OptimizeRx (OPRX) 10-Q 1 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 28, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	OptimizeRx Corp
Entity Central Index Key	1,448,431
Trading Symbol	OPRX
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		29,256,367

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 5,842,602	$ 7,034,647
Accounts receivable	2,421,794	3,060,396
Prepaid expenses	272,153	80,820
Total Current Assets	8,536,549	10,175,863
Property and equipment, net	183,248	173,649
Other Assets
Patent rights, net	738,449	772,394
Web development and other intangible costs, net	1,015,154	351,804
Security deposit	5,049	5,049
Total Other Assets	1,758,652	1,129,247
TOTAL ASSETS	10,478,449	11,478,759
Current Liabilities
Accounts payable - trade	903,957	369,214
Accrued expenses	196,287	288,268
Revenue share payable	1,871,423	2,622,517
Deferred revenue	1,036,912	386,581
Total Liabilities	4,008,579	3,666,580
Stockholders' Equity
Common stock, $.001 par value, 500,000,000 shares authorized, 29,256,367 and 29,718,867 shares issued and outstanding, respectively	29,256	29,719
Preferred stock, $.001 par value, 10,000,000 shares authorized, no shares issued and outstanding
Stock warrants	2,294,416	2,294,416
Additional paid-in-capital	33,649,474	33,747,137
Accumulated deficit	(29,503,276)	(28,259,093)
Total Stockholders' Equity	6,469,870	7,812,179
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 10,478,449	$ 11,478,759

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
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	29,256,367	29,718,867
Common stock, shares outstanding	29,256,367	29,718,867
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, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
NET REVENUE	$ 2,865,823	$ 1,913,299	$ 5,017,896	$ 3,672,828
REVENUE SHARE EXPENSE	1,605,534	922,832	2,987,267	1,815,625
GROSS MARGIN	1,260,289	990,467	2,030,629	1,857,203
OPERATING EXPENSES	1,630,853	1,592,982	3,291,631	2,821,546
INCOME (LOSS) FROM OPERATIONS	(370,564)	(602,515)	(1,261,002)	(964,343)
OTHER INCOME (EXPENSE)
Interest income	9,063	10,582	16,819	20,658
Interest expense				(163)
TOTAL OTHER INCOME (EXPENSE)	9,063	10,582	16,819	20,495
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	(361,501)	(591,933)	(1,244,183)	(943,848)
PROVISION FOR INCOME TAXES
NET INCOME (LOSS)	$ (361,501)	$ (591,933)	$ (1,244,183)	$ (943,848)
WEIGHTED AVERGE NUMBER OF SHARES OUTSTANDING
BASIC	29,583,771	29,141,340	29,650,945	29,086,134
DILUTED
NET INCOME (LOSS) PER SHARE
BASIC	$ (0.01)	$ (0.02)	$ (0.04)	$ (0.03)
DILUTED

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period	$ (1,244,183)	$ (943,848)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	216,945	101,328
Stock and options issued for services	291,874	307,003
Changes in:
Accounts receivable	638,602	738,566
Prepaid expenses	(191,333)	(56,649)
Accounts payable	534,743	(380,465)
Revenue share payable	(751,094)	(544,575)
Accrued expenses	(91,981)	161,016
Deferred revenue	650,331	440,247
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	53,904	(177,377)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(24,599)	(19,809)
Patent rights		(7,268)
Web development and other intangible costs	(831,350)	(78,913)
NET CASH USED IN INVESTING ACTIVITIES	(855,949)	(105,990)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock and stock payable	(390,000)	(357,415)
NET CASH USED IN FINANCING ACTIVITIES	(390,000)	(357,415)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,192,045)	(640,782)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	7,034,647	8,207,565
CASH AND CASH EQUIVALENTS - END OF PERIOD	5,842,602	7,566,783
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, 2017
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 leading digital health aggregator of pharmaceutical sponsored services in the Electronic Health Records (EHR) space. Our objective is to leverage our proprietary technology to provide on demand savings and clinical messaging within physician and patient web based platforms, including EHR, e-prescribing platforms, pharmacies and Patient Portals. We have matured as a technology solutions provider through our direct to physician solutions, which allow 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 EHR applications, but can also be accessed on a mobile device as well as an application on a prescriber’s desktop. The consolidated financial statements for the three and six months ended June 30, 2017 and 2016, have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments necessary to present fairly our financial position, results of operations, and cash flows as of June 30, 2017 and 2016, 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, 2016, 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, 2016, as filed with the SEC. The results of operations for the three and six months ended June 30, 2017, 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 periods to conform to the presentation of our consolidated financial statements for the current periods.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 2 – STOCKHOLDERS’ EQUITY Our Director Compensation plan calls for the issuance of 6,250 shares of common stock per quarter to each Independent Director. In connection with this plan, we issued 18,750 shares in each of the quarters ended March 31, 2017 and June 30, 2017, valued at $15,375 and $19,312, respectively. In connection with the same plan, we issued 12,500 shares in each of the quarters ended March 31, 2016 and June 30, 2016, valued at $13,125 and $14.375, respectively. 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. We also redeemed 500,000 shares of common stock held by this previous CEO in June 2017 at a price of $0.78 per share for a total payment of $390,000. We 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 of common stock during the six months 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 in connection with the settlement of litigation in June 2016.

Share Based Payments - Options

Share Based Payments - Options	6 Months Ended
	Jun. 30, 2017
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 $257,187 and $155,703 in compensation expense in the six months ended June 30, 2017 and 2016, 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, 2016.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2017
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 entered into a separation agreement and an 18-month consulting agreement with our previous CEO. The consulting agreement set forth the terms of the previous CEO’s continued relationship with our company. The consulting agreement began on April 1, 2016. Under the terms of the consulting agreement, he received 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 replaced and superseded all previously disclosed payments related to his severance and board fees. In the quarter ended June 30, 2017 we redeemed 500,000 shares of stock owned by the previous CEO at a price of $0.78 per share for a total of $390,000 and amended the consulting agreement to terminate on July 31, 2017 instead of the original end date of September 30, 2017.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 5 – COMMITMENTS AND CONTINGENCIES Litigation The company is currently involved in the following legal proceeding. In March 2015, we initiated litigation in federal court against LDM Group, LLC and PDR Network, LLC. That action was dismissed and later re-initiated in Missouri state court. Our claims are related to the breach by LDM of the settlement agreement signed February 28, 2014 to resolve previous litigation with LDM. Following execution of that agreement, LDM failed to live up to its obligations under that 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 on a timely basis or at all as required under the settlement agreement. In addition, our claims include PDR’s breach of the Master Services Agreement requiring PDR’s exclusive use of 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 also claiming that LDM and PDR entered a civil conspiracy to violate their respective agreements with us. 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. The parties are currently in the discovery process.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 6 – SUBSEQUENT EVENTS In accordance with ASC 855-10, we have analyzed our operations subsequent to June 30, 2017 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.

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	Dec. 31, 2015	Feb. 29, 2016	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Stockholders' Equity (Textual)
Additional shares issued								69,519
Value of common stock							$ 390,000	$ 357,415
Common stock, shares issued			29,256,367				29,256,367		29,718,867
Common Stock [Member]
Stockholders' Equity (Textual)
Shares issued					50,000			50,000
Director [Member]
Stockholders' Equity (Textual)
Shares of common stock			18,750	18,750	12,500	12,500
Additional shares issued			6,250	6,250	6,250	6,250
Additional shares issued, value			$ 19,312	$ 15,375	$ 14,375	$ 13,125
CEO [Member]
Stockholders' Equity (Textual)
Shares of common stock							500,000
Additional shares issued								100,000
Related party transactions		$ 720,415
Value of common stock	$ 357,415
Shares of common stock issued	295,384	595,384
Per share price			$ 0.78				$ 0.78

Share Based Payments - Options

Share Based Payments - Options (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share Based Payments - Options (Textual)
Compensation expense	$ 257,187	$ 155,703

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	Dec. 31, 2015	Apr. 30, 2016	Feb. 29, 2016	Jun. 30, 2017	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)
Related party transactions			$ 720,415
Shares of common stock issued	295,384		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
Total redeemed shares				500,000
Total redeemed share value				$ 390,000
Per share price				$ 0.78

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	Mar. 31, 2015USD ($)
LDM Group [Member]
Commitment and contingencies (Textual)
Damage related to LDM' s breach of the agreement	$ 1
PDR Network [Member]
Commitment and contingencies (Textual)
Damage related to LDM' s breach of the agreement	$ 1