UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02 Results of Operations and Financial Condition.
On August 14, 2023, OptimizeRx Corporation issued a press release announcing its financial results for the quarter ended June 30, 2023. 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 August 14, 2023 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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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: August 14, 2023 | By: | /s/ Edward Stelmakh | |
| Name: | Edward Stelmakh | ||
| Title: | Chief Financial Officer | ||
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Exhibit 99.1
OptimizeRx Reports Second Quarter 2023 Financial Results
- RWD.AI-enabled portion of the core business sees 186% YOY growth during the first half of 2023
- Non-core business is lagging
- Total revenue of $13.8 million
- GAAP net loss per share of $(0.24)
- Non-GAAP net loss per share of $(0.01)
ROCHESTER, Mich. – August 14, 2023 – 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 June 30, 2023. Quarterly comparisons are to the same year-ago period.
Financial Highlights
| ● | Revenue in the second quarter of 2023 decreased 1% to $13.8 million, as compared to $14.0 million in the same year ago period. |
| ● | Gross profit in the second quarter of 2023 decreased 13% year-over-year to $7.8 million, from $9.0 million during the second quarter of 2022. |
| ● | GAAP net loss totaled $(4.2) million or $(0.24) per basic and diluted shares outstanding in the second quarter, as compared to $(3.9) million or $(0.21) during the second quarter of 2022. |
| ● | Non-GAAP net loss in the second quarter totaled $(0.2) million or $(0.01) per fully diluted shares outstanding, as compared to $0.7 million or $0.04 per fully diluted shares outstanding during the second quarter of 2022 (see definition of this non-GAAP measure and reconciliation to GAAP, below). |
| ● | The Company repurchased 526,999 shares at an average price of $14.27 per share in the second quarter of 2023 for a total of $7.5 million. |
| ● | Cash, cash equivalents and short-term investments totaled $62.7 million as of June 30, 2023 as compared to $74.1 million as of December 31, 2022 |
Will Febbo, OptimizeRx CEO commented, “I am disappointed to report second quarter results fell below the internal expectations underlying our May strategic update. The primary impact was due to a revenue shortfall in certain non-core business lines as well as longer than expected MLR reviews that pushed revenue into the second half of the year. Moreover, we are still being affected by the macro headwinds we identified last year and expect this will persist through 2023, as we continue to pursue larger scale RWD.AI enterprise deals. Despite these events, there were several bright spots in the period which speak to our land and expand strategy including the securing of three additional AI contracts with existing clients. We will continue to build upon a strong base of customers as we serve all our top 20 pharma manufacturers in the marketplace.”
“Looking ahead, we strongly contend that the life sciences industry is only at the beginning of its digital shift with a full realization expected to occur in the next two to five years. We are optimizing our portfolio in order to concentrate our team and efforts on our RWD.AI-enabled healthcare technology platform which helps pharma acquire and onboard patients. This transformational offering is the most differentiated and growing part of our business, seeing year-over-year growth of 186%. As a result, we will deploy our resources to the areas with the overwhelming majority of our revenues and, in the second half of 2023, we will reduce our cash operating expense run rate going into 2024 by at least 10%. We expect the second half of 2023 to show positive momentum as it relates to our client enterprise deals, channel partner expansion and strategic initiatives in our core business.”
| Rolling Twelve Months Ended | ||||||||
| Key Performance Indicators (KPIs)* | June 30, 2023 | March 31, 2023 | ||||||
| Average revenue per top 20 pharmaceutical manufacturer | $ | 1,972,308 | $ | 1,993,755 | ||||
| Percent of top 20 pharmaceutical manufacturers that are customers | 90 | % | 90 | % | ||||
| Top 20 pharmaceutical manufacturers as percent of total net revenues | 58 | % | 58 | % | ||||
| Net revenue retention | 89 | % | 86 | % | ||||
| Revenue per averages full-time employee (FTE) | $ | 559,646 | $ | 605,113 | ||||
2023 Financial Outlook
Based on first half results, the Company is updating its full year financial outlook for 2023. Revenues are now expected to be in the mid-50 to low-60 million dollar range with a gross margin rate between 55% and 59%.
Conference Call
OptimizeRx management will host the presentation, followed by a question-and-answer period.
Date: Monday, August 14, 2023
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-888-886-7786
International dial-in number: 1-416-764-8658
Conference ID: 45665957
Call Me Link: https://emportal.ink/3YcIQBR
Webcast Link: https://viavid.webcasts.com/starthere.jsp?ei=1627364&tp_key=42698fc073
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 loss and non-GAAP net loss per diluted share or non-GAAP EPS, both of which are non-GAAP financial measures.
The Company defines non-GAAP net loss as GAAP net 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 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.
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.
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The Company’s non-GAAP net 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 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.
The table, “Reconciliation of GAAP to NON-GAAP Financial Measures,” included below, provides a reconciliation of non-GAAP net loss and non-GAAP EPS for the three and six months ended June 30, 2023 and 2022.
Definition of Key Performance Indicators*
Top 20 pharmaceutical manufacturers: We have updated the definition of “top 20 pharmaceutical manufacturers” in our key performance indicators to be based upon Fierce Pharma’s most updated list of “The top 20 pharma companies by 2022 revenue”. We previously used “The top 20 pharma companies by 2020 revenue”. As a result of this change, prior periods have been restated for comparative purposes.
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.
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, 2022, 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
Investor Relations Contact
Ashley Robinson
LifeSci Advisors, LLC
arr@lifesciadvisors.com
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OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| June 30, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 9,808,330 | $ | 18,208,685 | ||||
| Short-term investments | 52,931,831 | 55,931,821 | ||||||
| Accounts receivable, net | 18,281,133 | 22,155,301 | ||||||
| Prepaid expenses and other | 4,052,729 | 2,280,828 | ||||||
| Total current assets | 85,074,023 | 98,576,635 | ||||||
| Property and equipment, net | 140,968 | 137,448 | ||||||
| Other assets | ||||||||
| Goodwill | 22,673,820 | 22,673,820 | ||||||
| Technology assets, net | 8,366,375 | 7,702,895 | ||||||
| Patent rights, net | 1,831,839 | 1,940,178 | ||||||
| Right of use assets, net | 14,544 | 235,320 | ||||||
| Other intangible assets, net | 3,223,305 | 3,384,889 | ||||||
| Total other assets | 36,109,883 | 35,937,102 | ||||||
| TOTAL ASSETS | $ | 121,324,874 | $ | 134,651,185 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable – trade | $ | 817,779 | $ | 1,549,979 | ||||
| Accrued expenses | 1,503,477 | 2,601,246 | ||||||
| Revenue share payable | 2,722,127 | 3,990,440 | ||||||
| Current portion of lease liabilities | 14,545 | 89,902 | ||||||
| Deferred revenue | 451,787 | 164,309 | ||||||
| Total current liabilities | 5,509,715 | 8,395,876 | ||||||
| Non-current liabilities | ||||||||
| Lease liabilities, net of current portion | — | 144,532 | ||||||
| Total liabilities | 5,509,715 | 8,540,408 | ||||||
| Commitments and contingencies (See note 10) | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2023 or December 31, 2022 | — | — | ||||||
| Common stock, $0.001 par value, 166,666,667 shares authorized, 18,376,771 and 18,288,571 shares issued at June 30, 2023 and December 31, 2022, respectively | 18,377 | 18,289 | ||||||
| Treasury stock, $0.001 par value, 1,741,397 and 1,214,398 shares held at June 30, 2023 and December 31, 2022, respectively | (1,741 | ) | (1,214 | ) | ||||
| Additional paid-in-capital | 173,049,784 | 172,785,800 | ||||||
| Accumulated deficit | (57,251,261 | ) | (46,692,098 | ) | ||||
| Total stockholders’ equity | $ | 115,815,159 | $ | 126,110,777 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 121,324,874 | $ | 134,651,185 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net revenue | $ | 13,818,166 | $ | 13,978,665 | $ | 26,821,076 | $ | 27,710,195 | ||||||||
| Cost of revenues, exclusive of depreciation and amortization presented separately below | 5,993,145 | 4,988,716 | 11,562,766 | 10,618,574 | ||||||||||||
| Gross profit | 7,825,021 | 8,989,949 | 15,258,310 | 17,091,621 | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | 12,242,128 | 12,320,362 | 26,274,669 | 23,711,597 | ||||||||||||
| Depreciation, amortization and noncash lease expense | 464,761 | 578,117 | 928,695 | 1,049,656 | ||||||||||||
| Total operating expenses | 12,706,889 | 12,898,479 | 27,203,364 | 24,761,253 | ||||||||||||
| Loss from operations | (4,881,868 | ) | (3,908,530 | ) | (11,945,054 | ) | (7,669,632 | ) | ||||||||
| Other income | ||||||||||||||||
| Interest income | 720,419 | 23,816 | 1,385,891 | 23,820 | ||||||||||||
| Loss before provision for income taxes | (4,161,449 | ) | (3,884,714 | ) | (10,559,163 | ) | (7,645,812 | ) | ||||||||
| Income tax benefit | — | — | — | — | ||||||||||||
| Net loss | $ | (4,161,449 | ) | $ | (3,884,714 | ) | $ | (10,559,163 | ) | $ | (7,645,812 | ) | ||||
| Weighted average number of shares outstanding – basic | 16,992,100 | 18,122,500 | 17,043,793 | 18,000,958 | ||||||||||||
| Weighted average number of shares outstanding – diluted | 16,992,100 | 18,122,500 | 17,043,793 | 18,000,958 | ||||||||||||
| Loss per share – basic | $ | (0.24 | ) | $ | (0.21 | ) | $ | (0.62 | ) | $ | (0.42 | ) | ||||
| Loss per share – diluted | $ | (0.24 | ) | $ | (0.21 | ) | $ | (0.62 | ) | $ | (0.42 | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OPTIMIZERX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (10,559,163 | ) | $ | (7,645,812 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | 928,695 | 1,049,656 | ||||||
| Stock-based compensation | 7,883,626 | 7,199,421 | ||||||
| Increase in bad debt reserve | 238,748 | 98,727 | ||||||
| Changes in: | ||||||||
| Accounts receivable | 3,635,420 | 5,969,009 | ||||||
| Prepaid expenses and other assets | (1,771,899 | ) | 1,266,478 | |||||
| Accounts payable | (732,200 | ) | 64,232 | |||||
| Revenue share payable | (1,268,313 | ) | (2,001,379 | ) | ||||
| Accrued expenses and other liabilities | (1,096,881 | ) | (1,263,971 | ) | ||||
| Deferred revenue | 287,478 | (347,989 | ) | |||||
| NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (2,454,489 | ) | 4,388,372 | |||||
| CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (48,556 | ) | (41,335 | ) | ||||
| Purchases of held-to-maturity investments | (109,501,032 | ) | — | |||||
| Redemptions of held-to-maturity investments | 112,501,021 | — | ||||||
| EvinceMed acquisition | — | (2,000,000 | ) | |||||
| Acquisition of intangible assets, including intellectual property rights | (3,068 | ) | (145,257 | ) | ||||
| Capitalized software development costs | (1,274,150 | ) | — | |||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 1,674,215 | (2,186,592 | ) | |||||
| CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES: | ||||||||
| Cash paid for employee withholding taxes related to the vesting of restricted stock units | (243,361 | ) | — | |||||
| Repurchase of common stock | (7,522,426 | ) | (321,054 | ) | ||||
| Proceeds from exercise of stock options | 145,706 | 830,474 | ||||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (7,620,081 | ) | 509,420 | |||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (8,400,355 | ) | 2,711,200 | |||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 18,208,685 | 84,681,770 | ||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 9,808,330 | $ | 87,392,970 | ||||
| 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.
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OPTIMIZERX CORPORATION
RECONCILIATION of GAAP to NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
| Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net loss | $ | (4,161,449 | ) | $ | (3,884,714 | ) | $ | (10,559,163 | ) | $ | (7,645,812 | ) | ||||
| Depreciation, amortization and noncash lease expense | 464,761 | 578,117 | 928,695 | 1,049,656 | ||||||||||||
| Stock-based compensation | 3,503,123 | 4,025,323 | 7,883,626 | 7,199,421 | ||||||||||||
| Acquisition expense | — | 2,579 | — | 19,739 | ||||||||||||
| Non-GAAP net income (loss) | (193,565 | ) | 721,305 | (1,746,842 | ) | 623,004 | ||||||||||
| Non-GAAP net income (loss) per share | ||||||||||||||||
| Diluted | $ | (0.01 | ) | $ | 0.04 | $ | (0.10 | ) | $ | 0.03 | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Diluted | 16,992,100 | 18,122,500 | 17,043,793 | 18,000,958 | ||||||||||||
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