OptimizeRx (OPRX) 10-Q 8 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 05, 2016
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, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		29,659,632

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents	$ 7,566,783	$ 8,207,565
Accounts receivable	2,108,884	2,847,450
Prepaid expenses	127,272	70,623
Total Current Assets	9,802,939	11,125,638
Property and equipment, net	26,365	10,239
Other Assets
Patent rights, net	806,272	832,884
Web development costs, net	355,618	340,470
Security deposit	5,049	5,049
Total Other Assets	1,166,939	1,178,403
TOTAL ASSETS	10,996,243	12,314,280
Current Liabilities
Accounts payable - trade	194,726	212,191
Accounts payable - related party		570,000
Accrued expenses	167,999	6,983
Revenue share payable	1,811,033	2,355,608
Deferred revenue	667,249	227,002
Total Liabilities	2,841,007	3,371,784
Stockholders' Equity
Common stock, $.001 par value, 500,000,000 shares authorized, 29,262,944 and 29,030,925 shares issued and outstanding, respectively	29,263	29,031
Preferred stock, $.001 par value, 10,000,000 shares authorized, no shares issued and outstanding
Stock warrants	2,294,416	2,329,508
Additional paid-in-capital	32,911,750	32,185,499
Stock payable	583,545	1,132,148
Deferred stock compensation		(13,800)
Accumulated deficit	(27,663,738)	(26,719,890)
Total Stockholders' Equity	8,155,236	8,942,496
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 10,996,243	$ 12,314,280

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
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	29,262,944	29,030,925
Common stock, shares outstanding	29,262,944	29,030,925
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, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
NET REVENUE	$ 1,913,299	$ 1,705,457	$ 3,672,828	$ 3,193,010
REVENUE SHARE EXPENSE	922,832	882,327	1,815,625	1,638,768
GROSS MARGIN	990,467	823,130	1,857,203	1,554,242
OPERATING EXPENSES	1,592,982	980,659	2,821,546	1,823,269
INCOME (LOSS) FROM OPERATIONS	(602,515)	(157,529)	(964,343)	(269,027)
OTHER INCOME (EXPENSE)
Interest income	10,582	304	20,658	601
Interest expense			(163)
TOTAL OTHER INCOME (EXPENSE)	10,582	304	20,495	601
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	(591,933)	(157,225)	(943,848)	(268,426)
PROVISION FOR INCOME TAXES
NET INCOME (LOSS)	$ (591,933)	$ (157,225)	$ (943,848)	$ (268,426)
WEIGHTED AVERGE NUMBER OF SHARES OUTSTANDING
BASIC	29,141,340	22,924,819	29,086,134	22,917,678
DILUTED
NET INCOME (LOSS) PER SHARE
BASIC	$ (0.02)	$ (0.01)	$ (0.03)	$ (0.01)
DILUTED

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period	$ (943,848)	$ (268,426)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	101,328	159,337
Stock and options issued for services	307,003	361,062
Changes in:
Accounts receivable	738,566	181,962
Prepaid expenses	(56,649)	(48,283)
Accounts payable	(380,465)	(28,189)
Revenue share payable	(544,575)	(311,766)
Accrued expenses	161,016	(15,608)
Deferred revenue	440,247	216,083
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(177,377)	246,172
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(19,809)
Patent rights	(7,268)	(4,517)
Website site development costs	(78,913)	(42,750)
NET CASH USED IN INVESTING ACTIVITIES	(105,990)	(47,267)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock payable	(357,415)
NET CASH USED IN FINANCING ACTIVITIES	(357,415)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(640,782)	198,905
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	8,207,565	3,446,973
CASH AND CASH EQUIVALENTS - END OF PERIOD	7,566,783	3,645,878
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	163
Cash paid for income taxes

Nature of Business and Basis of

Nature of Business and Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Nature of Business and Basis of Presentation [Abstract]
NATURE OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION We are a technology solution company focused on the health care industry. Our objective is to bring better access to better care by leveraging our proprietary technology to provide on demand savings and clinical messaging within physicians’ and patients’ web based platforms, including Electronic Health Records, e-prescribing platforms, pharmacies and Patient Portals. Initially defined as a marketing and advertising company through our consumer website, OptimizeRx.com, we have matured as a technology solutions provider through our direct to physician solutions, which 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 OptimizeRx solution is integrated into the ePrescribing or Electronic Medical Records applications, but can also be accessed on a desktop computer, as well as most mobile devices. Our solutions provide health care institutions with an alternative option to the traditional inefficiencies and issues associated with storing and managing physical drug samples and pre-printed coupons and provide better access and affordability to patients to improve affordability, adherence, education and outcomes. In turn, we provide pharmaceutical manufacturers with both direct-to-consumer and direct-to-physician channels for more efficiently communicating and promoting their products and savings with a method of transparent return on investment. The consolidated financial statements for the three and six month periods ended June 30, 2016 and 2015, 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, 2016 and 2015, 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, 2015, 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, 2015, as filed with the Securities and Exchange Commission. The results of operations for the three and six month periods ended June 30, 2016, are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made in our consolidated financial statements for the prior period to conform to the presentation of our consolidated financial statements for the current period.

Stockholders Equity

Stockholders Equity	6 Months Ended
	Jun. 30, 2016
Stockholders Equity [Abstract]
STOCKHOLDERS EQUITY	NOTE 2 – STOCKHOLDERS EQUITY As described in greater detail in Note 4, related party transactions, in February 2016, we made a one-time payment of $720,415 to our previous CEO in lieu of issuing shares owed to him from prior years. A portion of this payment, $357,415, was for 295,384 shares of common stock reflected in stock payable at December 31, 2015. In March 2016, we issued 12,500 shares of common stock to Independent Directors in connection with our Director Compensation plan which calls for the issuance of 6,250 shares per quarter to each Independent Director. These shares were valued at $13,125. In July 2016, we issued an additional 12,500 shares of common stock, valued at $14,375 that were reflected in stock payable at June 30, 2016. In January 2015, we issued 12,500 shares of common stock to our Independent Directors in connection with the same compensation plan. 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 that were issued in April 2015 and, finally, 12,500 shares, valued at $13,375, that were issued in June 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. Of these shares, 45,000 were issued in March 2015, and the balance were issued in August 2015. In June 2015, we agreed to grant 197,605 fully vested shares of our common stock to two executive officers as bonuses. These shares were not issued, but were recorded as stock payable and could be requested by the officers at any time. A total of 79,042 of these shares were redeemed in cash in February 2016, in lieu of issuing the shares and the remaining 118,563 shares remain in stock payable at June 30, 2016. We also issued 50,000 shares of common stock in June 2016 related to shares that were previously reflected in common stock payable. In addition, we issued 69,519 shares during the six-month period ended June 30, 2016 in connection with the cashless exercise of previous option grants that were approaching expiration. We issued 100,000 shares of common stock, valued at $110,000, to Shadron Stastney in connection with the settlement of litigation described in greater detail in Note 5.

Share Based Payments - Options

Share Based Payments - Options	6 Months Ended
	Jun. 30, 2016
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 $155,703 and $110,039 in compensation expense in the periods ended June 30, 2016 and 2015, 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, 2015.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2016
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 4 – RELATED PARTY TRANSACTIONS In February 2016, after hiring a new CEO, we paid our previous CEO $720,415 in lieu of issuing him 595,384 shares of common stock based on the 50-day average price of $1.21 per share. A total of 295,384 of these shares were due as a result of previously granted stock awards in 2014 and 2015, for which shares had not yet been issued. These shares were recorded as stock payable on the balance sheet at December 31, 2015. The remaining 300,000 shares were due in connection with the purchase of a patent from the previous CEO in 2010. These shares were recorded as accounts payable – related party on the balance sheet at December 31, 2015. The difference between the value the shares were initially recorded at in 2010 and the amount they were redeemed at in 2016 was recorded as additional paid in capital. Also, in April 2016, we and the previous CEO entered into a separation agreement and an 18-month consulting agreement, both of which we recently disclosed in a Form 8-K that we filed with the U.S. Securities and Exchange Commission. The consulting agreement set forth the terms of the previous CEO’s continued relationship with our company. He remained our employee through March 31, 2016 and the consulting agreement began April 1, 2016. Under the terms of the consulting agreement, he will receive a monthly payment of $15,000, with the potential for up to $54,000 in additional bonus payments during the term of the agreement. This agreement also calls for total payments of $12,425 related to insurance benefits. The separation agreement and consulting agreement replace and supersede all previously disclosed payments related to his severance and board fees.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 5 – COMMITMENTS AND CONTINGENCIES Litigation The company is currently involved in the following legal proceedings. Commencing in September, 2014, we have been a party to a lawsuit involving our prior CEO, Shadron Stastney, in the U.S. District Court in the Eastern District of Michigan as a result of a dispute related to his separation agreement. On May 27, 2016, we settled the action. For a complete release of claims and dismissal of the action, we agreed to pay Mr. Stastney $50,000 and to issue him 100,000 shares of our common stock. We further agreed to register 133,333 of his existing shares with the Securities and Exchange Commission on Form S-1 by June 30, 2016. We have tendered Mr. Stastney the cash and shares and registered his shares in fulfillment of our settlement obligations. In March, 2015, we initiated litigation against LDM Group, LLC and PDR Network, LLC 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. In addition, our claims include PDR’s breach of the Master Services Agreement 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. We are seeking enforcement of the agreements and we are seeking damages in an amount at least equal to the amounts paid to date to LDM under the settlement agreement, which is in excess of $1.0 million, as well as damages for lost income and business value as a result of LDM and PDR’s breach of the agreements. The case is currently before the court in the State of Missouri. The defendants have filed a motion to dismiss two of the four counts in the consolidated complaint. In January, 2016, the Court dismissed one of our four claims, but allowed the other three to continue forward. The parties are currently in the discovery process.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 6 – SUBSEQUENT EVENTS In accordance with ASC 855-10, we have analyzed our operations subsequent to June 30, 2016 through the date these financial statements were issued and have determined that we do not have any material subsequent events to disclose in these financial statements other than the events described below. In July 2016, we issued 384,188 shares of our common stock to an unrelated investor and used the proceeds to retire a stock payable due to an executive officer.

Stockholders Equity (Details)

Stockholders Equity (Details)	1 Months Ended					6 Months Ended
	Mar. 31, 2016USD ($)shares	Feb. 29, 2016USD ($)shares	Jun. 30, 2015USD ($)officersshares	Mar. 31, 2015USD ($)shares	Feb. 28, 2015USD ($)shares	Jun. 30, 2016USD ($)shares	Jun. 30, 2015USD ($)shares	Dec. 31, 2015USD ($)shares	Jan. 31, 2015shares
Related Party Transaction [Line Items]
Common stock payable Amount | $						$ 357,415
Common stock, shares issued						29,262,944		29,030,925
Common stock valued | $						$ 29,263		$ 29,031
Called for issuance of shares		79,042
Additional shares issued						69,519
Share based compensation expense | $						$ 155,703	$ 110,039
Shares issued						118,563
Common Stock [Member]
Related Party Transaction [Line Items]
Shares issued						50,000
Number of executive officers | officers			2
Common stock vested, Shares			197,605
CEO, Shadron Stastney [Member]
Related Party Transaction [Line Items]
Related party transactions | $		$ 720,415
Common stock payable Amount | $		$ 357,415
Common stock, shares issued		295,384				100,000
Common stock valued | $						$ 110,000
Director [Member]
Related Party Transaction [Line Items]
Common stock, shares issued	12,500		12,500				12,500		12,500
Common stock valued | $	$ 13,125		$ 13,375				$ 13,375
Called for issuance of shares	6,250
Additional shares issued				12,500		12,500
Additional shares issued, value | $				$ 16,375		$ 14,375
Capital markets advisory agreement [Member]
Related Party Transaction [Line Items]
Called for issuance of shares					90,000
Share based compensation expense | $					$ 112,500
Shares issued				45,000

Share Based Payments - Options

Share Based Payments - Options (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Share based payments options [Textual]
Stock-based compensation expense	$ 155,703	$ 110,039

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	1 Months Ended		12 Months Ended
	Apr. 30, 2016	Feb. 29, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2010
Related Party Transactions (Textual)
Total common granted stock			295,384	295,384
Total payments of insurance benefits	$ 12,425
CEO [Member]
Related Party Transactions (Textual)
Lieu of common stock issued		$ 720,415
Shares of common stock issued		595,384
Average price per share		$ 1.21
Shares issued for in connection with purchase of a patent					300,000
Monthly payment of consulting agreement	15,000
Additional bonus payments	$ 54,000

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Mar. 31, 2015	Sep. 30, 2014
CEO, Shadron Stastney [Member]
Contingencies (Textual)
Claims pertaining to damages to nonregistration of shares			$ 50,000
Shares of common stock issued	100,000
Existing shares	133,333
LDM Group [Member]
Contingencies (Textual)
Damage related to LDM' s breach of the agreement		$ 1,000,000
PDR Network [Member]
Contingencies (Textual)
Damage related to LDM' s breach of the agreement		$ 1,000,000

Subsequent Events (Details)

Subsequent Events (Details)	1 Months Ended
	Jul. 31, 2016shares
Subsequent Event [Member] | Executive Officer [Member]
Subsequent Events (Textual)
Shares of common stock proceeds to retire a stock payable	384,188