OptimizeRx (OPRX) 10-Q 8 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 03, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	OptimizeRx Corp
Entity Central Index Key	0001448431
Trading Symbol	OPRX
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019
Entity Filer Category	Accelerated Filer
Entity Ex Transition Period	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		12,278,833

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current Assets
Cash and cash equivalents	$ 10,133,940	$ 8,914,034
Accounts receivable	4,902,888	6,457,841
Prepaid expenses	446,022	360,146
Total Current Assets	15,482,850	15,732,021
Property and equipment, net	146,543	149,330
Other Assets
Goodwill	3,678,513	3,678,513
Patent rights, net	2,712,855	2,766,944
Other intangible assets, net	2,397,791	2,492,123
Right of use assets, net	644,335
Other assets and deposits	193,972	235,647
Total Other Assets	9,627,466	9,173,227
TOTAL ASSETS	25,256,859	25,054,578
Current Liabilities
Accounts payable - trade	584,820	411,010
Accrued expenses	291,456	1,300,882
Revenue share payable	1,132,102	1,908,616
Current portion of lease obligations	110,065
Current portion of contingent purchase price payable	1,092,000
Deferred revenue	645,824	610,625
Total Current Liabilities	3,856,267	4,231,133
Non-current Liabilities
Lease obligations, net of current portion	537,716
Contingent purchase price payable, net of current portion	1,421,000	2,365,000
Total Non-current liabilities	1,958,716	2,365,000
Total Liabilities	5,814,983	6,596,133
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at March 31, 2019 or December 31, 2018
Common stock, $0.001 par value, 500,000,000 shares authorized, 12,278,833 and 12,038,618 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	12,279	12,039
Additional paid-in-capital	49,705,102	48,725,211
Accumulated deficit	(30,275,505)	(30,278,805)
Total Stockholders' Equity	19,441,876	18,458,445
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 25,256,859	$ 25,054,578

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
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	12,278,833	12,038,618
Common stock, shares outstanding	12,278,833	12,038,618

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
TOTAL REVENUE	$ 5,209,434	$ 4,112,237
COST OF REVENUES	1,583,480	2,008,092
GROSS MARGIN	3,625,954	2,104,145
OPERATING EXPENSES	3,493,789	2,295,341
INCOME (LOSS) FROM OPERATIONS	132,165	(191,196)
OTHER INCOME (EXPENSE)
Interest Income	22,364	2,017
Change in Fair Value of Contingent Consideration	(148,000)
Interest (Expense)
TOTAL OTHER INCOME (EXPENSE)	(125,636)	2,017
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	6,529	(189,179)
PROVISION FOR INCOME TAXES
NET INCOME (LOSS)	$ 6,529	$ (189,179)
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC	12,077,829	9,786,027
DILUTED	13,077,917	9,786,027
NET LOSS PER SHARE
BASIC	$ 0	$ (0.02)
DILUTED	$ 0	$ (0.02)

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes In Stockholder's Equity (Unaudited) - USD ($)	Common Stock	Additional Paid in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2017	$ 9,773	$ 36,573,888	$ (30,363,122)	$ 6,078,512
Balance, shares at Dec. 31, 2017	9,772,694
Cumulative effect of change in accounting principle related to lease accounting			(142,027)	(142,027)
Shares issued as compensation	$ 6	$ 28,869		$ 28,875
Shares issued as compensation, shares	6,249
Stock compensation expense		468,247		468,247
Stock compensation expense, shares
Shares issued for revenue share	$ 100	$ 446,900		$ 447,000
Shares issued for revenue share, shares	100,000
Net income (loss)			(189,179)	(189,179)
Balance at Mar. 31, 2018	$ 9,879	37,517,904	(30,691,428)	6,691,428
Balance, shares at Mar. 31, 2018	9,878,943
Balance at Dec. 31, 2018	$ 12,039	48,725,211	(30,278,805)	18,458,445
Balance, shares at Dec. 31, 2018	12,038,618
Cumulative effect of change in accounting principle related to lease accounting			(3,229)	(3,229)
Shares issued for restricted stock awards	$ 130	(130)
Shares issued for restricted stock awards, shares	130,001
Shares issued for stock options exercised	$ 102	343,683		343,785
Shares issued for stock options exercised, shares	101,878
Shares issued as compensation	$ 8	$ 106,026		$ 106,034
Shares issued as compensation, shares	8,336
Stock compensation expense		530,312		530,312
Stock compensation expense, shares
Net income (loss)			$ 6,529	$ 6,529
Balance at Mar. 31, 2019	$ 12,279	$ 49,705,102	$ (30,275,505)	$ 19,441,876
Balance, shares at Mar. 31, 2019	12,278,833

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)	$ 6,529	$ (189,179)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	190,301	54,473
Stock-based compensation	530,312	468,247
Stock issued for services	106,034	28,875
Change in fair value of contingent consideration	148,000
Changes in:
Accounts receivable	1,554,953	(414,508)
Prepaid expenses and other assets	(44,201)	64,015
Accounts payable	173,810	(323,419)
Revenue share payable	(776,514)	(279,328)
Accrued expenses and other liabilities	(1,034,454)	(404,291)
Deferred revenue	35,199	207,727
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	889,969	(787,388)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of equipment	(13,848)	(3,803)
Development costs		(32,763)
NET CASH USED IN INVESTING ACTIVITIES	(13,848)	(36,566)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Proceeds from exercise of stock options	343,785
NET CASH PROVIDED BY FINANCING ACTIVITIES	343,785
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,219,906	(823,954)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	8,914,034	5,122,573
CASH AND CASH EQUIVALENTS - END OF PERIOD	10,133,940	4,298,619
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
Cash paid for income taxes
Non-cash effect of issuance of shares related to net settled options
Non-cash effect of cumulative adjustments to accumulated deficit	3,229	142,027
Lease liabilities arising from right of use assets	672,809
Non-cash issuance of shares to WPP, plc		$ 447,000

Nature of Business and Basis of

Nature of Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION The accompanying condensed consolidated financial statements include OptimizeRx corporation and its wholly owned subsidiaries (collectively, the “Company”, “we”, “our”, or “us”). 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 a million healthcare providers access to these services within their workflow at the point of care. The consolidated condensed financial statements for the three months ended March 31, 2019 and 2018 have been prepared by us without audit pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. In the opinion of management, all adjustments necessary to present fairly our financial position at March 31, 2019, and our results of operations, changes in stockholders’ equity, and cash flows for the three months ended March 31, 2019 and 2018, have been made. Those adjustments consist of normal and recurring adjustments. The condensed consolidated condensed balance sheet as of December 31, 2018, has been derived from the audited consolidated condensed balance sheet as of that date. Certain information and note disclosures, including a detailed discussion about the Company’s significant accounting policies, normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated condensed 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, 2018, as filed with the U.S. Securities and Exchange Commission on March 12, 2019. The results of operations for the three-months ended March 31, 2019, are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made in the prior period’s consolidated financial statements to conform to the current period’s presentation.

New Accounting Standards

New Accounting Standards	3 Months Ended
	Mar. 31, 2019
Accounting Changes and Error Corrections [Abstract]
NEW ACCOUNTING STANDARDS	NOTE 2 – NEW ACCOUNTING STANDARDS In February 2016, the FASB issued new accounting guidance on leases. The accounting standard, effective January 1, 2019, requires virtually all leases to be recognized on the Balance Sheet. Effective January 1, 2019, we adopted the standard using the modified retrospective method, under which we elected the package of practical expedients and transition provisions allowing us to bring our existing operating leases onto the Consolidated Balance Sheet without adjusting comparative periods, but recognizing a cumulative-effect adjustment to the opening balance of accumulated deficit on January 1, 2019. Under the guidance, we have also elected not to separate lease and non-lease components in recognition of the lease-related assets and liabilities, as well as the related lease expense. We have operating leases for office space in three multitenant facilities, which are recorded as assets and liabilities for those leases with terms greater than 12 months. Certain leases contain renewal options and for the headquarters lease, we have assumed renewal. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Upon adoption of the standard on January 1, 2019, we recorded approximately $462,000 of right of use assets and $465,000 of lease-related liabilities, with the difference charged to accumulated deficit at that date. For the three months ended March 31, 2019, the Company’s lease cost consists of the following components, each of which is included in operating expenses within the Company’s consolidated statements of operations: Three Months Ended Operating lease cost $ 30,684 Short-term lease cost (1) 9,841 Total lease cost $ 40,525 (1) Short-term lease cost includes any lease with a term of less than 12 months. The table below presents the future minimum lease payments to be made under operating leases as of March 31, 2019: As of March 31, 2019 2019(a) $ 102,012 2020 138,533 2021 140,881 2022 102,881 2023 99,722 Thereafter 150,684 Total 734,713 Less: discount 86,932 Total lease liabilities $ 647,781 (a) For the nine-month period beginning April 1, 2019. The weighted average remaining lease term for operating leases is 5.8 years and the weighted average discount rate used in calculating the operating lease asset and liability is 4.5%. Cash paid for amounts included in the measurement of lease liabilities is $30,684. The Company initially signed the lease for its current office space located in Rochester Michigan on December 1, 2011. That lease expired on November 30, 2016 and the Company signed a new lease for the same space. The current lease is a three-year lease beginning December 1, 2016, with options for up to an additional 6 years. The rent is payable monthly at rates of $6,232, $6,308, and $6,384 per month for years 1, 2, and 3 of the lease, respectively. The monthly rates for the option years range from $6,384 per month to $6,688 per month for the option years 4 through 9 of the lease. If the Company fails to exercise its option for option years 4 and 5, a lease termination payment of $7,300 will be due at the end of the initial 3-year term. In the first quarter of 2019, the Company signed a new lease on office space in Cranbury New Jersey commencing on February 1, 2019. The lease is a 3-year lease calling for monthly payments ranging from $2,707 to $2,808 plus utilities during the term of the lease. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 provides for a new impairment model which requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable and available for sale debt securities. ASU 2016-13 will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. The second step measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under ASU 2017-04, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements and will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 3 – STOCKHOLDERS’ EQUITY During the quarters ended March 31, 2019 and 2018, we issued 8,336 and 6,249 shares, respectively, of our common stock to our independent directors in connection with our Director Compensation Plan, which calls for issuance of 2,084 shares per quarter to each independent director. These shares were valued at $106,834 and $28,875 at March 31, 2019 and 2018, respectively. During the quarter ended March 31, 2019, we issued 89,826 shares of our common stock and received proceeds of $343,785 in connection with the exercise of stock options under our 2013 equity compensation plan. We issued an additional 12,052 shares of our common stock in connection with the exercise of options using the net-settled method, which resulted in no cash. whereby no cash was received, but rather the exercise price was paid by the surrender of shares underlying the options. We also issued 130,001 shares of our common stock in the quarter ended March 31, 2019 in connection with restricted stock awards awarded in 2018. In March 2018, we issued 100,000 shares of common stock to a subsidiary of WPP, plc one of the world’s largest advertising companies, and a shareholder at the time, in full payment of all amounts due under a comarketing agreement that covered certain WPP plc 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.

Share Based Payments - Options

Share Based Payments - Options	3 Months Ended
	Mar. 31, 2019
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 $530,312 and $468,247 in compensation expense in the three months ended March 31, 2019 and 2018, 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 period as well as options issued in the current period. The fair value of these instruments was calculated using the Black-Scholes option pricing model. There is $1,564,919 of remaining expense related to unvested options to be recognized in the future.

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	NOTE 5 – CONTINGENCIES Litigation The Company is not currently involved in any legal proceedings.

Net Income (Loss) Per Share

Net Income (Loss) Per Share	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
NET INCOME (LOSS) PER SHARE	NOTE 6 – NET INCOME (LOSS) PER SHARE The following table sets forth the computation of basic and diluted net income (loss) per share. Three Months Ended 2019 2018 Numerator Net income (loss) $ 6,529 $ (189,179 ) Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 12,077,829 9,786,027 Effect of dilutive stock options, warrants, and stock grants 1,000,088 - Diluted 13,077,917 9,786,027 Net Income (Loss) per share Basic $ 0.00 $ (0.02 ) Diluted $ 0.00 $ (0.02 )

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 7 – SUBSEQUENT EVENTS In accordance with ASC 855-10, we have analyzed our operations subsequent to March 31, 2019 through the date these financial statements were issued and have determined that we do not have any material subsequent events to disclose or recognize in these financial statements.

New Lease Accounting Standard (

New Lease Accounting Standard (Tables)	3 Months Ended
	Mar. 31, 2019
Accounting Changes and Error Corrections [Abstract]
Schedule of operating expenses	Three Months Ended Operating lease cost $ 30,684 Short-term lease cost (1) 9,841 Total lease cost $ 40,525 (1) Short-term lease cost includes any lease with a term of less than 12 months.
Schedule of future minimum lease payments	As of March 31, 2019 2019(a) $ 102,012 2020 138,533 2021 140,881 2022 102,881 2023 99,722 Thereafter 150,684 Total 734,713 Less: discount 86,932 Total lease liabilities $ 647,781 (a) For the nine-month period beginning April 1, 2019.

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Schedule of basic and diluted net income (loss) per share	Three Months Ended 2019 2018 Numerator Net income (loss) $ 6,529 $ (189,179 ) Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 12,077,829 9,786,027 Effect of dilutive stock options, warrants, and stock grants 1,000,088 - Diluted 13,077,917 9,786,027 Net Income (Loss) per share Basic $ 0.00 $ (0.02 ) Diluted $ 0.00 $ (0.02 )

New Accounting Standards (Detai

New Accounting Standards (Details)	3 Months Ended
	Mar. 31, 2019USD ($)
Accounting Changes and Error Corrections [Abstract]
Operating lease cost	$ 30,684
Short-term lease cost	9,841	[1]
Total lease cost	$ 40,525
[1]	Short-term lease cost includes any lease with a term of less than 12 months.

New Accounting Standards (Det_2

New Accounting Standards (Details 1)	Mar. 31, 2019USD ($)
Accounting Changes and Error Corrections [Abstract]
2019	$ 102,012	[1]
2020	138,533
2021	140,881
2022	102,881
2023	99,722
Thereafter	150,684
Total	734,713
Less: discount	86,932
Total lease liabilities	$ 647,781
[1]	For the nine-month period beginning April 1, 2019.

New Accounting Standards (Det_3

New Accounting Standards (Details Textual) - USD ($)	Jan. 02, 2019	Mar. 31, 2019	Dec. 31, 2018
Right of use assets	$ 462,000	$ 644,335
Weighted average remaining lease term		5 years 9 months 18 days
Weighted average discount rate		4.50%
Lease-related liabilities	$ 465,000	$ 30,684
Payments on lease obligations		25,208
Amortization on right of use assets		$ 29,295
Description of lease		The Company initially signed the lease for its current office space located in Rochester Michigan on December 1, 2011. That lease expired on November 30, 2016 and the Company signed a new lease for the same space. The current lease is a three-year lease beginning December 1, 2016, with options for up to an additional 6 years. The rent is payable monthly at rates of $6,232, $6,308, and $6,384 per month for years 1, 2, and 3 of the lease, respectively. The monthly rates for the option years range from $6,384 per month to $6,688 per month for the option years 4 through 9 of the lease. If the Company fails to exercise its option for option years 4 and 5, a lease termination payment of $7,300 will be due at the end of the initial 3-year term.
Lease term		3 years
Minimum [Member]
Payments on lease obligations		$ 2,707
Maximum [Member]
Payments on lease obligations		$ 2,808

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stockholders' Equity (Textual)
Shares of common stock issued	100,000
Shares of common stock issued, value	$ 447,000
Restricted Stock [Member]
Stockholders' Equity (Textual)
Shares of common stock issued	130,001
Stock Options [Member]
Stockholders' Equity (Textual)
Shares of common stock issued	89,826
Shares of common stock issued, value	$ 343,785
Additionally common stock issued	12,052
Director [Member]
Stockholders' Equity (Textual)
Compensation plan issuance of shares	2,084
Shares of common stock issued	8,336	6,249
Shares of common stock issued, value	$ 106,834	$ 28,875

Share Based Payments - Options

Share Based Payments - Options (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share Based Payments - Options (Textual)
Compensation expense	$ 530,312	$ 468,247
Remaining expense related to unvested options to be recognized in future	$ 1,564,919

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator
Net income (loss)	$ 6,529	$ (189,179)
Weighted average shares outstanding used in computing net income (loss) per share
Basic	12,077,829	9,786,027
Effect of dilutive stock options, warrants, and stock grants	1,000,088
Diluted	13,077,917	9,786,027
Net Income (Loss) per share
Basic	$ 0	$ (0.02)
Diluted	$ 0	$ (0.02)