OptimizeRx (OPRX) 10-Q 14 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015
Document and Entity Information
Entity Registrant Name	OptimizeRx Corp
Entity Central Index Key	1448431
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
Document Type	10-Q
Document Period End Date	31-Mar-15
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	0

Balance_Sheets_Unaudited

Balance Sheets (Unaudited) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current Assets
Cash and cash equivalents	$3,510,823	$3,446,973
Accounts receivable	1,813,541	2,100,381
Prepaid expenses	38,299	28,093
Total Current Assets	5,362,663	5,575,447
Property and equipment, net	11,744	12,813
Other Assets
Patent rights, net	916,956	930,854
Web development costs, net	462,784	504,643
Security deposit	5,049	5,049
Total Other Assets	1,384,789	1,440,546
TOTAL ASSETS	6,759,196	7,028,806
Current Liabilities
Accounts payable - trade	163,131	200,372
Accounts payable - related party	570,000	570,000
Accrued expenses	30,851	25,459
Revenue share payable	1,163,302	1,502,761
Deferred revenue	253,438	120,130
Total Liabilities	2,180,722	2,418,722
Stockholders' Equity
Common stock, $.001 par value, 500,000,000 shares authorized, 22,924,819 and 22,867,319 shares issued and outstanding, respectively	22,925	22,867
Preferred stock, $.001 par value, 10,000,000 shares authorized, 0 and 65 shares issued and outstanding, respectively
Stock warrants	2,153,295	2,153,295
Additional paid-in-capital	27,720,330	27,595,609
Stock payable	1,021,000	963,063
Deferred stock compensation	-103,125
Accumulated deficit	-26,235,951	-26,124,750
Total Stockholders' Equity	4,578,474	4,610,084
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$6,759,196	$7,028,806

Balance_Sheets_Unaudited_Paren

Balance Sheets (Unaudited) (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock par value	$0.00	$0.00
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	22,924,819	22,867,319
Common stock, shares outstanding	22,924,819	22,867,319
Preferred Stock, par value	$0.00	$0.00
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	65
Preferred stock, shares outstanding	0	65

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
NET REVENUE	$1,487,553	$1,289,428
COST OF SALES	756,440	561,411
GROSS MARGIN	731,113	728,017
OPERATING EXPENSES	842,610	1,490,218
LOSS FROM OPERATIONS	-111,497	-762,201
OTHER INCOME (EXPENSE)
Interest income	296	106
TOTAL OTHER INCOME (EXPENSE)	296	106
LOSS BEFORE PROVISION FOR INCOME TAXES	-111,201	-762,095
PROVISION FOR INCOME TAXES
NET LOSS	($111,201)	($762,095)
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED	22,897,819	16,683,894
NET LOSS PER SHARE
BASIC AND DILUTED	$0	($0.05)

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period	($111,201)	($762,095)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	79,668	58,906
Stock and options issued for services	79,591	439,838
Changes in:
Accounts receivable	286,840	400,330
Prepaid expenses	-10,206	-34
Accounts payable	-37,241	66,439
Revenue share payable	-339,459	-321,947
Accrued expenses	5,392	134,042
Deferred revenue	133,308	211,248
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	86,692	226,727
CASH FLOWS FROM INVESTING ACTIVITIES:
Patent rights	-3,042	-33,297
Website site development costs	-19,800	-75,975
NET CASH USED IN INVESTING ACTIVITIES	-22,842	-109,272
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		10,000,000
Equity issuance costs		-1,204,968
Purchase of common and preferred stock and warrants		-6,000,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		2,795,032
NET INCREASE IN CASH AND CASH EQUIVALENTS	63,850	2,912,487
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	3,446,973	1,118,243
CASH AND CASH EQUIVALENTS - END OF PERIOD	3,510,823	4,030,730
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
Cash paid for income taxes

Nature_of_Business_and_Basis_o

Nature of Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2015
Nature of Business and Basis of Presentation [Abstract]
NATURE OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION
	OptimizeRx Corporation, is a technology solution company focused on the health care industry. Its objective is to bring better access to better care by leveraging its proprietary technology to provide on demand savings and support within physicians and patients web based platforms, including Electronic Health Records and Patient Portals. Initially defined as a marketing and advertising company through its consumer website, OptimizeRx.com, the Company has matured as a technology solutions provider through its direct to physician solution, SampleMD. SampleMD allows physicians to automatically display and distribute sample vouchers and/or co-pay coupons electronically within the ePrescription platform to pharmacies on behalf of their patients. The SampleMD solution is integrated into the ePrescribing or Electronic Medical Records applications, but can also sit on a prescriber’s desktop.
	OptimizeRx solutions provide health care institutions with an alternative option to the traditional hassles and issues associated with storing and managing physical drug samples and pre-printed coupons and it provides better access and affordability to patients to improve affordability, adherence and outcomes. In turn, OptimizeRx provides pharmaceutical manufacturers with both direct to consumer and direct to physician channels for more efficiently communicating and promoting their products and savings.
	The consolidated financial statements for the three month periods ended March 31, 2015 and 2014 have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments necessary to present fairly our financial position, results of operations, and cash flows as of March 31, 2015 and 2014, and for the periods then ended, have been made. Those adjustments consist of normal and recurring adjustments. The consolidated balance sheet as of December 31, 2014, has been derived from the audited consolidated balance sheet as of that date.
	Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as filed with the U.S. Securities and Exchange Commission.
	The results of operations for the three month period ended March 31, 2015, are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made in the prior period’s consolidated financial statements to conform to the current period’s presentation.

Stockholders_Equity

Stockholders Equity	3 Months Ended
	Mar. 31, 2015
Stockholders Equity [Abstract]
STOCKHOLDERS EQUITY	NOTE 2 – STOCKHOLDERS EQUITY
	In January 2015, we issued 12,500 shares of common stock to outside Directors in connection with our Director Compensation plan which calls for issuance of 6,250 shares per quarter for each Director. Those shares were recorded as stock payable at December 31, 2014. In addition, we recorded an additional 12,500 shares, valued at $16,375 as stock payable at March 31, 2015 for shares to be issued in April 2015.
	In February 2015 we entered into a capital markets advisory agreement covering a one year period which calls for 90,000 shares of common stock to be issued as compensation. These shares were valued at $112,500 and are being amortized to expense over the period of service. 45,000 of these shares were issued in March 2015, with the balance to be issued in August 2015. The agreement also allows an additional 60,000 shares to be earned based on future contingencies.
	In March 2014, we entered into a securities purchase agreement, pursuant to which we sold 8,333,333 shares of our common stock for $1.20 per share, or gross proceeds of $10,000,000.
	Placement agents in the offering received commissions equal to approximately 9.7% of gross proceeds, for an aggregate commission of approximately $970,000, including reimbursements for their reasonable out of pocket expenses. Placement agents also received warrants to purchase up to 804,139 shares of our common stock with an exercise price of $1.20 per share and a term of 5 years. The warrants were valued at $1,110,211, have been recorded as equity issuance costs, and were registered on a registration statement that went effective May 28, 2014. In addition to the warrants to placement agents, we also paid cash bonuses of $240,000 to three executive officers, agreed to issue 200,000 shares to three executive officers, and issued 150,000 shares to a consultant, in connection with the equity raise. The stock was valued based on the fair market value on the grant date, which was $630,000 in total. These amounts have been recorded as equity issuance costs, resulting in total equity issuance costs of $2.95 million. The 200,000 shares for the three executive officers have not been issued, but are recorded as stock payable and can be requested by the executive officers at any time.
	We used the net proceeds of the offering to exercise the securities redemption option agreement, as amended, with Vicis Capital Master Fund that provided us with an option to purchase all of the outstanding shares and derivative securities held by Vicis for total payment of $6,000,000. The shares and derivative securities included the Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, Common Stock, and warrants to purchase shares of common stock held by Vicis in the Company. The balance of the net proceeds were used for working capital purposes.
	In January 2014, an executive officer exercised 500,000 stock warrants using the cashless exercise feature included in the warrants. In exchange for the 500,000 warrants, 410,348 shares of common stock were issued.
	In February 2014, we agreed to grant 337,500 shares of our common stock, half of which vested immediately and half of which vested in August 2014, to two executive officers as bonuses based on their efforts to recapitalize the company to secure approximately $3 million in working capital while reducing fully diluted shares by approximately 7 million shares. These shares have not been issued, but are recorded as stock payable and can be requested by the officers at any time.

Share_Based_Payments_Options

Share Based Payments - Options	3 Months Ended
	Mar. 31, 2015
Share Based Payments - Options [Abstract]
SHARE BASED PAYMENTS - OPTIONS	NOTE 3 – SHARE BASED PAYMENTS – OPTIONS
	We use the fair value method to account for stock based compensation. We recorded $53,841 and $36,235 in compensation expense in the periods ended March 31, 2015 and 2014, respectively, related to options issued under our stock-based incentive compensation plan. This includes expense related to options issued in prior years for which the requisite service period for those options includes the current year. No options were issued in the current year. The fair value of these instruments was calculated using the Black-Scholes option pricing model. Information related to the assumptions used in this model is set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2015
Contingencies [Abstract]
CONTINGENCIES	NOTE 4 – CONTINGENCIES
	Litigation
	The company is currently involved in the following legal proceedings.
	In September 2014, we initiated litigation against Shadron Stastney, the Company’s previous CEO, in the U.S. District Court in the Eastern District of Michigan as a result of a dispute related to his separation agreement. Mr. Stastney alleged damages related to the non-registration of shares that he was granted as part of his separation agreement signed in September 2013. Under the terms of the contract we are not obligated to register the shares and we deny any obligation to do so. We have requested declarative relief from the court and also requested an injunction from the court preventing Mr. Stastney from continuing to pursue his claims. Mr. Stastney has filed a counterclaim requesting damages of $450,000 related to the nonregistration of his shares.
	In March 2015, we initiated litigation against LDM Group, LLC and PDR Network, LLC in the United States District Court in the Eastern District of Missouri related to the breach by LDM, and PDR as successor, of the settlement agreement signed February 28, 2014 related to previous litigation with LDM. LDM has failed to live up to its obligations under the settlement agreement including, but not limited to, not allowing us to distribute our eCoupon programs in the LDM network, not allowing us to distribute the LDM patient education programs, and not providing other information required under the settlement agreement. We are seeking enforcement of the settlement agreement and is seeking damages in an amount at least equal to the amounts paid to date to LDM under the settlement agreement, which approximates $1.0 million, as well as damages for lost income and business value as a result of LDM’s breach of the agreement.
	In March 2015, we also initiated litigation against PDR Network, LLC in the United States District Court in the District of New Jersey as a result of PDR’s breach of the Master Services Agreement between the parties requiring PDR to exclusively use our eCoupon solution. We assert that PDR’s acquisition of LDM and the use of the LDM network to distribute coupons by PDR violates the agreement between the parties and is seeking damages in an amount at least equal the amounts paid to date by us to LDM under the settlement agreement, which approximates $1.0 million, as well as damages for lost income and business value as a result of PDR’s actions.
	In May 2015, we filed an amended complaint in the Missouri case to consolidate the two cases and withdrew the case against PDR Networks in the United States District Court in the District of New Jersey, without predjudice.
	In early 2014 we learned that Mr. Milton Wilpon (“Mr. Wilpon”) of New Jersey claimed to have obtained a default judgment for approximately $929,000 in the New Jersey Superior Court, Essex County (the “Judgment”) against a predecessor of the Company and was seeking to amend the Judgment to add us as a judgment debtor.   The Judgment was entered in 2006 when the predecessor of the Company was a dormant shell company and the Judgment allegedly related to a settlement agreement that was breached in 2001 (the “Settlement Agreement”).  We appeared in the action and filed a motion to vacate the Judgment on several grounds, including that it appeared that the Summons and Complaint were never properly served and that plaintiff had never filed an arbitration as was required by the Settlement Agreement.  In September 2014, the Court granted our motion and vacated the Judgment in its entirety and dismissed the action.
	In December 2014, we were served with a copy of a Demand for Arbitration filed by Mr. Wilpon relating to his claims under the Settlement Agreement.  On February 24, 2015, we filed an appearance with the AAA objecting to the arbitration on several grounds, including (1) that claims arose in 2001 and are barred by the applicable statute of limitations; (2) plaintiff did not properly serve and file the demand for arbitration and (3) plaintiff has not followed the proper procedure for the appointment of an arbitrator as provided by the Settlement Agreement.   We petitioned the AAA to terminate the proceeding and in April 2015, the proceeding was terminated.

Restatement

Restatement	3 Months Ended
	Mar. 31, 2015
Restatement [Abstract]
RESTATEMENT	NOTE 5 – RESTATEMENT
	We restated our financial statements to correct the way it accounted for certain items related to stock based compensation, revenue share expense, and revenue recognition. The full impact of the restatement was reflected in the December 31, 2014 financial statements at the end of the year. The table below reflects the impact on the 2014 period reflected in this report.
	The restated Consolidated Statement of Operations and Consolidated Statement of Cash Flows for the periods ended March 31, 2014 is as follows:
	Three months ended March 31, 2014					Previously
	Financial Statement	Line Item	Corrected			Stated
	Income statement	Revenue		1,289,428			1,317,347
	Income statement	Cost of Sales	$	561,411		$	498,810
	Income statement	Operating expenses		1,490,218			1,471,958
	Income statement	Loss from operations	$	(762,201	)	$	(653,421	)
	Income statement	Loss before income taxes	$	(762,095	)	$	(653,315	)
	Income statement	Net loss	$	(762,095	)	$	(653,315	)
	Statement of cash flows	Net loss	$	(762,095	)	$	(653,315	)
	Statement of cash flows	Stock and options issued for services	$	439,838		$	421,577
	Statement of cash flows	Decrease in accounts receivable	$	400,330		$	455,585
	Statement of cash flows	Increase in accounts payable	$	66,439		$	41,439
	Statement of cash flows	Decrease in revenue share payable	$	(321,947	)	$	(395,935	)
	Statement of cash flows	Increase in deferred revenue	$	211,248		$	164,462

Subsequent_Events

Subsequent Events	3 Months Ended
	Mar. 31, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 6 – SUBSEQUENT EVENTS
	In April 2015, we issued 12,500 shares of common stock to our outside directors in connection with their compensation as Directors. The grant was valued at the fair market value at the date of grant of $16,375 and recorded as stock payable at March 31, 2015. We also issued 108,000 shares of common stock in connection with the capital markets advisory described in Note 2 to be delivered only upon reaching established milestones.

Restatement_Tables

Restatement (Tables)	3 Months Ended
	Mar. 31, 2015
Restatement [Abstract]
Schedule of restatement	Three months ended March 31, 2014					Previously
	Financial Statement	Line Item	Corrected			Stated
	Income statement	Revenue		1,289,428			1,317,347
	Income statement	Cost of Sales	$	561,411		$	498,810
	Income statement	Operating expenses		1,490,218			1,471,958
	Income statement	Loss from operations	$	(762,201	)	$	(653,421	)
	Income statement	Loss before income taxes	$	(762,095	)	$	(653,315	)
	Income statement	Net loss	$	(762,095	)	$	(653,315	)
	Statement of cash flows	Net loss	$	(762,095	)	$	(653,315	)
	Statement of cash flows	Stock and options issued for services	$	439,838		$	421,577
	Statement of cash flows	Decrease in accounts receivable	$	400,330		$	455,585
	Statement of cash flows	Increase in accounts payable	$	66,439		$	41,439
	Statement of cash flows	Decrease in revenue share payable	$	(321,947	)	$	(395,935	)
	Statement of cash flows	Increase in deferred revenue	$	211,248		$	164,462

Stockholders_Equity_Details

Stockholders Equity (Details) (USD $)	1 Months Ended	3 Months Ended	1 Months Ended
	Feb. 28, 2014	Mar. 31, 2015	Feb. 28, 2015	Mar. 31, 2014	Jan. 31, 2014	Jan. 31, 2015
Class of Stock [Line Items]
Common stock issued for equity issuance costs		$630,000
Employee bonus, Share	337,500
Additional working capital	3,000,000
Fully diluted shares	7,000,000
Equity issuance cost		2,950,000
Capital markets advisory agreement [Member]
Class of Stock [Line Items]
Called for issuance of shares			90,000
Additional shares issued		45,000
Called for issuance of shares, values			112,500
Additional shares issued		60,000
Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Sale of comman stock shares				8,333,333
Sale of common stock value				10,000,000
Sale of stock price per share				$1.20
Placement Agents [Member]
Class of Stock [Line Items]
Warrant exercise price period				5 years
Commissions percentage				9.70%
Commissions				970,000
Purchase of warrants				804,139
Warrants, Value				1,110,211
Exercise price				$1.20
Three Officers [Member]
Class of Stock [Line Items]
Additional shares issued				200,000
Employee Bonus				240,000
Consultant [Member]
Class of Stock [Line Items]
Additional shares issued				150,000
Vicis [Member]
Class of Stock [Line Items]
Debt redemption, amount		6,000,000
Officer [Member]
Class of Stock [Line Items]
Additional shares issued					410,348
Warrants exercised, number of shares					500,000
Outside director [Member]
Class of Stock [Line Items]
Called for issuance of shares						6,250
Additional shares issued						12,500
Additional shares issued		12,500
Additional shares issued, value		$16,375

Share_Based_Payments_Options_D

Share Based Payments - Options (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Share Based Payments - Options [Abstract]
Stock-based compensation expense	$53,841	$36,235

Contingencies_Details

Contingencies (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014
Contingencies [Abstract]
Claims pertaining to damages to nonregistration of shares			$450,000
Loss pertaining to Mr. Milton Wilpon for Litigation settlement	1,000,000
Damage related to LDM' s breach of the agreement.	1,000,000
Damage related to PDR's actions		$929,000

Restatement_Details

Restatement (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Class of Stock [Line Items]
Revenues	$1,487,553	$1,289,428
COST OF SALES	756,440	561,411
Operating expenses	842,610	1,490,218
Loss from operations	-111,497	-762,201
Loss before income taxes	-111,201	-762,095
Net loss	-111,201	-762,095
Net loss	-111,201	-762,095
Stock and options issued for services	79,591	439,838
Decrease in accounts receivable	-286,840	-400,330
Increase in accounts payable	-37,241	66,439
Decrease in revenue share payable	339,459	321,947
Increase in deferred revenue	133,308	211,248
Previously Stated
Class of Stock [Line Items]
Revenues		1,317,347
COST OF SALES		498,810
Operating expenses		1,471,958
Loss from operations		-653,421
Loss before income taxes		-653,315
Net loss		-653,315
Net loss		-653,315
Stock and options issued for services		421,577
Decrease in accounts receivable		455,585
Increase in accounts payable		41,439
Decrease in revenue share payable		-395,935
Increase in deferred revenue		$164,462

Subsequent_Events_Details

Subsequent Events (Details) (USD $)	3 Months Ended	1 Months Ended
	Mar. 31, 2015	Apr. 30, 2015
Subsequent Event [Line Items]
Common stock Issued shares as director fees	108,000
Outside director [Member]
Subsequent Event [Line Items]
Fair market value of grant	16,375
Subsequent Event [Member]
Subsequent Event [Line Items]
Common stock Issued shares as director fees		12,500