Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 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 | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 12,013,682 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 13,523,002 | $ 5,122,573 |
Accounts receivable | 3,791,964 | 2,257,276 |
Accounts receivable - related party | 1,373,054 | 1,173,614 |
Prepaid expenses | 201,320 | 255,428 |
Total Current Assets | 18,889,340 | 8,808,891 |
Property and equipment, net | 149,936 | 167,305 |
Other Assets | ||
Patent rights, net | 587,848 | 638,766 |
Web development and other intangible costs, net | 128,381 | 143,730 |
Security deposit | 5,049 | 5,049 |
Total Other Assets | 721,278 | 787,545 |
TOTAL ASSETS | 19,760,554 | 9,763,741 |
Current Liabilities | ||
Accounts payable - trade | 165,458 | 457,289 |
Accrued expenses | 814,530 | 953,947 |
Revenue share payable | 763,084 | 1,177,136 |
Revenue share payable - related party | 447,670 | |
Deferred revenue | 813,316 | 507,160 |
Total Liabilities | 2,556,388 | 3,543,202 |
Stockholders' Equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at September 30, 2018 or December 31, 2017 | ||
Common stock, $0.001 par value, 166,666,667 shares authorized, 11,970,976 and 9,772,694 shares issued and outstanding at Sept 30, 2018 and December 31, 2017, respectively | 11,971 | 9,773 |
Stock warrants | 1,286,424 | |
Additional paid-in-capital | 47,361,086 | 35,287,464 |
Accumulated deficit | (30,168,891) | (30,363,122) |
Total Stockholders' Equity | 17,204,166 | 6,220,539 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 19,760,554 | $ 9,763,741 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 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 | 11,970,976 | 9,772,694 |
Common stock, shares outstanding | 11,970,976 | 9,772,694 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
NET REVENUE | ||||
Revenue | $ 3,990,486 | $ 2,076,736 | $ 9,951,743 | $ 5,729,275 |
Revenue - Related Party | 1,424,898 | 1,025,871 | 4,675,351 | 2,391,227 |
TOTAL NET REVENUE | 5,415,384 | 3,102,607 | 14,627,094 | 8,120,502 |
REVENUE SHARE EXPENSE | 2,268,968 | 1,703,676 | 6,513,810 | 4,690,943 |
GROSS MARGIN | 3,146,416 | 1,398,931 | 8,113,284 | 3,429,559 |
OPERATING EXPENSES | 2,923,238 | 2,028,589 | 7,807,705 | 5,320,220 |
INCOME (LOSS) FROM OPERATIONS | 223,178 | (629,658) | 305,579 | (1,890,661) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 21,750 | 6,872 | 30,679 | 23,691 |
Interest expense | ||||
TOTAL OTHER INCOME (EXPENSE) | 21,750 | 6,872 | 30,679 | 23,691 |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 244,928 | (622,786) | 336,258 | (1,866,970) |
PROVISION FOR INCOME TAXES | ||||
NET INCOME (LOSS) | $ 244,928 | $ (622,786) | $ 336,258 | $ (1,866,970) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||
BASIC | 11,755,500 | 9,752,122 | 10,840,584 | 9,839,325 |
DILUTED | 12,921,768 | 9,752,122 | 11,766,754 | 9,839,325 |
NET INCOME (LOSS) PER SHARE | ||||
BASIC | $ 0.02 | $ (0.06) | $ 0.03 | $ (0.19) |
DILUTED | $ 0.02 | $ (0.06) | $ 0.03 | $ (0.19) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) for the period | $ 336,258 | $ (1,866,970) |
Adjustments to reconcile net income(loss) to net cash used in operating activities: | ||
Depreciation and amortization | 163,418 | 212,918 |
Stock and options issued for services | 1,721,979 | 497,033 |
Changes in: | ||
Accounts receivable | (1,734,128) | 355,644 |
Prepaid expenses | 54,108 | (454,486) |
Accounts payable | (291,831) | 26,544 |
Revenue share payable | (414,722) | (744,526) |
Accrued expenses | (139,417) | 146,291 |
Deferred revenue | 164,129 | 342,511 |
NET CASH USED IN OPERATING ACTIVITIES | (140,206) | (1,485,041) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (23,131) | (29,310) |
Web development and other intangible costs | (56,651) | (117,168) |
NET CASH USED IN INVESTING ACTIVITIES | (79,782) | (146,478) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of common stock for cash | 8,620,417 | |
Repurchase of common stock and stock payable | (390,000) | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 8,620,417 | (390,000) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 8,400,429 | (2,021,519) |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 5,122,573 | 7,034,647 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 13,523,002 | 5,013,128 |
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 | 9 Months Ended |
Sep. 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 digital health messaging platform 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 of the ambulatory healthcare providers access to these benefits within their workflow at the point of care. The consolidated financial statements for the three and nine months ended September 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 September 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 items in the 2017 financial statements have been reclassified to conform with the 2018 presentation. 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 nine months ended September 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 | 9 Months Ended |
Sep. 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 nine months ended September 30, 2018. Had the new revenue standard not taken effect, our revenues for the period would have been higher by $151,514 and deferred revenues lower by $151,514. 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 September 30, 2018. Had the new revenue standard not taken effect, our revenues for the period would have been higher by $7,252. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 3 – STOCKHOLDERS’ EQUITY Effective May 14, 2018, in connection with our listing on the Nasdaq Capital Market, we implemented a reverse split of our common stock by exchanging each three shares of our common stock for one share. Our financial statements and all equity transactions have been retroactively adjusted to account for the reverse stock split. 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 as a result of this rounding. Our Director Compensation Plan calls for issuance of 2,084 shares of common stock per quarter to each independent director. In 2018, we issued 6,252 shares valued at $28,875, 8,336 shares valued at $89,945, and 11,489 shares valued at $206,802 for the quarters ended March 31, June 30 and September 30, respectively. In 2017, we issued 6,252 shares in each of the quarters ended March 31, June 30 and September 30 valued at $15,375, $19,312, and $23,250, 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 co-marketing agreement that covered certain WPP agencies, whereby we shared a portion of our revenue with those agencies related to new programs through 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 143,405 shares of common stock and received proceeds of $455,942 in connection with the exercise of options in 2018. During the quarter ended September 30, 2018, we issued 10,000 shares of stock, valued at $148,050, for investor relations services. During the quarter ended September 30, 2018, we issued 251,046 shares of common stock in connection with the cashless exercise of a warrant to purchase 348,194 shares. |
Share Based Payments - Options
Share Based Payments - Options | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED PAYMENTS - OPTIONS | NOTE 4 – SHARE BASED PAYMENTS – OPTIONS We use the fair value method to account for stock-based compensation. We recorded $1,248,307 and $439,095 in compensation expense in the nine months ended September 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 2018 to 1,833,333 million shares. There is $879,250 of remaining expense related to unvested options to be recognized in the future. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 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 | 9 Months Ended |
Sep. 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 the income statement and amounts due from those same agencies are reflected as related party accounts receivable on the balance sheet since WPP, through a subsidiary company, owns a minority portion of our common shares, even though the party receiving the ultimate services is not a related party. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
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 Sept 30 Nine Months Ended Sept 30 2018 2017 2018 2017 Numerator Net income (loss) $ 244,928 $ (622,786) $ 336,258 $ (1,866,970) Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 11,755,500 9,752,122 10,840,584 9,839,325 Effect of dilutive stock options, warrants, and stock grants 1,166,268 - 936,170 - Diluted 12,921,768 9,752,122 11,766,754 9,839,325 Net Income (Loss) per share Basic $ 0.02 $ (0.06 ) $ 0.03 $ (0.19 ) Diluted $ 0.02 $ (0.06 ) $ 0.03 $ (0.19 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8 – SUBSEQUENT EVENTS In October 2018, we issued 7,248 shares of common stock and received proceeds of $25,651 in connection with the exercise of options. In addition, in October 2018, we issued 5,000 shares of our common stock in connection with investor relations services. In October 2018, we completed the acquisition of CareSpeak Communications, a leader in interactive health messaging for improved medication adherence and care coordination to expand our reach to communicate directly to patients, resulting in greater medication adherence, persistence and affordability. This strategic acquisition allows us to continue diversifying our revenue streams and scaling our current solution. The purchase price was $6.0 million plus estimated working capital received of $91,411. A portion of the purchase price, $500,000, was payable in shares of our common stock and 30,638 shares were issued in connection with this acquisition. Additional cash payments of up to $3.0 million may be come due as part of an earnout if we achieve $2.0 million of revenues related to the “CareSpeak” product in 2019, and $3.0 million in 2020. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income per share | Three Months Ended Sept 30 Nine Months Ended Sept 30 2018 2017 2018 2017 Numerator Net income (loss) $ 244,928 $ (622,786) $ 336,258 $ (1,866,970) Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 11,755,500 9,752,122 10,840,584 9,839,325 Effect of dilutive stock options, warrants, and stock grants 1,166,268 - 936,170 - Diluted 12,921,768 9,752,122 11,766,754 9,839,325 Net Income (Loss) per share Basic $ 0.02 $ (0.06 ) $ 0.03 $ (0.19 ) Diluted $ 0.02 $ (0.06 ) $ 0.03 $ (0.19 ) |
New Financial Accounting Stan_2
New Financial Accounting Standards (Details) - USD ($) | Jan. 02, 2018 | Sep. 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 $151,514 and deferred revenues lower by $151,514. 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 September 30, 2018. Had the new revenue standard not taken effect, our revenues for the period would have been higher by $7,252. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | May 14, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 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 | 143,405 | |||||||
Issuance of common stock exercise value | $ 455,942 | |||||||
Common stock value issued for services | $ 148,050 | |||||||
Common stock shares issued for services | 10,000 | |||||||
Issued shares of common stock in connection with cashless exercise | 251,046 | |||||||
Warrant to purchase shares | 348,194 | |||||||
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 | 11,489 | 8,336 | 6,252 | 6,252 | 6,252 | 6,252 | ||
Shares of common stock issued, value | $ 206,802 | $ 89,945 | $ 28,875 | $ 23,250 | $ 19,312 | $ 15,375 |
Share Based Payments - Options
Share Based Payments - Options (Details) - Stock Option [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share Based Payments - Options (Textual) | ||
Compensation expense | $ 1,248,307 | $ 439,095 |
Increased the shares of common stock authorized | 1,833,333 | |
Remaining expense related to unvested options to be recognized in future | $ 879,250 |
Related Party Transactions (Det
Related Party Transactions (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Sep. 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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator | ||||
Net income (loss) | $ 244,928 | $ (622,786) | $ 336,258 | $ (1,866,970) |
Weighted average shares outstanding used in computing net income (loss) per share | ||||
Basic | 11,755,500 | 9,752,122 | 10,840,584 | 9,839,325 |
Effect of dilutive stock options, warrants, and stock grants | 1,166,268 | 936,170 | ||
Diluted | 12,921,768 | 9,752,122 | 11,766,754 | 9,839,325 |
Net Income (Loss) per share | ||||
Basic | $ 0.02 | $ (0.06) | $ 0.03 | $ (0.19) |
Diluted | $ 0.02 | $ (0.06) | $ 0.03 | $ (0.19) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events [Member] | 1 Months Ended |
Oct. 31, 2018USD ($)shares | |
Subsequent Events (Textual) | |
Shares of common stock issued | shares | 7,248 |
Issuance of common stock in connection with the exercise of options | $ 25,651 |
Additional issuance of common stock in connection with investor relations services | shares | 5,000 |
Purchase price | $ 6,000,000 |
Estimated working capital received | 91,411 |
Common stock value were issued in connection with acquisition | $ 500,000 |
Common stock shares were issued in connection with acquisition | shares | 30,638 |
Additional cash payments | $ 3,000,000 |
2019 [Member] | |
Subsequent Events (Textual) | |
Revenues related to product | 2,000,000 |
2020 [Member] | |
Subsequent Events (Textual) | |
Revenues related to product | $ 3,000,000 |