OptimizeRx (OPRX) 10-Q 2 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 31, 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	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		29,275,117

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 5,013,128	$ 7,034,647
Accounts receivable	2,704,752	3,060,396
Prepaid expenses	246,806	80,820
Total Current Assets	7,964,686	10,175,863
Property and equipment, net	180,459	173,649
Other Assets
Patent rights, net	721,476	772,394
Web development and other intangible costs, net	942,972	351,804
Security deposit	5,049	5,049
Total Other Assets	1,669,497	1,129,247
TOTAL ASSETS	9,814,642	11,478,759
Current Liabilities
Accounts payable - trade	720,758	369,214
Accrued expenses	434,559	288,268
Revenue share payable	1,877,991	2,622,517
Deferred revenue	729,092	386,581
Total Liabilities	3,762,400	3,666,580
Stockholders' Equity
Preferred stock, $.001 par value, 10,000,000 shares authorized, no shares issued and outstanding
Common stock, $.001 par value, 500,000,000 shares authorized, 29,275,117 and 29,718,867 shares issued and outstanding, respectively	29,275	29,719
Stock warrants	2,294,416	2,294,416
Additional paid-in-capital	33,854,614	33,747,137
Accumulated deficit	(30,126,063)	(28,259,093)
Total Stockholders' Equity	6,052,242	7,812,179
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 9,814,642	$ 11,478,759

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
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
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	29,275,117	29,718,867
Common stock, shares outstanding	29,275,117	29,718,867

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
NET REVENUE	$ 3,102,607	$ 1,786,137	$ 8,120,502	$ 5,458,944
REVENUE SHARE EXPENSE	1,703,676	723,396	4,690,943	2,539,021
GROSS MARGIN	1,398,931	1,062,741	3,429,559	2,919,923
OPERATING EXPENSES	2,028,589	1,311,959	5,320,220	4,133,505
LOSS FROM OPERATIONS	(629,658)	(249,218)	(1,890,661)	(1,213,582)
OTHER INCOME (EXPENSE)
Interest income	6,872	6,634	23,691	27,292
Interest expense				(163)
TOTAL OTHER INCOME (EXPENSE)	6,872	6,634	23,691	27,129
LOSS BEFORE PROVISION FOR INCOME TAXES	(622,786)	(242,584)	(1,866,970)	(1,186,453)
PROVISION FOR INCOME TAXES
NET LOSS	$ (622,786)	$ (242,584)	$ (1,866,970)	$ (1,186,453)
WEIGHTED AVERGE NUMBER OF SHARES OUTSTANDING
BASIC AND DILUTED	29,256,367	29,433,846	29,517,975	29,374,319
NET LOSS PER SHARE
BASIC AND DILUTED	$ (0.02)	$ (0.01)	$ (0.06)	$ (0.04)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period	$ (1,866,970)	$ (1,186,453)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	349,418	153,968
Stock based compensation	497,033	435,168
Changes in:
Accounts receivable	355,644	523,107
Prepaid expenses	(165,986)	(32,136)
Accounts payable	351,544	(383,794)
Revenue share payable	(744,526)	(134,905)
Accrued expenses	146,291	35,419
Deferred revenue	342,511	539,105
NET CASH USED IN OPERATING ACTIVITIES	(735,041)	(50,521)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(29,310)	(85,417)
Patent rights		(7,268)
Web development and other intangible costs	(867,168)	(132,306)
NET CASH USED IN INVESTING ACTIVITIES	(896,478)	(224,991)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		449,500
Repurchase of common stock and stock payable	(390,000)	(806,915)
NET CASH USED IN FINANCING ACTIVITIES	(390,000)	(357,415)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(2,021,519)	(632,927)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	7,034,647	8,207,565
CASH AND CASH EQUIVALENTS - END OF PERIOD	5,013,128	7,574,638
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	9 Months Ended
	Sep. 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 nine months ended September 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 September 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 nine months ended September 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	9 Months Ended
	Sep. 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, June 30, 2017 and September 30, 2017, valued at $15,375, $19,312, and $23,250, respectively. In connection with the same plan, we issued 12,500 shares in each of the quarters ended March 31, 2016, June 30, 2016, and September 30, 2016, valued at $13,125, $14,375, and $13,750, respectively. As described in greater detail in Note 4, related party transactions, in the quarter ended March 31, 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 same previous CEO in the quarter ended June 30, 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 the quarter ended June 30, 2016 related to shares that were previously reflected in common stock payable. In addition, we issued 69,519 shares of common stock during the nine months ended September 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 the quarter ended June 30, 2016. In the quarter ended September 30, 2016, we issued 384,118 shares of common stock to an unrelated party in a private transaction and received proceeds of $449,500. These proceeds were used to redeem 384,118 shares of common stock payable owed to our Senior Vice President of Sales for $449,500 in lieu of issuing the shares, which were previously reflected in stock payable.

Share Based Payments - Options

Share Based Payments - Options	9 Months Ended
	Sep. 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 $439,095 and $270,117 in compensation expense in the nine months ended September 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 the table below as well as in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. As of September 30, 2017, there is $1,447,842 of unearned compensation expense through 2022. 2017 2016 Expected dividend yield 0% 0% Risk free interest rate 1.47% - 1.49% 0.86% - 1.15 % Expected option term 3.5 - 5.0 years 4.5 years Turnover/forfeiture rate 0% 0% Expected volatility 67% - 78% 91% - 99 %

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 4 – RELATED PARTY TRANSACTIONS In the quarter ended March 31, 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 the quarter ended June 30, 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 called 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 common 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. In July 2016, we redeemed 384,118 shares of common stock owed to our Senior Vice President of Sales from stock grants awarded in 2014 and 2015, but not issued at the time of the grant. We redeemed these shares for a payment of $449,500.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 5 – COMMITMENTS AND CONTINGENCIES Litigation The company is currently involved in no legal proceeding. In the quarter ended September 30, 2017, we dismissed, without prejudice, litigation that we had initiated that was pending in Missouri state court against LDM Group, LLC and PDR Network, LLC.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 6 – SUBSEQUENT EVENTS In accordance with ASC 855-10, we have analyzed our operations subsequent to September 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.

Share Based Payments - Options

Share Based Payments - Options (Tables)	9 Months Ended
	Sep. 30, 2017
Share Based Payments - Options [Abstract]
Schedule of share based payments options	2017 2016 Expected dividend yield 0% 0% Risk free interest rate 1.47% - 1.49% 0.86% - 1.15 % Expected option term 3.5 - 5.0 years 4.5 years Turnover/forfeiture rate 0% 0% Expected volatility 67% - 78% 91% - 99 %

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	Dec. 31, 2015	Jul. 31, 2016	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Stockholders' Equity (Textual)
Additional shares issued							100,000			69,519
Shares of common stock		384,118
Value of common stock									$ 390,000	$ 806,915
Common stock, shares issued			29,275,117						29,275,117		29,718,867
Shares of common stock issued						384,118
Total redeemed share value		$ 449,500
Proceeds of common stock						$ 449,500
Common Stock [Member]
Stockholders' Equity (Textual)
Shares issued							50,000
Director [Member]
Stockholders' Equity (Textual)
Additional shares issued			6,250	6,250	6,250			6,250
Shares of common stock			18,750	18,750	18,750	12,500	12,500	12,500
Additional shares issued, value			$ 23,250	$ 19,312	$ 15,375	$ 13,750	$ 14,375	$ 13,125
CEO [Member]
Stockholders' Equity (Textual)
Shares of common stock				500,000
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
Total redeemed share value				$ 390,000
Senior Vice President [Member]
Stockholders' Equity (Textual)
Shares of common stock						384,118
Total redeemed share value						$ 449,500
Proceeds of common stock						$ 449,500

Share Based Payments - Option14

Share Based Payments - Options (Details)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Defined Benefit Plan Disclosure [Line Items]
Expected dividend yield	0.00%	0.00%
Expected option term		4 years 6 months
Turnover/forfeiture rate	0.00%	0.00%
Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Risk free interest rate	1.49%	1.15%
Expected option term	5 years
Expected volatility	78.00%	99.00%
Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Risk free interest rate	1.47%	0.86%
Expected option term	3 years 6 months
Expected volatility	67.00%	91.00%

Share Based Payments - Option15

Share Based Payments - Options (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Share Based Payments - Options (Textual)
Compensation expense	$ 497,033	$ 435,168
Unearned compensation expense	$ 1,447,842
Unearned compensation expense expiration date	Dec. 31, 2022
Stock Option [Member]
Share Based Payments - Options (Textual)
Compensation expense	$ 439,095	$ 270,117

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	Dec. 31, 2015	Jul. 31, 2016	Jun. 30, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2010
Related Party Transactions (Textual)
Shares of common stock issued				384,118
Total common granted stock							295,384	295,384
Total payments of insurance benefits					$ 12,425
Total redeemed shares		384,118
Total redeemed share value		$ 449,500
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
Senior Vice President [Member]
Related Party Transactions (Textual)
Total redeemed shares				384,118
Total redeemed share value				$ 449,500