OptimizeRx (OPRX) 10-Q 7 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
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, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,637,546

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 12,003,864	$ 5,122,573
Accounts receivable	2,954,782	2,257,276
Accounts receivable - related party	2,555,931	1,173,614
Prepaid expenses	215,108	255,428
Total Current Assets	17,729,685	8,808,891
Property and equipment, net	152,898	167,305
Other Assets
Patent rights, net	604,820	638,766
Web development and other intangible costs, net	152,381	143,730
Security deposit	5,049	5,049
Total Other Assets	762,250	787,545
TOTAL ASSETS	18,644,833	9,763,741
Current Liabilities
Accounts payable - trade	176,940	457,289
Accrued expenses	828,540	953,947
Revenue share payable	994,142	1,177,136
Revenue share payable - related party		447,670
Deferred revenue	845,153	507,160
Total Liabilities	2,844,775	3,543,202
Stockholders' Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at June 30, 2018 or December 31, 2017
Common stock, $0.001 par value, 166,666,667 shares authorized, 11,556,858 and 9,772,694 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	11,557	9,773
Stock warrants	1,286,424	1,286,424
Additional paid-in-capital	44,915,896	35,287,464
Accumulated deficit	(30,413,819)	(30,363,122)
Total Stockholders' Equity	15,800,058	6,220,539
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 18,644,833	$ 9,763,741

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
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	166,666,667	166,666,667
Common stock, shares issued	11,556,858	9,772,694
Common stock, shares outstanding	11,556,858	9,772,694

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
NET REVENUE
Revenue	$ 3,192,138	$ 2,252,222	$ 5,961,257	$ 3,652,540
Revenue - Related Party	1,907,336	613,601	3,250,453	1,365,356
TOTAL NET REVENUE	5,099,474	2,865,823	9,211,710	5,017,896
REVENUE SHARE EXPENSE	2,236,751	1,605,534	4,244,842	2,987,267
GROSS MARGIN	2,862,723	1,260,289	4,966,868	2,030,629
OPERATING EXPENSES	2,589,126	1,630,853	4,884,467	3,291,631
INCOME (LOSS) FROM OPERATIONS	273,597	(370,564)	82,401	(1,261,002)
OTHER INCOME (EXPENSE)
Interest income	6,912	9,063	8,929	16,819
Interest expense
TOTAL OTHER INCOME (EXPENSE)	6,912	9,063	8,929	16,819
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	280,509	(361,501)	91,330	(1,244,183)
PROVISION FOR INCOME TAXES
NET INCOME (LOSS)	$ 280,509	$ (361,501)	$ 91,330	$ (1,244,183)
WEIGHTED AVERGE NUMBER OF SHARES OUTSTANDING
BASIC	10,979,086	9,861,257	10,373,326	9,883,648
DILUTED	11,949,593	9,861,257	11,517,604	9,883,648
NET INCOME (LOSS) PER SHARE
BASIC	$ 0.03	$ (0.04)	$ 0.01	$ (0.13)
DILUTED	$ 0.02	$ (0.04)	$ 0.01	$ (0.13)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) for the period	$ 91,330	$ (1,244,183)
Adjustments to reconcile net income(loss) to net cash used in operating activities:
Depreciation and amortization	108,946	141,945
Stock and options issued for services	1,013,822	291,874
Changes in:
Accounts receivable	(2,079,823)	638,602
Prepaid expenses	40,320	(866,333)
Accounts payable	(280,349)	534,743
Revenue share payable	(183,664)	(751,094)
Accrued expenses	(125,407)	(91,981)
Deferred revenue	195,966	650,331
NET CASH USED IN OPERATING ACTIVITIES	(1,218,859)	(696,096)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(12,593)	(24,599)
Web development and other intangible costs	(56,651)	(81,350)
NET CASH USED IN INVESTING ACTIVITIES	(69,244)	(105,949)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock for cash	8,169,394
Repurchase of common stock and stock payable		(390,000)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	8,169,394	(390,000)
NET CHANGEIN CASH AND CASH EQUIVALENTS	6,881,291	(1,192,045)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	5,122,573	7,034,647
CASH AND CASH EQUIVALENTS - END OF PERIOD	12,003,864	5,842,602
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
Cash paid for income taxes
Non-cash issuance of shares to WPP	$ 447,000

Nature of Business and Basis of

Nature of Business and Basis of Presentation	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION We are a leading provider of digital health messaging via electronic health records (EHRs), providing a direct channel for pharmaceutical companies to communicate with healthcare providers. Our cloud-based solution supports patient adherence to medications by providing real-time access to financial assistance, prior authorization, education and critical clinical information. Our network is comprised of leading EHR platforms and provides more than half the ambulatory healthcare providers access to these benefits within their workflow at the point of care. The consolidated financial statements for the three and six months ended June 30, 2018 and 2017, 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, 2018 and 2017, 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, 2017, 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, 2017, as filed with the SEC. The results of operations for the three and six months ended June 30, 2018, 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.

New Financial Accounting Standa

New Financial Accounting Standards	6 Months Ended
	Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract]
NEW FINANCIAL ACCOUNTING STANDARDS	NOTE 2 – NEW FINANCIAL ACCOUNTING STANDARDS On January 1, 2018, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers We have applied the new revenue standard to all contracts as of the date of initial application. The overwhelming majority of our revenue continues to be recognized when transactions occur, such as the delivery of a message. We previously recognized revenue related to set-ups when a program launched, and all related activities had been accomplished. Under the new revenue standard, we are recognizing revenue related to these set ups over the term of the initial contract. Since set up fees are generally small relative to the size of the overall contract and because most contracts are for a year or less, the impact of this change is immaterial. The impact of recording this change as of January 1, 2018 resulted in an increase in deferred revenue of $142,027 at that date and a corresponding decrease in retained earnings as well. The impact of adopting the new revenue standard in 2018 resulted in lower revenues in the six months ended June 30, 2018. Had the new revenue standard not taken effect, our revenues for the period would have been higher by $144,262 and deferred revenues lower by $144,262. Almost all of these revenues are expected to be recognized by December 31, 2018, so the primary effect of the new revenue standard is to shift revenues between quarters by immaterial amounts. The impact of adopting the new revenue standard in 2018 also resulted in lower revenues in the three months ended June 30, 2018. Had the new revenue standard not taken effect, our revenues for the period would have been higher by $26,351.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 3 – STOCKHOLDERS’ EQUITY Effective May 14, 2018, in connection with our listing on the Nasdaq Capital Markets Exchange, we implemented a reverse split of our common stock by exchanging each three shares of our common stock for one share. The effect of this reverse split is presented in the accompanying financial statements as if it had been effective as off the beginning of the earliest period presented. We elected to round fractional shares up to the nearest whole number rather than redeem them for cash, and as a result we issued 908 additional shares. Our Director Compensation Plan calls for issuance of 2,084 shares per quarter to each independent director. In 2018, we issued 6,252 shares valued at $28,875 and 8,336 shares valued at $89,945 for the quarters ended March 31, and June 30, respectively. In 2017, we issued 6,252 shares in each of the quarters ended March 31, 2017 and June 30, 2017, valued at $15,375 and $19,312, respectively. In the quarter ended March 31, 2018, we issued 100,000 shares of common stock to a subsidiary of WPP, one of the world’s largest media companies, and a shareholder, in full payment of all amounts due under a comarketing agreement that covered certain WPP agencies, whereby we shared a portion of our revenue with those agencies related to programs awarded to us by those agencies. The shares were valued at $447,000, the market value of the stock on the date of issuance. The amount due was recorded as a liability in revenue share payable at December 31, 2017. During the quarter ended June 30, 2018, in a private transaction, we issued 1,666,669 shares of our common stock for gross proceeds of $9,000,000. In connection with this transaction, we incurred equity issuance costs of $835,526 related to payments to advisors and legal fees associated with the transaction, resulting in net proceeds to the Company of $8,164,474. We also issued 2,002 common shares and received proceeds of $4,920 in connection with the exercise of options by a former employee during the quarter ended June 30, 2018.

Share Based Payments - Options

Share Based Payments - Options and Stock Awards	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
SHARE BASED PAYMENTS - OPTIONS AND STOCK AWARDS	NOTE 4 – SHARE BASED PAYMENTS – OPTIONS AND STOCK AWARDS We use the fair value method to account for stock-based compensation. We recorded $712,998 and $257,187 in compensation expense in the six months ended June 30, 2018 and 2017, 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 assumptions used in this model were similar to the assumptions set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 related to grants in 2017. As also discussed in the 10-K, we increased the shares of common stock authorized under our stock option plan during the quarter to 1,833,333 million shares. We also granted 130,000 shares of performance based stock awards during the six months ended June 30, 2018. These shares were valued at their fair market value of $4.20 per share on the date of grant. The grants are currently expected to vest. A total of $182,004 of expense has been recorded related to these grants.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 5 – COMMITMENTS AND CONTINGENCIES Litigation The company is not involved in any legal proceedings.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2018
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 6 – RELATED PARTY TRANSACTIONS WPP, a large international media conglomerate, owns approximately 18% of our common shares. As described in more detail in Note 3, Stockholders Equity, we issued 100,000 shares of our common stock to a subsidiary of WPP related to the finalization and termination of a co-marketing agreement. Our customers are primarily pharmaceutical companies; however, sometimes their messaging programs are billed through media agencies. Revenues earned on messaging programs billed through media agencies owned by WPP are reflected as related party revenues on our income statement. Amounts due from those same agencies are reflected as related party accounts receivable on the balance sheet since their parent company owns a minority portion of our common shares.

Net Income (Loss) Per Share

Net Income (Loss) Per Share	6 Months Ended
	Jun. 30, 2018
Net Income Loss Per Share
NET INCOME (LOSS) PER SHARE	NOTE 7 – NET INCOME (LOSS) PER SHARE The following tables sets forth the computation of basic and diluted net income per share. Three months ended Six Months ended 2018 2017 2018 2017 Numerator Net income loss $ 280,509 $ (361,501 ) $ 91,330 $ (1,244,183 ) Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 10,979,086 9,861,257 10,373,326 9,883,648 Effect of dilutive stock options, warrants, and stock grants 970,507 - 1,144,278 - Diluted 11,949,593 9,861,257 11,517,604 9,883,648 Net Income (Loss) per share Basic $ 0.03 $ (0.04 ) $ 0.01 $ (0.13 ) Diluted $ 0.02 $ (0.04 ) $ 0.01 $ (0.13 )

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 8 – SUBSEQUENT EVENTS In July 2018, we issued 34,656 shares of common stock and received proceeds of $104,581 in connection with the exercise of options by former consultants and a former employee. In addition, in July 2018, we issued 46,032 shares of our common stock in connection with the cashless exercise of 70,842 warrants that were issued in March 2014 and would have otherwise expired in March 2019.

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	6 Months Ended
	Jun. 30, 2018
Net Income Loss Per Share
Schedule of basic and diluted net income per share	Three months ended Six Months ended 2018 2017 2018 2017 Numerator Net income loss $ 280,509 $ (361,501 ) $ 91,330 $ (1,244,183 ) Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 10,979,086 9,861,257 10,373,326 9,883,648 Effect of dilutive stock options, warrants, and stock grants 970,507 - 1,144,278 - Diluted 11,949,593 9,861,257 11,517,604 9,883,648 Net Income (Loss) per share Basic $ 0.03 $ (0.04 ) $ 0.01 $ (0.13 ) Diluted $ 0.02 $ (0.04 ) $ 0.01 $ (0.13 )

New Financial Accounting Stan15

New Financial Accounting Standards (Details) - USD ($)	Jan. 02, 2018	Jun. 30, 2018
New Financial Accounting Standards (Textual)
Increase in deferred revenue	$ 142,027
New revenue accounting standard, description		The new revenue standard not taken effect, our revenues for the period would have been higher by $144,262 and deferred revenues lower by $144,262. Almost all of these revenues are expected to be recognized by December 31, 2018, so the primary effect of the new revenue standard is to shift revenues between quarters by immaterial amounts. The impact of adopting the new revenue standard in 2018 also resulted in lower revenues in the three months ended June 30, 2018. Had the new revenue standard not taken effect, our revenues for the period would have been higher by $26,351.

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	May 14, 2018	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2018	Jun. 30, 2018
Stockholders' Equity (Textual)
Reserve stock split, description	We implemented a reverse split of our common stock by exchanging each three shares of our common stock for one share.
Shares issued	908
Shares of common stock issued			100,000
Shares of common stock issued, value			$ 447,000
Payments to advisors and legal fees							$ 835,526
Net proceeds issuance of common stock							$ 8,164,474
Issuance of common stock exercise							2,002
Issuance of common stock exercise value							$ 4,920
Private Placement [Member]
Stockholders' Equity (Textual)
Shares of common stock issued		1,666,669
Gross proceeds of common stock amount		$ 9,000,000
Director [Member]
Stockholders' Equity (Textual)
Compensation plan issuance of shares						2,084
Shares of common stock issued		8,336	6,252	6,252	6,252
Shares of common stock issued, value		$ 89,945	$ 28,875	$ 19,312	$ 15,375

Share Based Payments - Option17

Share Based Payments - Options and Stock Awards (Details) - Stock Option [Member] - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share Based Payments - Options and Stock Awards (Textual)
Compensation expense	$ 712,998	$ 257,187
Increased the shares of common stock authorized	1,833,333
Share based compensation arrangement by share-based payment award, granted	130,000
Fair market value price per share	$ 4.20
Share based compensation arrangement by shares-based payment award, granted value	$ 182,004

Related Party Transactions (Det

Related Party Transactions (Details) - shares	3 Months Ended
	Mar. 31, 2018	Jun. 30, 2018
Related Party Transactions (Textual)
Shares of common stock issued	100,000
Percentage of common shares owned by shareholder		18.00%

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator
Net income loss	$ 280,509	$ (361,501)	$ 91,330	$ (1,244,183)
Weighted average shares outstanding used in computing net income (loss) per share
Basic	10,979,086	9,861,257	10,373,326	9,883,648
Effect of dilutive stock options, warrants, and stock grants	970,507		1,144,278
Diluted	11,949,593	9,861,257	11,517,604	9,883,648
Net Income (Loss) per share
Basic	$ 0.03	$ (0.04)	$ 0.01	$ (0.13)
Diluted	$ 0.02	$ (0.04)	$ 0.01	$ (0.13)

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Events [Member]	1 Months Ended
	Jul. 31, 2018USD ($)shares
Subsequent Events (Textual)
Shares of common stock issued	34,656
Issuance of common stock exercise value | $	$ 104,581
Additional Issuance of common stock	46,032
Number of Warrants exercise	70,842
Warrants expired date	Mar. 31, 2019