SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 5, 2020

 

OptimizeRx Corporation

(Exact name of registrant as specified in its charter)

 

Nevada   001-38543   26-1265381
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification No.)

 

400 Water Street, Suite 200, Rochester, MI   48307
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: 248.651.6568

 

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Securities registered pursuant to Section 12(b) of the Act: 

 

Title of each class   Trading symbol   Name of each exchange on which registered
Common Stock   OPRX   Nasdaq Capital Market

 

 

 

 

SECTION 2 – Financial Information

 

Item 2.02Results of Operations and Financial Condition.

 

On August 5, 2020, we issued a press release announcing the results of operations for the quarter ended June 30, 2020. The press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

 

The information furnished under this Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, regardless of any general incorporation by reference language in such filing, except as shall be expressly set forth by specific reference in any such filing.

 

SECTION 9 – Financial Statements and Exhibits

 

Item 9.01Financial Statements and Exhibits.

 

Exhibit No. Description
99.1 Press release, dated August 5, 2020

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

OptimizeRx Corporation  
   
/s/ Douglas Baker  
Douglas Baker  
Chief Financial Officer  
   

Date: August 6, 2020

 

 

 

Exhibit 99.1

 


OptimizeRx Reports Second Quarter 2020 Revenue Up 25% to a Record $8.8 Million; First Half Revenue up 34% to Record $16.4 Million, with Accelerated Growth Expected in Second Half

ROCHESTER, Mich., (August 5, 2020) — OptimizeRx Corp. (Nasdaq: OPRX), a leading provider of digital health solutions for life science companies, physicians and patients, reported results for the second quarter and six months ended June 30, 2020. Quarterly and first half comparisons are to the same year-ago period.

Financial Highlights

·Revenue increased 25% to a record $8.8 million in second quarter of 2020, first half of 2020 up 34% to a record $16.4 million.
·Gross profit increased 19% to $5.1 million in the second quarter of 2020.
·Cash and cash equivalents totaled $14.1 million at June 30, 2020.
·Closed additional enterprise deals, bringing total value of enterprise-level engagements to $21 million in annualized revenue.
·Accelerated growth expected in second half of 2020.

Q2 2020 Operational Highlights

·Finalized a new partnership that expands the company’s digital communication platform by more than 300 health systems and 125,000 healthcare providers that use the market-leading Epic and Cerner electronic health records systems (EHRs).
·Launched TelaRep™ for on-demand virtual consults that support physicians treating patients with complex diseases in COVID-19 world.
·True™ Women’s Health launched a new mobile app powered by OptimizeRx’s RMDY digital health tools that enables the clinic to use telehealth to treat patients nationwide with personalized health and wellness programs during the COVID-19 pandemic.
·Recognized as one of The Americas' 500 Fastest-Growing Companies by The Financial Times.
·Chief commercial officer, Stephen Silvestro, was honored with the 2020 PM360 ELITE 100 Award for his organizational leadership and positive impact on the healthcare industry.
·Hosted new webinar series featuring industry thought leaders covering a range of topics around using digital health technology to improve patient care, engagement and outcomes.

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Q2 2020 Financial Summary

Total revenue in the second quarter of 2020 increased 25% to a record $8.8 million versus $7.0 million in the same year-ago quarter. The quarterly increase was due to increased sales of messaging solutions.

Gross margin decreased to 58.6% in the second quarter of 2020 from 61.6% in the year-ago quarter. The decrease was due to an unusually favorable product mix in the year-ago period that had a high percentage of launch assistance services and other nonrecurring revenue that was not subject to revenue share expense. The company expects its gross margin to improve on a quarter-over-quarter basis for the balance of the year, with a target of 63% for 2020.

Operating expenses totaled $6.2 million, up from $3.8 million in the same year-ago quarter. The increase was related to the company building a stronger base for future growth by expanding its product line, building out its sales organization, and integrating two acquisitions over the last 21 months.

Net loss on a GAAP basis in the second quarter of 2020 was $1.1 million or $(0.07) per share, as compared to a net income of $407,000 or $0.03 per share in the year-ago quarter.

Non-GAAP net income for the second quarter of 2020 was $254,000 or $0.02 per share, compared to non-GAAP net income of $1.3 million or $0.09 per diluted share in the same year-ago period (see definition of these non-GAAP measures and reconciliation to GAAP, below).

While the company expects to return to GAAP profitability as its revenue grows, expenses related to investments in growth initiatives or non-cash charges could result in a loss in any given quarter. Given the opportunity at hand as discussed below, the company is focused on top-line growth while maintaining a strong balance sheet.  

Cash and cash equivalents totaled $14.1 million at June 30, 2020, as compared to $15.2 million at March 31, 2020. The decrease was due to an earnout payment related to the CareSpeak acquisition based on the achievement of revenue goals for 2019. Excluding the earning out payment, the company was cash flow positive for the quarter. The company has continued to operate debt-free and expects to be cash-flow positive for the remainder of the year.

Management Commentary

“In Q2, we generated another record topline along with sequential margin improvement,” said OptimizeRx CEO William Febbo. “For the first half of the year, which is traditionally our slowest, we grew at a faster pace than anticipated at 34%, and our closing ratio exceeded 50%.

“During the quarter, we expanded our digital health platform with greater reach into Epic and Cerner, and we secured revenue from new solutions born out of our Innovation Lab. Our performance also benefited from the fine-tuning our patient engagement market strategy at a time when demand has never been greater due to the COVID-19 pandemic.

“In all, we beat our internal goals across the board as we continued to build a highly impactful digital communications platform that is situated between all the major stakeholders---a nationwide network helping doctors, patients and industry improve adherence and affordability.

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“As COVID-19 continues to disrupt the traditional pathways of communication between industry, doctors and patients due to the drop in office visits and widespread transition to virtual care, OptimizeRx has emerged with optimal solutions that improve these essential lines of communication.

“We’ve also been working to enhance our corporate governance and we recently welcomed to our board Greg Wasson, the former president and CEO of Walgreens Boots Alliance. Greg’s many years of experience building Walgreens into a Fortune 50 company with global reach makes him an exceptionally valuable and timely addition to our board, and particularly as we look to enhance patient connectivity at the point-of-dispense.

“We have built meaningful physician reach over the years, and with some measure of exclusivity, by integrating our platform into the leading EHR and e-prescribe systems. Today we reach 60% of the ambulatory market. That is, where most prescribing occurs. Now we have another great opportunity to improve care by integrating with pharmacies at the point-of-dispense.

“We are seeing great traction with our clients on multiple levels. We are deeply entrenched in our client base as we work with 45% of the top 20 brands by revenue with continued interest from the remaining 55%.

“This powerful position reflects the trust we’ve gained with our clients at a time when digital communication is absolutely needed, and it is supporting our continued shift to a SaaS-based, recurring revenue model. We recently secured two new SaaS-based enterprise-level deals, bringing to total the value of our enterprise-level engagements to $21 million in annualized revenue.

“Most of our growth this year has been organic, as our pharma clients increasingly recognize that addressing the point of care is critical to an effective marketing strategy. Our newer solutions, like patient engagement, hub enrollment and TelaRep, are all generating interest and beginning to generate revenue within our client base. We see these helping to drive growth this year and even stronger growth next year. We came in ahead of our internal budget for the first half and now expect to far exceed our earlier goals for the second, keeping us on pace for another year of record growth and market expansion.”

Conference Call

OptimizeRx management will host the presentation, followed by a question and answer period.

 

Date: Wednesday, August 5, 2020

Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

Toll-free dial-in number: 1-866-248-8441

International dial-in number: 1-323-289-6576

Conference ID: 1161129

 

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Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.

 

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through August 26, 2020, as well as available for replay via the Investors section of the OptimizeRx website at optimizerx.com/investors.

 

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 1161129

 

Definition and Use of Non-GAAP Financial Measures

This earnings release includes a presentation of non-GAAP net income (loss) and non-GAAP earnings (loss) per share or non-GAAP EPS, both of which are non-GAAP financial measures.

 

The company defines non-GAAP net income (loss) as GAAP net income (loss) with an adjustment to add back depreciation, amortization, non-cash lease expense, stock-based compensation, acquisition expenses, income or loss related to the fair value of contingent consideration, and deferred income taxes. Non-GAAP EPS is defined as non-GAAP net income (loss) divided by the number of weighted average shares outstanding on a basic and diluted basis. The company has provided non-GAAP financial measures to aid investors in better understanding its performance. Management believes that these non-GAAP financial measures provide additional insight into the operations and cashflow of the company.

 

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash operating expenses, management believes that providing non-GAAP financial measures that excludes non-cash expenses allows for meaningful comparisons between the company’s core business operating results and those of other companies, as well as provides an important tool for financial and operational decision making and for evaluating the company’s own core business operating results over different periods of time.

 

The company’s non-GAAP net income (loss) and non-GAAP EPS measures may not provide information that is directly comparable to that provided by other companies in the company’s industry, as other companies in the industry may calculate such non-GAAP financial results differently. The company’s non-GAAP net income (loss) and non-GAAP EPS are not measurements of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. The company does not consider these non-GAAP measures to be substitutes for or superior to the information provided by its GAAP financial results.

 

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The table, “Reconciliation of non-GAAP to GAAP Financial Measures,” included below, provides a reconciliation of non-GAAP net income (loss) and non-GAAP EPS for the three months and six months periods ended June 30, 2020 and 2019.

 

About OptimizeRx

OptimizeRx Corporation (NASDAQ: OPRX) is a digital health company that facilitates communication at the point-of-care among all stakeholders in healthcare. Primarily focused on life science and payer clients, its suite of digital and mobile SaaS-based solutions enables affordability, patient adherence and care management. OptimizeRx’s 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. OptimizeRx’s fully integrated platform supports the real-time exchange of information, improving provider knowledge and patient engagement, and ultimately leading to healthier outcomes.

For more information, follow the company on Twitter, LinkedIn or visit www.optimizerx.com. 

 

Important Cautions Regarding Forward Looking Statements

This press release contains forward-looking statements within the definition of Section 27A of the Securities Act of 1933, as amended, and such as in section 21E of the Securities Act of 1934, as amended. These forward-looking statements should not be used to make an investment decision. The words 'estimate,' 'possible' and 'seeking' and similar expressions identify forward-looking statements, which speak only as to the date the statement was made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, competition, and other material risks.

 

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Company Contact

Doug Baker, CFO

Tel (248) 651-6568 x807

dbaker@optimizerx.com

 

Media Contact

Maira Alejandra, Media Relations Manager

Tel (754) 245-7070

malejandra@optimizerx.com

 

Investor Relations Contact

Ron Both or Grant Stude

CMA Investor Relations

Tel (949) 432-7557

oprx@cma.team

 

 

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OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

  

   June 30,
2020
   December 31,
2019
 
         
ASSETS        
Current Assets          
Cash and cash equivalents  $14,114,294   $18,852,680 
Accounts receivable, net   10,805,191    7,418,025 
Prepaid expenses   2,701,249    871,043 
Total Current Assets   27,620,734    27,141,748 
Property and equipment, net   156,550    176,014 
Other Assets          
Goodwill   14,740,031    14,740,031 
Technology assets, net   5,722,762    6,238,453 
Patent rights, net   2,442,409    2,550,587 
Other intangible assets, net   4,835,327    5,151,102 
Right of use assets, net   503,506    559,863 
Other assets and deposits   35,943    80,727 
Total Other Assets   28,279,978    29,320,763 
TOTAL ASSETS  $56,057,262   $56,638,525 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities          
Accounts payable – trade  $496,742   $492,995 
Accrued expenses   2,044,335    1,800,635 
Revenue share payable   3,496,489    1,618,438 
Current portion of lease obligations   119,512    115.431 
Current portion of contingent purchase price payable   5,360,812    1,500,000 
Deferred revenue   648,692    580,014 
Total Current Liabilities   12,166,582    6,107,513 
Non-current Liabilities          
Lease obligations, net of current portion   387,654    448,753 
Contingent purchase price payable, net of current portion   -      5,220,000 
Total Non-current Liabilities   387,654    5,668,753 
Total Liabilities   12,554,236    11,776,266 
Commitments and contingencies   -      -   
Stockholders’ Equity          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at June 30, 2020 or December 31, 2019   -      -   
Common stock, $0.001 par value, 500,000,000 shares authorized, 14,752,600 and 14,600,579 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively   14,753    14,601 
Additional paid-in-capital   80,194,282    78,272,268 
Accumulated deficit   (36,706,009)   (33,424,610)
Total Stockholders’ Equity   43,503,026    44,862,259 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $56,057,262   $56,638,525 

 

 

 

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 OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

    

   For the Three Months
Ended
   For the Six Months
Ended
 
   June 30,   June 30, 
   2020   2019   2020   2019 
                 
NET REVENUE  $8,783,230   $7,006,291   $16,367,832   $12,215,725 
COST OF REVENUES   3,639,016    2,687,143    6,880,779    4,270,623 
GROSS MARGIN   5,144,214    4,319,148    9,487,053    7,945,102 
                     
OPERATING EXPENSES   6,200,027    3,839,105    12,802,118    7,332,894 
INCOME (LOSS) FROM OPERATIONS   (1,055,813)   480,043    (3,315,065)   612,208 
                     
OTHER INCOME (EXPENSE)                    
Interest income   8,345    33,574    63,666    55,938 
Change in Fair Value of Contingent Consideration   (30,000)   (107,000)   (30,000)   (255,000)
                     
TOTAL OTHER INCOME (EXPENSE)   (21,655)   (73,426)   33,666    (199,062)
                     
INCOME(LOSS)  BEFORE PROVISION FOR INCOME TAXES   (1,077,468)   406,617    (3,281,399)   413,146 
                     
PROVISION FOR INCOME TAXES   -      -      -      -   
NET INCOME (LOSS)  $(1,077,468)  $406,617   $(3,281,399)  $413,146 
                     
WEIGHTED AVERGE SHARES OUTSTANDING                    
BASIC   14,667,216    12,743,379    14,638,359    12,412,442 
DILUTED   14,667,216    13,806,761    14,638,359    13,467,562 
                     
EARNINGS (LOSS) PER SHARE                    
BASIC  $(0.07)  $0.03   $(0.22)  $0.03 
DILUTED  $(0.07)  $0.03   $(0.22)  $0.03 

  

 

 

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OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

   

   For the Six Months Ended
June 30,
 
   2020   2019 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net Income (Loss)  $(3,281,399)  $413,146 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:          
Depreciation, amortization, and non-cash lease expense   1,040,463    425,873 
Stock-based compensation   1,435,156    938,399 
Stock issued for board services   200,027    241,077 
Provision for loss on accounts receivable   40,000    -   
Change in fair value of contingent consideration   30,000    255,000 
Changes in:          
Accounts receivable   (3.427,166)   (966,658)
Prepaid expenses and other assets   (1,785,422)   (202,036)
Accounts payable   3,747    785 
Revenue share payable   1,878,051    55,824 
Accrued expenses and other liabilities   186,682    (511,976)
Deferred revenue   68,678    158,766 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   (3,611,183)   808,200 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of equipment   (24,998)   (47,739)
Purchase of intangible assets   -      (1,000,000)
NET CASH USED IN INVESTING ACTIVITIES   (24,998)   (1,047,739)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
    Proceeds from issuance of common stock, net of commission costs   286,983    21,163,636 
    Expenses related to issuance cost of common stock   -      (301,711)
    Payment of contingent consideration   (1,389,188)   -   
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   (1,102,205)   21,861,925 
NET INCREASE IN CASH AND CASH EQUIVALENTS   (4,738,386)   21,622,386 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   18,852,680    8,914,034 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $14,114,294   $30,536,420 
           
SUPPLEMENTAL CASH FLOW INFORMATION:          
Cash paid for interest  $-     $-   
Cash paid for income taxes  $-     $-   
Intangible asset additions included in accounts payable  $-     $500,000 
Non-cash effect of cumulative adjustments to accumulated deficit  $-     $3,229 
Lease liabilities arising from right of use assets  $-     $672,809 

 

 

 

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OPTIMIZERx CORPORATION

Reconciliation of non-GAAP to GAAP Financial Measures

(Unaudited)

 

 

   For the Three Months
Ended June 30,
   For the Six Months
Ended June 30,
 
   2020   2019   2020   2019 
Net income (loss)  $(1,077,468)  $406,617   $(3,281,398)  $413,146 
Depreciation, amortization and non-cash lease expense   520,794    235,571    1,040,463    425,817 
Stock-based compensation   780,670    543,866    1,635,182    1,179,476 
Income or loss related to the fair value of contingent consideration   30,000    107,000    30,000    255,000 
Non-GAAP net income (loss)  $253,996   $1,293,054   $(575,753)  $2,273,439 
                     
Non-GAAP net income (loss) per share                    
        Basic  $0.02   $0.10   $(0.04)  $0.18 
        Diluted  $0.02   $0.09   $(0.04)  $0.17 
Weighted average shares outstanding:                    
        Basic   14,667,216    12,743,379    14,638,359    12,412,442 
        Diluted   15,626,367    13,806,761    14,638,359    13,467,562 
                     

 

 

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