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UNITED STATES

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): November 8, 2022

 

OptimizeRx Corporation

(Exact name of registrant as specified in charter)

 

Nevada

 

001-38543

 

26-1265381

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(IRS 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

 

Not Applicable

(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 (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 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))

 

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

 

Title of each class  

Trading Symbol(s)

  Name of each exchange on which registered
Common Stock, $0.001 Par Value   OPRX   The Nasdaq Capital Market

 

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.

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On November 8, 2022, OptimizeRx Corporation issued a press release announcing its financial results for the third quarter ended September 30, 2022. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

 

The information in this Item 2.02 and Exhibit 99.1 attached hereto are furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

Exhibit

Number

  Description
   
99.1   Press release, dated November 8, 2022
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

1

 

 

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
   
Date: November 8, 2022 By: /s/ Edward Stelmakh
    Name:  Edward Stelmakh
    Title: Chief Financial Officer

 

 

2

 

 

Exhibit 99.1

 

 

 

OptimizeRx Reports Third Quarter 2022 Financial Results

 

-Q3 Revenue of $15.1 million, down 6% year-over-year and up 8% quarter-over-quarter

 

-Gross profit increased 4% year-over-year to $9.4 million as gross margins increased from 56% to 62%

     

-Generated $7.9 million in cash flow from operations during the first nine months of 2022

 

-Repurchased 1.1 million shares - year to date - at an average price of $16.70 per share

 

ROCHESTER, Mich. – November 8, 2022 OptimizeRx Corp. (the “Company”) (Nasdaq: OPRX), a leading provider of point-of-care technology solutions helping patients start and stay on therapy, reported results for the three months ended September 30, 2022. Quarterly comparisons are to the same year-ago period.

 

   Rolling Twelve Months Ended
September 30,
 
Key Performance Indicators (KPIs)*  2022   2021 
Average revenue per top 20 pharmaceutical manufacturer  $2,188,300   $2,516,515 
Percent of top 20 pharmaceutical manufacturers that are customers   95%   90%
Percent of total revenue attributable to top 20 pharmaceutical manufacturers   66%   79%
Net revenue retention   96%   161%
Revenue per average full-time employee  $618,711   $740,728 

 

Will Febbo, OptimizeRx CEO commented, “We are seeing significant momentum off the mid-year trough, and are confident that we are gaining traction across our business in particular with our Real World Evidence (RWE) solutions. RWE is an important growth driver, and we believe it aligns well with digital trends across the life sciences industry including pharma manufacturers moving a greater percentage of their commercial spend towards omni-channel digital solutions. We believe smarter solutions - such as OptimizeRx’s RWE - will capture the lion’s share of the pharma legacy commercial dollars that are reallocated to digital. We believe executing on just the RWE opportunities we have in front of us today could position us to grow our topline by over 20% next year.”

 

 

 

 

Financial Highlights

 

Revenue in the third quarter of 2022 decreased 6% to $15.1 million, from $16.1 million as compared to the same year ago period.

 

Gross profit in the third quarter of 2022 increased 4% year-over-year to $9.4 million.

 

GAAP net loss totaled $3.5 million or $(0.19) per basic and diluted share in the third quarter.

 

Non-GAAP net income in the third quarter totaled $1.3 million or $0.07 per fully diluted shares outstanding. (see definition of this non-GAAP measure and reconciliation to GAAP, below).

 

Cash, cash equivalents and short-term investments totaled $78.8 million as of September 30, 2022 as compared to $84.7 million as of December 31, 2021.

 

2022 Financial Outlook

 

Based on third quarter results, the Company is reiterating its full year financial outlook for 2022 for net revenue to be between $62 million and $68 million, representing year-over-year growth of 1% to 11%, respectively, and gross margins to be between 59% and 62%.

 

Conference Call

 

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

 

Date: Tuesday, November 8, 2022

 

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

 

Web access: https://viavid.webcasts.com/starthere.jsp?ei=1577818&tp_key=c51f87e696

 

Toll-free dial-in number: 1-888-999-3182

 

International dial-in number: 1-848-280-6330

 

Conference ID: 8072033

 

Please call the conference telephone number five minutes prior to the start time.

 

A replay of the call will remain available for 12 months via the Investors section of the OptimizeRx website at www.optimizerx.com/investors.

 

Definition and Use of Non-GAAP Financial Measures

 

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

 

The Company defines non-GAAP net income as GAAP net income (loss) with an adjustment to add back depreciation, amortization, 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 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 cash flow of the Company.

 

2

 

 

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 exclude 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 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 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.

 

The table, “Reconciliation of non-GAAP to GAAP Financial Measures,” included below, provides a reconciliation of non-GAAP net income and non-GAAP EPS for the three months ended September 30, 2022 and 2021.

 

Definition of Key Performance Indicators*

 

Top 20 pharmaceutical manufacturers: Top 20 pharmaceutical manufacturers are based on Fierce Pharma’s “The top 20 pharma companies by 2020 revenue.”

 

Net revenue retention: Net revenue retention is a comparison of revenue generated from all clients in the previous period to total revenue generated from the same clients in the following year (i.e., excludes new client relationships for the most recent year).

 

Revenue per average Full Time Employee: We define revenue per average full-time employee (FTE) as total revenue over the last 12 months (LTM) divided by the average number of employees over the LTM, which is calculated by taking our total number of FTEs at the end of the prior year period by our total FTE headcount at the end of the most recent.

 

About OptimizeRx

 

OptimizeRx provides best-in-class health technology that enables care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey. Connecting over 60% of U.S. healthcare providers and millions of their patients through the most intelligent technology platform embedded within a proprietary digital point-of-care network, OptimizeRx helps patients start and stay on their medications. 

 

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

 

3

 

 

Important Cautions Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “intends”, “plans”, “projects”, “targets”, “designed”, “could”, “may”, “should”, “will” or other similar words and expressions are intended to identify these forward-looking statements. All statements that reflect the Company’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to the Company’s growth, business plans and future performance. These forward-looking statements are based on the Company’s current expectations and assumptions regarding the Company’s business, the economy, and other future conditions. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise, except as required by applicable law. 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 risks summarized in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its subsequent Quarterly Reports on Form 10-Q, and its other filings with the Securities and Exchange Commission.

 

OptimizeRx Contact

 

Andy D’Silva, SVP Corporate Finance

 

adsilva@optimizerx.com

 

Relations Contact

 

Investor Relations Contact

 

Ashley Robinson

 

LifeSci Advisors, LLC

 

arr@lifesciadvisors.com

 

4

 

 

OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   September 30,
2022
   December 31,
2021
 
ASSETS        
Current Assets        
Cash and cash equivalents  $41,329,020   $84,681,770 
Short term investments   37,468,889     
Accounts receivable, net   17,813,708    24,800,585 
Prepaid expenses and other   2,722,987    5,630,655 
Total Current Assets   99,334,604    115,113,010 
Property and equipment, net   144,084    143,818 
Other Assets          
Goodwill   22,673,820    14,740,031 
Intangible assets, net   13,452,893    10,646,654 
Right of use assets, net   255,161    328,820 
Security deposits and other assets   12,859    12,859 
Total Other Assets   36,394,733    25,728,364 
TOTAL ASSETS  $135,873,421   $140,985,192 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities          
Accounts payable – trade  $1,000,625   $606,808 
Accrued expenses   1,699,558    2,902,836 
Revenue share payable   2,673,622    4,378,216 
Current portion of lease obligations   87,448    90,982 
Deferred revenue   673,214    1,389,907 
Total Current Liabilities   6,134,467    9,368,749 
Non-Current Liabilities          
Lease liabilities, net of current portion   166,751    236,726 
Total Liabilities   6,301,218    9,605,475 
Commitments and contingencies (See note 10)        
Stockholders’ Equity          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at September 30, 2022 and December 31, 2021        
Common stock, $0.001 par value, 166,666,667 shares authorized, 18,261,239 issued at September 30, 2022 and 17,860,975 shares issued and outstanding at December 31, 2021   18,261    17,861 
Treasury stock   (706)    
Additional paid-in-capital   175,920,910    166,615,514 
Accumulated deficit   (46,366,262)   (35,253,658)
Total Stockholders’ Equity  $129,572,203   $131,379,717 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $135,873,421   $140,985,192 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5

 

 

OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   For Three Months Ended
September 30,
   For Nine Months Ended
September 30,
 
   2022   2021   2022   2021 
                 
Net Revenue  $15,085,504   $16,124,951   $42,795,699   $40,979,801 
Cost of revenues   5,664,733    7,047,832    16,283,307    17,733,400 
Gross profit   9,420,771    9,077,119    26,512,392    23,246,401 
                     
Operating expenses                    
Salaries, wages, & benefits   5,088,955    4,619,320    15,376,370    12,106,933 
Stock-based compensation   4,277,241    1,008,007    11,476,662    2,612,198 
Other general and administrative expenses   3,811,334    3,411,602    11,085,750    8,787,250 
Total operating expenses   13,177,530    9,038,929    37,938,782    23,506,381 
Income (Loss) from operations   (3,756,759)   38,190    (11,426,390)   (259,980)
Other income                    
Interest income   289,967    1,704    313,786    14,597 
Income (Loss) before provision for income taxes   (3,466,792)   39,894    (11,112,604)   (245,383)
Income tax benefit                
Net Income (Loss)  $(3,466,792)  $39,894   $(11,112,604)  $(245,383)
Weighted average number of shares outstanding – basic   17,981,184    17,639,346    17,994,288    17,028,762 
Weighted average number of shares outstanding – diluted   17,981,184    18,198,412    17,994,288    17,028,762 
Income (loss) per share – basic  $(0.19)  $   $(0.62)  $(0.01)
Income (loss) per share – diluted  $(0.19)  $   $(0.62)  $(0.01)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6

 

 

OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   For Nine Months Ended
September 30,
 
   2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss  $(11,112,604)  $(245,383)
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depreciation and amortization   1,565,484    1,580,173 
Stock-based compensation   11,476,662    2,362,113 
Stock issued for board service       250,085 
Provision for loss on accounts receivable   132,727    60,000 
Changes in:          
Accounts receivable   6,854,150    (2,921,824)
Prepaid expenses and other assets   2,199,333    1,891,900 
Accounts payable   393,817    153,395 
Revenue share payable   (1,704,593)   (1,078,777)
Accrued expenses and other liabilities   (1,237,839)   (53,710)
Operating leases, net   150     
Deferred revenue   (716,693)   62,610 
NET CASH PROVIDED BY OPERATING ACTIVITIES   7,850,594    2,060,582 
           
CASH FLOWS USED IN INVESTING ACTIVITIES:          
Purchase of property and equipment   (64,667)   (62,565)
EvinceMed acquisition   (2,000,000)    
Purchase of short-term investments   

(37,468,889

)   

 
Purchase of intangible assets, including intellectual property rights   (158,321)   (324,413)
NET CASH USED IN INVESTING ACTIVITIES   (39,691,877)   (386,978)
           
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:          
Proceeds from public offering of common stock, net of offering costs       70,671,536 
Repurchase of common stock   (12,561,571)    
Proceeds from exercise of stock options   1,050,104    3,805,475 
Payment of contingent consideration       (1,610,813)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES   (11,511,467)   72,866,198 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS   (43,352,750)   74,539,802 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   84,681,770    10,516,776 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $41,329,020   $85,056,578 
           
SUPPLEMENTAL CASH FLOW INFORMATION:          
Cash paid for interest  $   $ 
Reduction of EvinceMed purchase price for amounts previously paid  $708,334   $ 
Shares issued in connection with acquisition  $9,374,455   $ 
Cash paid for income taxes  $   $ 

 

The accompanying notes are an integral part of these condensed consolidated financial statements. 

 

7

 

 

OPTIMIZERx CORPORATION

RECONCILIATION of NON-GAAP to GAAP FINANCIAL MEASURES

(UNAUDITED)

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2022   2021   2022   2021 
Net Income (Loss)  $(3,466,792)  $39,894   $(11,112,604)  $(245,383)
Depreciation and amortization   515,828    526,035    1,565,484    1,580,173 
Stock-based compensation   4,277,241    1,008,007    11,476,662    2,612,198 
Acquisition expense           22,318     
Non-GAAP net income (loss)   1,326,277    1,573,936    1,951,860    3,946,988 
                     
Non-GAAP net income (loss) per share                    
Diluted  $0.07   $0.09   $0.11   $0.22 
Weighted average shares outstanding:                    
Diluted   18,088,406    18,198,412    18,169,885    17,555,593 

 

 

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