drives,” “hope,” “potential,” “project,” “predict,” and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are based largely on our current expectations and projections about future events and financial or other trends that the Company believes may affect our business. Any forward-looking statement speaks only as of the date it is made. These forward-looking statements are subject to inherent uncertainties, risks, changes in circumstances and other important factors that are difficult to predict. Moreover, the Company operates in a very competitive and rapidly changing environment in which new risks emerge from time to time. It is not possible for our management to predict all risks, nor can the Company assess the impact of all important factors on our business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed may not occur and our financial condition and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.statements The Company cautions you therefore against relying on these forward-looking statements. Some of the important factors that could cause actual results to differ from our expectations include regional, national, or global political, economic, business, competitive, market and regulatory conditions and the other important factors included in this report under sections captioned “Results of Operations,” and “Future Operations,” among others, as well as those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 in “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations.”. The Company qualifies all of its forward-looking statements by these cautionary statements. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.