Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 11, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | OptimizeRx Corp | |
Entity Central Index Key | 1,448,431 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 22,949,819 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 3,645,878 | $ 3,446,973 |
Accounts receivable | 1,918,419 | 2,100,381 |
Prepaid expenses | 76,376 | 28,093 |
Total Current Assets | 5,640,673 | 5,575,447 |
Property and equipment, net | 10,674 | 12,813 |
Other Assets | ||
Patent rights, net | 901,491 | 930,854 |
Web development costs, net | 424,075 | 504,643 |
Security deposit | 5,049 | 5,049 |
Total Other Assets | 1,330,615 | 1,440,546 |
TOTAL ASSETS | 6,981,962 | 7,028,806 |
Current Liabilities | ||
Accounts payable - trade | 172,183 | 200,372 |
Accounts payable - related party | 570,000 | 570,000 |
Accrued expenses | 9,851 | 25,459 |
Revenue share payable | 1,190,995 | 1,502,761 |
Deferred revenue | 336,213 | 120,130 |
Total Liabilities | 2,279,242 | 2,418,722 |
Stockholders' Equity | ||
Common stock, $.001 par value, 500,000,000 shares authorized, 22,949,819 and 22,867,319 shares issued and outstanding, respectively | $ 22,950 | $ 22,867 |
Preferred stock, $.001 par value, 10,000,000 shares authorized, no shares issued and outstanding | ||
Stock warrants | $ 2,153,295 | $ 2,153,295 |
Additional paid-in-capital | 27,806,253 | 27,595,609 |
Stock payable | 1,132,148 | $ 963,063 |
Deferred stock compensation | (18,750) | |
Accumulated deficit | (26,393,176) | $ (26,124,750) |
Total Stockholders' Equity | 4,702,720 | 4,610,084 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 6,981,962 | $ 7,028,806 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 22,949,819 | 22,867,319 |
Common stock, shares outstanding | 22,949,819 | 22,867,319 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
NET REVENUE | $ 1,705,457 | $ 1,426,808 | $ 3,193,010 | $ 2,716,236 |
REVENUE SHARE EXPENSE | 882,327 | 730,140 | 1,638,768 | 1,291,551 |
GROSS MARGIN | 823,130 | 696,668 | 1,554,242 | 1,424,685 |
OPERATING EXPENSES | 980,659 | 896,529 | 1,823,269 | 2,386,747 |
INCOME (LOSS) FROM OPERATIONS | (157,529) | (199,861) | (269,027) | (962,062) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 304 | 223 | 601 | 329 |
TOTAL OTHER INCOME (EXPENSE) | 304 | 223 | 601 | 329 |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | $ (157,225) | $ (199,638) | $ (268,426) | $ (961,733) |
PROVISION FOR INCOME TAXES | ||||
NET INCOME (LOSS) | $ (157,225) | $ (199,638) | $ (268,426) | $ (961,733) |
WEIGHTED AVERGE NUMBER OF SHARES OUTSTANDING | ||||
BASIC | 22,924,819 | 23,241,707 | 22,917,678 | 20,355,651 |
DILUTED | ||||
NET INCOME (LOSS) PER SHARE | ||||
BASIC | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.05) |
DILUTED |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss for the period | $ (268,426) | $ (961,733) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 159,337 | 115,828 |
Stock and options issued for services | 361,062 | 627,354 |
Changes in: | ||
Accounts receivable | 181,962 | 302,202 |
Prepaid expenses | (48,283) | (30,198) |
Accounts payable | (28,189) | 203,714 |
Revenue share payable | (311,766) | (414,563) |
Accrued expenses | (15,608) | (12,000) |
Deferred revenue | 216,083 | 19,651 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ 246,172 | (149,745) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (1,592) | |
Patent rights | $ (4,517) | (92,624) |
Website site development costs | (42,750) | (119,616) |
NET CASH USED IN INVESTING ACTIVITIES | $ (47,267) | (213,832) |
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 | $ 198,905 | 2,431,455 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 3,446,973 | 1,118,243 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 3,645,878 | $ 3,549,698 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | ||
Cash paid for income taxes |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 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 and six month periods ended June 30, 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 June 30, 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 and six month periods ended June 30, 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 | 6 Months Ended |
Jun. 30, 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 and 12,500 shares, valued at $13,375 were issued in June 2015 for the second quarter payment. In February 2015, we entered into a capital markets advisory agreement covering a one year period, which called 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 was terminated in July 2015, effective in August, and the remaining 45,000 shares will not be issued. The total expense to be recognized will be $56,250 and is being amortized over the period the agreement is in effect. 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 June 2015, we agreed to grant 197,605 fully vested shares of our common stock to two executive officers as bonuses. These shares have not been issued, but are recorded as stock payable and can be requested by the officers at any time. 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 | 6 Months Ended |
Jun. 30, 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 $110,039 and $170,611 in compensation expense in the periods ended June 30, 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, options granted in the current year and options repriced 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. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 4 – COMMITMENTS AND 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. The parties are currently in the discovery process. In March 2015, we initiated litigation against LDM Group, LLC and PDR Network, LLC in the U.S. 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 we are 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 U.S. 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 we are 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 U.S. District Court in the District of New Jersey, without prejudice. In July, 2015, the U.S. District Court for the Eastern District of Missouri dismissed the case, citing lack of Federal jurisdiction in the matter. We are in the process of refiling the consolidated case against PDR Network and LDM group in State court in Missouri. |
Restatement
Restatement | 6 Months Ended |
Jun. 30, 2015 | |
Restatement [Abstract] | |
RESTATEMENT | NOTE 5 – RESTATEMENT We restated our financial statements to correct the way we 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 three and six months ended June 30, 2014, as applicable, is as follows: Three months ended June 30, 2014 Previously Financial Statement Line Item Corrected Stated Income statement Revenue 1,426,808 1,454,214 Income statement Cost of Sales $ 730,140 $ 540,048 Income statement Operating expenses 896,529 967,070 Income statement Loss from operations $ (199,861 ) $ (52,904 ) Income statement Loss before income taxes $ (199,638 ) $ (52,681 ) Income statement Net loss $ (199,638 ) $ (52,681 ) Six months ended June 30, 2014 Previously Financial Statement Line Item Corrected Stated Income statement Revenue 2,716,236 2,771,560 Income statement Cost of Sales $ 1,291,551 $ 1,038,858 Income statement Operating expenses 2,386,747 2,439,028 Income statement Loss from operations $ (962,062 ) $ (706,326 ) Income statement Loss before income taxes $ (961,733 ) $ (705,996 ) Income statement Net loss $ (961,733 ) $ (705,996 ) Statement of cash flows Net loss $ (961,733 ) $ (705,996 ) Statement of cash flows Stock and options issued for services $ 627,344 $ 654,634 Statement of cash flows Increase in accounts payable $ 203,714 $ 173,889 Statement of cash flows Decrease in revenue share payable $ (311,776 ) $ (686,760 ) Statement of cash flows Increase in deferred revenue $ 19,651 $ 38,656 |
Restatement (Tables)
Restatement (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Restatement [Abstract] | |
Schedule of restatement | Three months ended June 30, 2014 Previously Financial Statement Line Item Corrected Stated Income statement Revenue 1,426,808 1,454,214 Income statement Cost of Sales $ 730,140 $ 540,048 Income statement Operating expenses 896,529 967,070 Income statement Loss from operations $ (199,861 ) $ (52,904 ) Income statement Loss before income taxes $ (199,638 ) $ (52,681 ) Income statement Net loss $ (199,638 ) $ (52,681 ) Six months ended June 30, 2014 Previously Financial Statement Line Item Corrected Stated Income statement Revenue 2,716,236 2,771,560 Income statement Cost of Sales $ 1,291,551 $ 1,038,858 Income statement Operating expenses 2,386,747 2,439,028 Income statement Loss from operations $ (962,062 ) $ (706,326 ) Income statement Loss before income taxes $ (961,733 ) $ (705,996 ) Income statement Net loss $ (961,733 ) $ (705,996 ) Statement of cash flows Net loss $ (961,733 ) $ (705,996 ) Statement of cash flows Stock and options issued for services $ 627,344 $ 654,634 Statement of cash flows Increase in accounts payable $ 203,714 $ 173,889 Statement of cash flows Decrease in revenue share payable $ (311,776 ) $ (686,760 ) Statement of cash flows Increase in deferred revenue $ 19,651 $ 38,656 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jul. 31, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Mar. 31, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |
Sharehoders equity [Texual] | |||||||||
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] | |||||||||
Sharehoders equity [Texual] | |||||||||
Called for issuance of shares | 90,000 | ||||||||
Additional shares issued | 45,000 | ||||||||
Called for issuance of shares, values | $ 112,500 | ||||||||
Subsequent Event [Member] | Capital markets advisory agreement [Member] | |||||||||
Sharehoders equity [Texual] | |||||||||
Number of shares not be issued | 45,000 | ||||||||
Called for issuance of shares, values | $ 56,250 | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Sharehoders equity [Texual] | |||||||||
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] | |||||||||
Sharehoders equity [Texual] | |||||||||
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] | |||||||||
Sharehoders equity [Texual] | |||||||||
Additional shares issued | 200,000 | ||||||||
Employee Bonus | $ 240,000 | ||||||||
Consultant [Member] | |||||||||
Sharehoders equity [Texual] | |||||||||
Additional shares issued | 150,000 | ||||||||
Vicis [Member] | |||||||||
Sharehoders equity [Texual] | |||||||||
Debt redemption, amount | $ 6,000,000 | $ 6,000,000 | |||||||
Officer [Member] | |||||||||
Sharehoders equity [Texual] | |||||||||
Additional shares issued | 410,348 | ||||||||
Warrants exercised, number of shares | 500,000 | ||||||||
Outside director [Member] | |||||||||
Sharehoders equity [Texual] | |||||||||
Called for issuance of shares | 6,250 | ||||||||
Additional shares issued | 12,500 | ||||||||
Additional shares issued | 12,500 | 12,500 | |||||||
Additional shares issued, value | $ 16,375 | $ 13,375 | |||||||
Two Officers [Member] | |||||||||
Sharehoders equity [Texual] | |||||||||
Employee bonus, Share | $ 197,605 |
Share Based Payments - Options
Share Based Payments - Options (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Share based payments options [Textual] | ||
Stock-based compensation expense | $ 110,039 | $ 170,611 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jun. 30, 2015 | Sep. 30, 2014 |
Commitment and contingencies [Textual] | ||
Claims pertaining to damages to nonregistration of shares | $ 450,000 | |
Damage related to LDM' s breach of the agreement. | $ 1,000,000 |
Restatement (Details)
Restatement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Class of Stock [Line Items] | ||||
Revenues | $ 1,705,457 | $ 1,426,808 | $ 3,193,010 | $ 2,716,236 |
COST OF SALES | 730,140 | 756,440 | 1,291,551 | |
Operating expenses | 980,659 | 896,529 | 1,823,269 | 2,386,747 |
Loss from operations | (157,529) | (199,861) | (269,027) | (962,062) |
Loss before income taxes | (157,225) | (199,638) | (268,426) | (961,733) |
Net loss | $ (157,225) | (199,638) | (268,426) | (961,733) |
Net loss | (961,733) | |||
Stock and options issued for services | 361,062 | 627,354 | ||
Increase in accounts payable | (28,189) | 203,714 | ||
Decrease in revenue share payable | 311,766 | 414,563 | ||
Increase in deferred revenue | $ 216,083 | 19,651 | ||
Previously Stated | ||||
Class of Stock [Line Items] | ||||
Revenues | 1,454,214 | 2,771,560 | ||
COST OF SALES | 540,048 | 1,038,858 | ||
Operating expenses | 967,070 | 2,439,028 | ||
Loss from operations | (52,904) | (706,326) | ||
Loss before income taxes | (52,681) | (705,996) | ||
Net loss | $ (52,681) | (705,996) | ||
Net loss | (705,996) | |||
Stock and options issued for services | 654,634 | |||
Increase in accounts payable | 173,889 | |||
Decrease in revenue share payable | (686,760) | |||
Increase in deferred revenue | $ 38,656 |