OptimizeRx (OPRX) 10-Q 6 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 04, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	OptimizeRx Corp
Entity Central Index Key	0001448431
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity File Number	001-38543
Entity Emerging Growth Company	false
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		14,646,747
Entity Incorporation State Country Code	NV

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 15,210,069	$ 18,852,680
Accounts receivable, net	9,061,520	7,418,025
Prepaid expenses	3,035,205	871,043
Total Current Assets	27,306,794	27,141,748
Property and equipment, net	170,123	176,014
Other Assets
Goodwill	14,740,031	14,740,031
Technology assets, net	5,980,607	6,238,453
Patent Rights, net	2,496,498	2,550,587
Right of use assets, net	531,844	559,863
Other intangible assets, net	4,993,215	5,151,102
Security deposits and other assets	16,013	80,727
Total Other Assets	28,758,208	29,320,763
TOTAL ASSETS	56,235,125	56,638,525
Current Liabilities
Accounts payable - trade	548,100	492,995
Accrued expenses	1,674,477	1,800,635
Revenue share payable	2,640,249	1,618,438
Current portion of lease obligations	117,479	115,431
Current portion of contingent purchase price payable	4,000,000	1,500,000
Deferred revenue	491,438	580,014
Total Current Liabilities	9,471,743	6,107,513
Non-current Liabilities
Lease obligations, net of current portion	418,390	448,753
Contingent purchase price payable, net of current portion	2,720,000	5,220,000
Total Non-current liabilities	3,138,390	5,668,753
Total Liabilities	12,610,133	11,776,266
Commitments and contingencies (See note 7)
Stockholders' Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2020 or December 31, 2019
Common stock, $0.001 par value, 166,666,667 shares authorized, 14,646,747 and 14,600,579 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	14,647	14,601
Additional paid-in-capital	79,238,886	78,272,268
Accumulated deficit	(35,628,541)	(33,424,610)
Total Stockholders' Equity	43,624,992	44,862,259
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 56,235,125	$ 56,638,525

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
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	14,646,747	14,600,579
Common stock, shares outstanding	14,646,747	14,600,579

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
NET REVENUE
TOTAL REVENUE	$ 7,584,602	$ 5,209,434
COST OF REVENUES	3,241,763	1,583,480
GROSS MARGIN	4,342,839	3,625,954
OPERATING EXPENSES	6,602,091	3,493,789
INCOME (LOSS) FROM OPERATIONS	(2,259,252)	132,165
OTHER INCOME (EXPENSE)
Interest Income	55,321	22,364
Change in Fair Value of Contingent Consideration		(148,000)
Interest (Expense)
TOTAL OTHER INCOME (EXPENSE)	55,321	(125,636)
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	(2,203,931)	6,529
NET INCOME (LOSS)	$ (2,203,931)	$ 6,529
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC	14,609,499	12,077,829
DILUTED	14,609,499	13,077,917
NET LOSS PER SHARE
BASIC	$ (0.15)	$ 0
DILUTED	$ (0.15)	$ 0

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($)	Common Stock	Additional Paid in Capital	Accumulated Deficit	Total
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-based compensation expense		530,312		530,312
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
Balance at Dec. 31, 2019	$ 14,601	78,272,268	(33,424,610)	44,862,259
Balance, shares at Dec. 31, 2019	14,600,579
Shares issued as board compensation	$ 11	99,989		100,000
Shares issued as board compensation, shares	11,136
Shares issued for stock options exercised	$ 35	112,117		112,152
Shares issued for stock options exercised, shares	35,032
Stock-based compensation expense		754,512		754,512
Net income loss			(2,203,931)	(2,203,931)
Balance at Mar. 31, 2020	$ 14,647	$ 79,238,886	$ (35,628,541)	$ 43,624,992
Balance, shares at Mar. 31, 2020	14,646,747

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)	$ (2,203,931)	$ 6,529
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, amortization and non-cash lease expense	519,669	190,301
Stock-based compensation	754,512	530,312
Stock issued for board service	100,000	106,034
Change in fair value of contingent consideration		148,000
Changes in:
Accounts receivable	(1,643,495)	1,554,953
Prepaid expenses and other assets	(2,099,448)	(44,201)
Accounts payable	55,105	173,810
Revenue share payable	1,021,811	(776,514)
Accrued expenses and other liabilities	(154,473)	(1,034,454)
Deferred revenue	(88,576)	35,199
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(3,738,826)	889,969
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of equipment	(15,937)	(13,848)
NET CASH USED IN INVESTING ACTIVITIES	(15,937)	(13,848)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Proceeds from exercise of stock options	112,152	343,785
NET CASH PROVIDED BY FINANCING ACTIVITIES	112,152	343,785
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(3,642,611)	1,219,906
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	18,852,680	8,914,034
CASH AND CASH EQUIVALENTS - END OF PERIOD	15,210,069	10,133,940
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
Cash paid for income taxes
Non-cash effect of cumulative adjustments to accumulated deficit		3,229
Lease liabilities arising from right of use assets		$ 207,559

Nature of Business and Basis of

Nature of Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2020
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 digital health company that facilitates communication at point-of-care among all stakeholders in healthcare. Primarily focused on life science clients, our suite of digital and mobile SaaS-based solutions enables affordability, patient adherence and care management. Our network reaches more than 60% of U.S. ambulatory providers, delivering therapeutic support on specialty medications and patient financial assistance directly within a provider's workflow through leading electronic health platforms. Our fully integrated platform ensures the real-time exchange of information—connecting care to improve provider knowledge and patient engagement. The condensed consolidated financial statements for the three months ended March 31, 2020 and 2019 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, 2020, and our results of operations, changes in stockholders' equity, and cash flows for the three months ended March 31, 2020 and 2019, have been made. Those adjustments consist of normal and recurring adjustments. The condensed consolidated condensed balance sheet as of December 31, 2019, 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, 2019, as filed with the U.S. Securities and Exchange Commission on March 26, 2020. The results of operations for the three-months ended March 31, 2020, are not necessarily indicative of the results to be expected for the full year.

New Accounting Standards

New Accounting Standards	3 Months Ended
	Mar. 31, 2020
Accounting Changes and Error Corrections [Abstract]
NEW ACCOUNTING STANDARDS	NOTE 2 – NEW ACCOUNTING STANDARDS 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 that 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 was effective for the Company on January 1, 2020. The adoption of this standard did not have a material effect on our financial position, results of operations, or cash flows. In August 2019, the FASB issued ASU 2019-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2019-13 modifies the disclosure requirements on fair value measurements and became effective for the Company on January 1, 2020. The adoption of this standard did not have a material effect on our financial position, results of operations, or cash flows. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes 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 adoption of this standard did not have a material effect on our financial position, results of operations, or cash flows.

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
LEASES	NOTE 3 – LEASES We have operating leases for office space in three multitenant facilities with lease terms greater than 12 months, which are recorded as assets and liabilities on our balance sheet. These leases include our corporate headquarters, located in Rochester, Michigan, a customer service facility in Cranbury, New Jersey, and a technical facility in Zagreb, Croatia. 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. Amortization of the right of use assets is recognized as non-cash lease expense on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Short term lease costs include month to month leases in shared office space facilities, such as WeWork, or similar locations. For the three months ended March 31, 2020 and 2019, the Company's lease cost consists of the following components, each of which is included in operating expenses within the Company's condensed consolidated statements of operations: Three Months Three Months Operating lease cost $ 32,814 $ 30,684 Short-term lease cost 44,629 9,841 Total lease cost $ 77,443 $ 40,525 The table below presents the future minimum lease payments to be made under operating leases as of March 31, 2020: As of March 31, 2020 2020(a) $ 103,603 2021 140,367 2022 102,367 2023 99,209 2024 80,375 Thereafter 70,224 Total 596,145 Less: discount 60,276 Total lease liabilities $ 535,869 (a) For the nine-month period beginning April 1, 2020. The weighted average remaining lease term at March 31, 2020 for operating leases is 4.9 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 was $28,316 and $30,684 for the three months ending March 31, 2020 and 2019, respectively. For the three months ended March 31, 2020 and 2019, payments on lease obligations were $34,416 and $25,208, respectively, and amortization on the right of use assets was $28,019 and $25,245, respectively.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2020
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 4 – STOCKHOLDERS' EQUITY During the quarters ended March 31, 2020 and 2019, we issued 11,136 and 8,336 shares, respectively, of our common stock to our independent directors in connection with our Director Compensation Plan. These shares were valued at $100,000 and $106,834 at March 31, 2020 and 2019, respectively. During the quarter ended March 31, 2020, we issued 35,032 shares of our common stock and received proceeds of $112,152 in connection with the exercise of stock options under our 2013 equity compensation plan. 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 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.

Share Based Payments - Options

Share Based Payments - Options and Restricted Stock	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
SHARE BASED PAYMENTS - OPTIONS AND RESTRICTED STOCK	NOTE 5 – SHARE BASED PAYMENTS – OPTIONS AND RESTRICTED STOCK We use the fair value method to account for stock-based compensation. We recorded $547,828 and $530,312 in compensation expense in the three months ended March 31, 2020 and 2019, 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 $2,185,349 of remaining expense related to unvested options to be recognized in the future over a weighted average period of 1.6 years. The total intrinsic value of outstanding options at March 31, 2020 was $6,810,214. We also recorded $206,684 in compensation expense related to restricted stock awards that vest over time in the three months ended March 31, 2020. There is $1,245,841 of remaining expense related to unvested restricted stock awards to be recognized in the future over a weighted average period of 2.8 years.

Net Income (Loss) per Share

Net Income (Loss) per Share	3 Months Ended
	Mar. 31, 2020
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 2020 2019 Numerator Net Income (Loss) $ (2,203,931 ) $ 6,529 Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 14,609,499 12,077,829 Effect of dilutive stock options, warrants, and stock grants - 1,000,088 Diluted 14,609,499 13,077,917 Net Income (Loss) per share Basic $ (0.15 ) $ 0.00 Diluted $ (0.15 ) $ 0.00 No calculation of diluted earnings per share is included for 2020 as the effect of the calculation would be antidilutive. The number of common shares potentially issuable upon the exercise of certain options that were excluded from the diluted loss per common share calculation in 2020 was 779,670 related to options, and 174,176 related to restricted stock, for a total of 953,846.

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	NOTE 7 – CONTINGENCIES Litigation The Company is not currently involved in any legal proceedings. COVID-19 Due to the COVID

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 8 – SUBSEQUENT EVENTS In accordance with ASC 855-10, we have analyzed our operations subsequent to March 31, 2020 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.

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Schedule of lease cost	Three Months Three Months Operating lease cost $ 32,814 $ 30,684 Short-term lease cost 44,629 9,841 Total lease cost $ 77,443 $ 40,525
Schedule of future minimum lease payments	As of March 31, 2020 2020(a) $ 103,603 2021 140,367 2022 102,367 2023 99,209 2024 80,375 Thereafter 70,224 Total 596,145 Less: discount 60,276 Total lease liabilities $ 535,869 (a) For the nine-month period beginning April 1, 2020.

Net Income (Loss) per Share (Ta

Net Income (Loss) per Share (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Schedule of basic and diluted net income (loss) per share	Three Months Ended 2020 2019 Numerator Net Income (Loss) $ (2,203,931 ) $ 6,529 Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 14,609,499 12,077,829 Effect of dilutive stock options, warrants, and stock grants - 1,000,088 Diluted 14,609,499 13,077,917 Net Income (Loss) per share Basic $ (0.15 ) $ 0.00 Diluted $ (0.15 ) $ 0.00

Leases (Details)

Leases (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease cost	$ 32,814	$ 30,684
Short-term lease cost	44,629	9,841
Total lease cost	$ 77,443	$ 40,525

Leases (Details 1)

Leases (Details 1)	Mar. 31, 2020USD ($)
Leases [Abstract]
2020	$ 103,603	[1]
2021	140,367
2022	102,367
2023	99,209
2024	80,375
Thereafter	70,224
Total	596,145
Less: discount	60,276
Total lease liabilities	$ 535,869
[1]	For the nine-month period beginning April 1, 2020.

Leases (Details Textual)

Leases (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases (Textual)
Weighted average remaining lease term	4 years 10 months 25 days
Weighted average discount rate	4.50%
Measurement of lease liabilities	$ 28,316	$ 30,684
Payments on lease obligations	34,416	25,208
Amortization right of use assets	$ 28,019	$ 25,245

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Stockholders' Equity (Textual)
Net proceeds issuance of common stock	$ 112,152	$ 343,785
Issued shares of common stock in connection with cashless exercise	35,032	89,826
Compensation plan issuance of shares	12,052
Restricted common stock awards, shares		130,001
Independent Directors [Member]
Stockholders' Equity (Textual)
Shares of common stock issued	11,136	8,336
Shares of common stock issued, value	$ 100,000	$ 106,834

Share Based Payments - Option_2

Share Based Payments - Options and Restricted Stock (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share Based Payments - Options and Restricted Stock (Textual)
Weighted average contractual life	1 year 7 months 6 days
Expense remaining to be recognized related to unvested options	$ 2,185,349
Intrinsic value of outstanding options	6,810,214
Stock Compensation Plan [Member]
Share Based Payments - Options and Restricted Stock (Textual)
Stock compensation recognized expense	547,828	$ 530,312
Restricted Stock Awards [Member]
Share Based Payments - Options and Restricted Stock (Textual)
Stock compensation recognized expense	$ 206,684
Weighted average contractual life	2 years 9 months 18 days
Expense remaining to be recognized related to unvested options	$ 1,245,841

Net Income (Loss) per Share (De

Net Income (Loss) per Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Numerator
Net Income (Loss)	$ (2,203,931)	$ 6,529
Weighted average shares outstanding used in computing net income (loss) per share
Basic	14,609,499	12,077,829
Effect of dilutive stock options, warrants, and stock grants		1,000,088
Diluted	14,609,499	13,077,917
Net Income (Loss) per share
Basic	$ (0.15)	$ 0
Diluted	$ (0.15)	$ 0

Net Income (Loss) per Share (_2

Net Income (Loss) per Share (Details Textual)	3 Months Ended
	Mar. 31, 2020shares
Net Income (Loss) per Share (Textual)
Diluted loss per common share	953,846
Restricted Stock [Member]
Net Income (Loss) per Share (Textual)
Diluted loss per common share	174,176
Options [Member]
Net Income (Loss) per Share (Textual)
Diluted loss per common share	779,670