As
filed with the Securities and Exchange Commission on January 30,
2009
|
Registration
No. 333 -155280
|
Nevada
(State
or other jurisdiction of
incorporation
or organization)
|
7389
(Primary
Standard Industrial
Classification
Code Number)
|
26-1265381
(I.R.S.
Employer
Identification
No.)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Title
of each class of
securities
to be
registered
|
Number
of
Shares
to be
registered
|
Proposed Maximum Offering
Price (1)(2)
|
Proposed
maximum
aggregate
offering
price
|
Amount
of
registration
fee
|
|||||||||||||
Common
Stock, $0.001 par value
|
2,230,000
|
(3)
|
$
|
4.00
|
$
|
8,920,000
|
$
|
350.56
|
(1)
|
Estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(a) promulgated under the Securities Act of 1933, as amended,
based on the price at which the common stock will initially be
sold.
|
|
(2)
|
The
selling stockholders will offer their shares at $4.00 per share. There is
currently no established trading market in our common
stock. The price of $4.00 is a fixed price at which the selling
stockholders may sell their shares until the Company’s common stock is
quoted on the OTC Bulletin Board at which time
the shares may be sold at prevailing market prices or privately negotiated
prices. There can be no assurance that a market maker will agree to file
the necessary documents with FINRA, which operates the OTC Electronic
Bulletin Board, nor can there be any assurance that such an application
for quotation will be approved. We will not receive proceeds
from the sale of shares from the selling
stockholders.
|
|
(3)
|
Represents
shares of common stock issuable upon conversion of Series A Preferred
Stock and exercise of Series A
Warrants.
|
Page
|
|
Prospectus
Summary
|
5
|
Risk
Factors
|
7
|
Cautionary
Note Regarding Forward Looking Statements
|
18
|
Use
of Proceeds
|
18
|
Determination
of Offering Price
|
18
|
Selling
Stockholders
|
19
|
Plan
of Distribution
|
23
|
Description
of Securities
|
25
|
Business
|
28
|
Description
of Property
|
31
|
Legal
Proceedings
|
31
|
Market
Price of and Dividends on Common Equity and Related Stockholder
Matters
|
31
|
Management's
Discussion and Analysis or Plan of Operation
|
32
|
Directors
and Executive Officers
|
34
|
Executive
Compensation
|
36
|
Security
Ownership of Certain Beneficial Owners and Management
|
37
|
Market
for Common Equity and Related Stockholder Matters
|
39
|
Transactions
with Related Persons, Promoters and Certain Control
Persons
|
39
|
Legal
Matters
|
40
|
Experts
|
40
|
Where
You Can Find More Information
|
40
|
Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities
|
40
|
Index
to Consolidated Financial Statements
|
F-1
|
Other
Expenses of Issuance and Distribution
|
II-1
|
Indemnification
of Officers and Directors
|
II-1
|
Recent
Sale of Unregistered Securities
|
II-1
|
Exhibits
|
II-2
|
Undertakings
|
II-2
|
Signatures
|
II-4
|
Total
shares of common stock outstanding
|
|
12,126,209
as of January 30, 2009 (of which 6,695,709 shares currently were
held by non-affiliates).
|
Common
stock being offered for sale by selling stockholders
|
|
Up
to 2,230,000 shares which may be issued to the selling stockholders upon
their conversion of our Series A Preferred Stock and exercise of the
Series A Warrants. All of the shares offered by this prospectus
are being sold by the selling stockholders. The shares offered by the
selling stockholders pursuant to this prospectus represent 18.39 % of the
total number of shares of common stock outstanding or 33.30 % of the
number of non-affiliated shares of common stock
outstanding. The selling stockholders will offer their
shares at $4.00 per share until the Company’s shares are quoted on the OTC
Bulletin Board and, assuming we secure this qualification, thereafter at
prevailing market prices or privately negotiated
prices.
|
Risk
factors
|
|
The
shares involve a high degree of risk. Investors should carefully consider
the information set forth under “RISK FACTORS” beginning on page
7.
|
Use
of proceeds
|
|
We
will not receive any proceeds from the sale of our common stock offered
through this prospectus by the selling stockholders. However,
we will receive the sale price of any common stock we sell to the selling
stockholder upon exercise of the warrants. We expect to use the
proceeds received from the exercise of the warrants, if any, for general
working capital purposes. All proceeds from the sale of our
common stock sold under this Prospectus will go to the selling
stockholders.
|
Trading
symbol for our common stock
|
|
OPRX
|
•
|
our
ability to hire and retain qualified authors, journalists and independent
writers;
|
|
•
|
our
ability to license quality content from third parties; and promote
abundant health savings and support offers
|
|
•
|
our
ability to monitor and respond to increases and decreases in user interest
in specific medications.
|
•
|
Our
public portals face competition from numerous other companies, both in
attracting users and in generating revenue from advertisers and sponsors.
We compete for users with online services and Web sites that provide
savings on medications and healthcare products, including both commercial
sites and not-for-profit sites. We compete for advertisers and sponsors
with: health-related web sites; general purpose consumer web sites that
offer specialized health sub-channels; other high-traffic web sites that
include both healthcare-related and non-healthcare-related content and
services; search engines that provide specialized health search; and
advertising networks that aggregate traffic from multiple
sites.
|
|
•
|
Our
private portals compete with: providers of healthcare decision-support
tools and online health management applications; wellness and disease
management vendors; and health information services and health management
offerings of healthcare benefits companies and their
affiliates.
|
|
•
|
Our
Publishing and Other Services segment’s products and services compete with
numerous other offline publications, some of which have better access to
traditional distribution channels than we have, and also compete with
online information sources.
|
•
|
the
timing of FDA approval for new products or for new approved uses for
existing products;
|
|
•
|
the
timing of FDA approval of generic products that compete with existing
brand name products;
|
|
•
|
the
timing of withdrawals of products from the market;
|
|
•
|
seasonal
factors relating to the prevalence of specific health conditions and other
seasonal factors that may affect the timing of promotional campaigns for
specific products; and
|
|
•
|
the
scheduling of conferences for physicians and other healthcare
professionals.
|
•
|
difficulties
in staffing and managing operations outside of the United
States;
|
|
•
|
fluctuations
in currency exchange rates;
|
|
•
|
burdens
of complying with a wide variety of legal, regulatory and market
requirements;
|
•
|
variability
of economic and political conditions;
|
|
•
|
tariffs
or other trade barriers;
|
|
•
|
costs
of providing and marketing products and services in different
markets;
|
|
•
|
potentially
adverse tax consequences, including restrictions on repatriation of
earnings; and
|
|
•
|
difficulties
in protecting intellectual
property.
|
•
|
government
regulation or private initiatives that affect the manner in which
healthcare providers interact with patients, payers or other healthcare
industry participants, including changes in pricing or means of delivery
of healthcare products and services;
|
|
•
|
consolidation
of healthcare industry participants;
|
|
•
|
reductions
in governmental funding for healthcare; and
|
|
•
|
adverse
changes in business or economic conditions affecting healthcare payers or
providers, pharmaceutical, biotechnology or medical device companies or
other healthcare industry
participants.
|
•
|
changes
in the design of health insurance plans;
|
|
•
|
a
decrease in the number of new drugs or medical devices coming to
market; and
|
|
•
|
decreases
in marketing expenditures by pharmaceutical or medical device companies,
including as a result of governmental regulation or private initiatives
that discourage or prohibit advertising or sponsorship activities by
pharmaceutical or medical device
companies.
|
•
|
damage
from fire, power loss and other natural disasters;
|
|
|
||
•
|
communications
failures;
|
|
•
|
software
and hardware errors, failures and crashes;
|
|
•
|
security
breaches, computer viruses and similar disruptive
problems; and
|
|
•
|
other
potential service interruptions.
|
•
|
Regulation of Drug and Medical
Device Advertising and Promotion. Our website provides
services involving advertising and promotion of prescription and
over-the-counter drugs and medical devices. If the FDA or the FTC finds
that any information on OptimizeRx.com violates FDA or
FTC regulations, they may take regulatory or judicial action against us
and/or the advertiser or sponsor of that information. State attorneys
general may also take similar action based on their state’s consumer
protection statutes. Any increase or change in regulation of drug or
medical device advertising and promotion could make it more difficult for
us to contract for sponsorships and advertising. Members of Congress,
physician groups and others have criticized the FDA’s current policies,
and have called for restrictions on advertising of prescription drugs to
consumers and increased FDA enforcement. We cannot predict what actions
the FDA or industry participants may take in response to these criticisms.
It is also possible that new laws would be enacted that impose
restrictions on such advertising. Our advertising and sponsorship revenue
could be materially reduced by additional restrictions on the advertising
of prescription drugs and medical devices to consumers, whether imposed by
law or regulation or required under policies adopted by industry
members.
|
|
•
|
Anti-kickback Laws.
There are federal and state laws that govern patient
referrals, physician financial relationships and inducements to healthcare
providers and patients. The federal healthcare programs’ anti-kickback law
prohibits any person or entity from offering, paying, soliciting or
receiving anything of value, directly or indirectly, for the referral of
patients covered by Medicare, Medicaid and other federal healthcare
programs or the leasing, purchasing, ordering or arranging for or
recommending the lease, purchase or order of any item, good, facility or
service covered by these programs. Many states also have similar
anti-kickback laws that are not necessarily limited to items or services
for which payment is made by a federal healthcare program. These laws are
applicable to manufacturers and distributors and, therefore, may restrict
how we and some of our customers market products to healthcare providers,
including e-details. Any determination by a state or federal regulatory
agency that any of our practices violate any of these laws could subject
us to civil or criminal penalties and require us to change or terminate
some portions of our business and could have an adverse effect on our
business. Even an unsuccessful challenge by regulatory authorities of our
practices could result in adverse publicity and be costly for us to
respond to.
|
|
•
|
Medical Professional
Regulation. The practice of most healthcare professions
requires licensing under applicable state law. In addition, the laws in
some states prohibit business entities from practicing medicine. If a
state determines that some portion of our business violates these laws, it
may seek to have us discontinue those portions or subject us to penalties
or licensure requirements. Any determination that we are a healthcare
provider and have acted improperly as a healthcare provider may result in
liability to us.
|
·
|
the
development of a future market for our
products;
|
·
|
changes
in market valuations of similar
companies;
|
·
|
announcement
by us or our competitors of significant contracts, acquisitions, strategic
partnerships, joint ventures or capital
commitments;
|
·
|
additions
or departures of key personnel; and
|
·
|
fluctuations
in stock market price and volume.
|
·
|
the
issuance of new equity securities;
|
|
·
|
changes
in interest rates;
|
|
·
|
competitive
developments, including announcements by competitors of new products or
services or significant contracts, acquisitions, strategic partnerships,
joint ventures or capital commitments;
|
|
·
|
variations
in quarterly operating results;
|
|
·
|
change
in financial estimates by securities analysts;
|
|
·
|
the
depth and liquidity of the market for our common stock;
|
|
·
|
investor
perceptions of our company and the technologies industries generally;
and
|
|
·
|
general
economic and other national
conditions.
|
·
|
investors
may have difficulty buying and selling or obtaining market
quotations;
|
|
·
|
market
visibility for our common stock may be limited; and
|
|
·
|
lack
of visibility for our common stock may have a depressive effect on the
market for our common stock.
|
Name
of Selling Stockholder
|
Total
Shares
Held
Including
Shares
Issuable
Upon Full
Conversion
and/or
exercise
(3)
|
Total
Percentage
of
Outstanding
Shares
Assuming
Full
Conversion
and/or
exercise
(3)
|
Shares of
Common
Stock
Included in
Prospectus (3)
|
Beneficial
Ownership
Before
Offering
(1)(2)(3)
|
Percentage
of Common
Stock
Before
Offering
(1)(3)
|
Beneficial
Ownership
After the
Offering
Including
Shares
Issuable
Upon Full
Conversion
and/or
exercise
(4)
|
Percentage
of Common
Stock
Owned After
Offering
Assuming
Full
Conversion
and/or
exercise
(4)
|
|||||||
Vicis
Capital Master Fund (5)
|
9,500,000
|
43.93
%
|
2,230,000
|
605,098
|
4.99%
|
7,270,000
|
33.62
%
|
·
|
35
shares of Series A Preferred Stock; and
|
|
|
·
|
Series
A Common Stock Purchase Warrants to purchase 6,000,000 shares of common
stock at $2.00 per share for a period of five
years.
|
·
|
Indebtedness
to the extent existing on September 8, 2008 or any replacement
indebtedness to existing indebtedness;
|
|
·
|
Indebtedness
which may be incurred or guaranteed by us in an aggregate principal amount
not to exceed $500,000;
|
|
·
|
the
endorsement of instruments for the purpose of deposit or collection in the
ordinary course of business;
|
|
·
|
Indebtedness
relating to our contingent obligations and our subsidiaries under
guaranties in the ordinary course of business of the obligations of
suppliers, customers, and licensees of the company and our
subsidiaries;
|
|
·
|
Indebtedness
relating to loans from the company to our subsidiaries;
|
|
·
|
Indebtedness
relating to capital leases in an amount not to exceed
$500,000;
|
|
·
|
accounts
or notes payable arising out of the purchase of merchandise, supplies,
equipment, software, computer programs or services in the ordinary course
of business;
|
|
·
|
Common
Stock issued or issuable to financial institutions, or lessors, pursuant
to a commercial credit arrangement, equipment financing transaction,
accounts receivable factoring, or a similar
transaction;
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
·
|
purchases
by a broker-dealer as principal and resales by the broker-dealer for its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
privately
negotiated transactions;
|
·
|
to
cover short sales made after the date that the registration statement of
which this prospectus is a part is declared effective by the
Commission;
|
·
|
broker-dealers
may agree with the selling security holders to sell a specified number of
such shares at a stipulated price per
share;
|
·
|
a
combination of any of these methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
·
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
|
·
|
the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
·
|
obtain
financial information and investment experience objectives of the person;
and
|
|
·
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
·
|
Indebtedness
to the extent existing on September 8, 2008 or any replacement
indebtedness to existing indebtedness;
|
|
·
|
Indebtedness
which may be incurred or guaranteed by us in an aggregate principal amount
not to exceed $500,000;
|
|
·
|
the
endorsement of instruments for the purpose of deposit or collection in the
ordinary course of business;
|
|
·
|
Indebtedness
relating to our contingent obligations and our subsidiaries under
guaranties in the ordinary course of business of the obligations of
suppliers, customers, and licensees of the company and our
subsidiaries;
|
|
·
|
Indebtedness
relating to loans from the company to our subsidiaries;
|
|
·
|
Indebtedness
relating to capital leases in an amount not to exceed
$500,000;
|
|
·
|
accounts
or notes payable arising out of the purchase of merchandise, supplies,
equipment, software, computer programs or services in the ordinary course
of business;
|
|
·
|
Common
Stock issued or issuable to financial institutions, or lessors, pursuant
to a commercial credit arrangement, equipment financing transaction,
accounts receivable factoring, or a similar
transaction;
|
o
|
OPTIMIZERx.com-
unique healthcare website for patients to centrally review and participate
in prescription and healthcare savings/support
programs.
|
o
|
OFFERx
- turn-key platform to allow manufactures to create, promote and fulfill
new patient offer programs in over 64K pharmacies through our end to end
system.
|
o
|
ADHERxE
- turn-key platform that allows manufacturers to engage and monitor
patients each month in exchange for activation of their monthly co-pay
coupons.
|
App
Number/
Filing
Date
|
Brief
Summary
(Products
Covered)
|
Status
|
|
S.N.
11/528,292
September
27, 2006
|
System
for providing patient savings and promoting health care product
sales
|
Patent
application
pending.
|
|
Common
Stock
|
|||||||
High
|
Low
|
|||||||
First
Quarter
|
$ | 7.00 | $ | 4.00 | ||||
Second
Quarter
|
$ | 15.00 | $ | 3.90 | ||||
Third
Quarter
|
$ | 4.20 | $ | 3.90 | ||||
Fourth
Quarter
|
$ | 4.30 | $ | 1.56 | ||||
|
Common
Stock
|
|||||||
Fiscal
Year 2007
|
High
|
Low
|
||||||
First
Quarter
|
$ | 590.00 | $ | 380.00 | ||||
Second
Quarter
|
$ | 550.00 | $ | 360.00 | ||||
Third
Quarter
|
$ | 490.00 | $ | 64.00 | ||||
Fourth
Quarter
|
$ | 72.00 | $ | 3.00 | ||||
|
Common
Stock
|
|||||||
Fiscal
Year 2006
|
High
|
Low
|
||||||
First
Quarter
|
$ | 558.33 | $ | 83.33 | ||||
Second
Quarter
|
$ | 466.67 | $ | 283.33 | ||||
Third
Quarter
|
$ | 658.33 | $ | 313.33 | ||||
Fourth
Quarter
|
$ | 600.00 | $ | 313.33 |
·
|
Our
ability to attract and retain management, and to integrate and maintain
technical information and management information
systems;
|
·
|
Our
ability to raise capital when needed and on acceptable terms and
conditions;
|
·
|
The
intensity of competition; and
|
·
|
General
economic conditions.
|
·
|
Changes
in government regulations
|
·
|
The
online patient savings portal OPTIMIZERx.com and our network
affiliates
|
·
|
OFFERx
to develop, promote and fulfill new offers from pharmaceutical and
healthcare manufactures
|
·
|
ADHERxE
to allow manufacturers to re-engage their customers per activation of new
savings each month
|
Estimated Monthly Expenses: |
Normal Expected
Range
|
Staff salaries |
$25,000 -
35,000
|
Independent Sales Representatives |
$10,000 -
15,000
|
IT and Web/Product Development |
$10,000 -
15,000
|
Rent and other general expenses |
$5,000 -
10,000
|
Travel and other related expenses |
$5,000 -
10,000
|
Other expenses |
$2,000
- 5,000
|
Marketing & Advertising |
(Variable: See
comments below)
|
Name
of Individual
|
Age
|
Position
with company and subsidiaries
|
David
A. Harrell
|
42
|
Chief
Executive Officer, President and Director
|
Thomas
E. Majerowicz
|
57
|
Secretary
and Director
|
Terence
J. Hamilton
|
43
|
Director
|
Name
and Principal Position
|
Year
|
Salary
$
|
Bonus
$
|
Stock
Awards
$
|
Option
Awards $
|
Total
$
|
||||||||||||||||
David
Harrell
|
2007
|
$
|
144,000
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
144,000
|
|||||||||||
President
& Chief Executive Officer
|
2006
|
$
|
111,000
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
111,000
|
|||||||||||
|
2008
|
$
|
144,000
|
$
|
-0-
|
$
|
-0-
|
$
|
100,000
|
$
|
244,000
|
|||||||||||
James
Vandeberg
|
2007
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
|||||||||||
Former
Chief Executive Officer of RFID Ltd.
|
2006
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
Name
of Beneficial Owner
|
Common
Stock
Beneficially
Owned (1)
|
Percentage
of
Common
Stock (2)
|
|||
Richard
J. Kraniak Roth IRA (3)
|
1,250,000
|
10.31%
|
|||
Cypress
Trust (4)
|
1,150,000
|
9.48%
|
|||
David
Harrell (5)
|
3,612,250
|
29.55%
|
|||
Terrance
Hamilton (6)
|
595,500
|
4.85%
|
|||
Thomas
Majerowicz (7)
|
242,750
|
2.00%
|
|||
Vicis
Capital Master Fund (8)
|
9,500,000
|
43.93%
(9)
|
|||
Cypress
Trust i/t/f Jillene Pinella
|
1,150,000
|
9.48%
|
|||
All
officers and directors as a group (3 persons)
|
4,450,500
|
36.7%
|
(1)
|
Includes
stock option grants made to officers, directors, employees and/or
consultants under the 2008 Company Stock Option Plan. All
options listed in this table were granted under the 2008 Stock Option
Plan.
|
|
(2)
|
Applicable
percentage ownership is based on 12,126,209 shares of common stock
outstanding as of January 30, 2009 , together with securities
exercisable or convertible into shares of common stock within 60 days of
January 30, 2009 for each stockholder. Shares of common stock that
are currently exercisable or exercisable within 60 days of January 30,
2009 are deemed to be beneficially owned by the person holding such
securities for the purpose of computing the percentage of ownership of
such person, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person.
|
|
(3)
|
Richard
J. Kraniak has voting and dispositive control over the shares held by
Richard J. Kraniak Roth IRA, which is located at 101 West Long Lake,
Bloomfield Hills, Michigan 48304.
|
|
(4)
|
Linwood
C. Meehan III has voting and dispositive control over the shares held by
Cypress Trust, which is located at 13750 W. Colonial Dr., Ste. 250-317,
Winter Garden, Florida 34787.
|
|
(5)
|
Includes
options to purchase 100,000 shares of common stock at a price of $1.00 per
share.
|
|
(6)
|
Includes
options to purchase 150,000 shares of common stock at a price of $1.00 per
share.
|
|
(7)
|
Includes
options to purchase 20,000 shares of common stock at a price of $1.00 per
share.
|
|
(8)
|
Chris
Phillips holds investment and dispositive power of the shares held by
Vicis Capital Master Fund. Shares beneficially
owned represent an aggregate of 9,500,000 shares of Common Stock,
consisting of (i) 3,500,000 shares issuable upon the conversion of the
Series A Preferred Stock; and (ii) 6,000,000 shares issuable upon the
exercise of the Series A Warrants. The selling stockholder has
informed us that it is not a broker-dealer or affiliate of a
broker-dealer.
|
|
(9)
|
Percentage
of outstanding shares assumes full conversion and/or exercise of the
Series A Preferred Stock and Series A Warrants,
respectively. The selling stockholders purchased the securities
which are convertible into the shares being offered in this prospectus in
our September 8, 2008 private placement. The selling
stockholders have contractually agreed to restrict their ability to
convert their shares of Series A Preferred Stock into shares of common
stock and to exercise their warrants to purchase shares of common stock
such that the number of shares of common stock held by them in the
aggregate and their affiliates after such conversion or exercise does not
exceed 4.99% of the then issued and outstanding shares of common stock as
determined in accordance with Section 13(d) of the Exchange Act.
Accordingly, the number of shares of common stock set forth in the table
for the selling stockholders exceeds the number of shares of common stock
that the selling stockholders could own beneficially at any given time
through their ownership of the Series A Preferred Stock and the warrants.
In that regard, the beneficial ownership of the common stock by the
selling stockholder set forth in the table is not determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended.
|
Name
|
Qty
|
Avg
Exercise
Price
$
|
Notes
|
||||||
Options
Outstanding under 2008 Company Stock Option Plan
|
|||||||||
David
Harrell
|
100,000
|
$
|
1.00
|
President
and CEO
|
|||||
Terry
Hamilton
|
150,000
|
$
|
1.00
|
Sr.
Vice President/Director
|
|||||
Vernon
Hartman
|
50,000
|
$
|
1.00
|
Vice
President
|
|||||
Andrew
Dahl
|
20,000
|
$
|
1.00
|
Business
Advisor
|
|||||
Jay
Pinney, MD
|
25,000
|
$
|
1.00
|
Medical
Advisor
|
|||||
Thomas
Majerowicz
|
20,000
|
$
|
1.00
|
Director
and Legal Advisor
|
|||||
|
|||||||||
Total
Issued
|
365,000
|
$
|
1.00
|
||||||
|
|||||||||
Total
Remaining Stock Options for future use:
|
625,000
|
|
|||||||
Total
Remaining Stock Grants:
|
500,000
|
||||||||
Total
Stock Options and Stock Grants
|
1,490,000
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Balance
Sheets as of December 31, 2007 and 2006
|
F-2
|
Statements of Operations for
the Years Ended December 31, 2007 and 2006 and for the Period from
January 31, 2006
(inception) to December 31, 2007
|
F-3
|
Statement
of Stockholders’ Equity (Deficit) as of December 31, 2007
|
F-4
|
Statements of Cash Flows for
the Years Ended December 31, 2007 and 2006 and for the Period from
Inception January
31, 2006 (inception) to December 31, 2007
|
F-5
|
Notes
to Financial Statements
|
F-6
- F-11
|
2007
|
2006
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$
|
135,429
|
$
|
14,643
|
||||
Prepaid
rent
|
2,000
|
-0-
|
||||||
Total
Current Assets
|
137,429
|
14,643
|
||||||
Property
and Equipment, net
|
5,972
|
735
|
||||||
Website
Development Costs, net
|
151,564
|
34,044
|
||||||
TOTAL
ASSETS
|
$
|
294,965
|
$
|
49,422
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
$
|
43,216
|
$
|
-0-
|
||||
Accrued
expenses
|
18,926
|
5,133
|
||||||
Notes
payable – related parties
|
277,750
|
-0-
|
||||||
Total
Current Liabilities
|
339,892
|
5,133
|
||||||
Long
- term Debt
|
||||||||
Notes
payable – related party
|
50,000
|
4,000
|
||||||
Total
Long - term Debt
|
50,000
|
4,000
|
||||||
TOTAL
LIABILITIES
|
389,892
|
9,132
|
||||||
STOCKHOLDERS’
EQUITY (DEFICIT)
|
|
|||||||
Common
stock, par $.001, 40,000,000 shares authorized, 10,300,000 shares issued
and outstanding
|
10,300
|
|
-0-
|
|||||
Paid
in capital
|
289,700
|
-0-
|
||||||
Equity
(deficit) accumulated during the development stage
|
(394,927
|
)
|
40,289
|
|||||
Total
Stockholders’ Equity (Deficit)
|
(94,927
|
)
|
40,289
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
$
|
294,965
|
$
|
49,422
|
2007
|
2006
|
Period
from
January
31, 2006
(inception)
to
December
31, 2007
|
||||||||||
Gross
Revenues
|
$
|
100,318
|
$
|
-0-
|
$
|
100,318
|
||||||
Operating
Expenses
|
456,259
|
184,311
|
640,570
|
|||||||||
Net
Operating Loss
|
(355,941
|
)
|
(184,311
|
)
|
(540,252
|
)
|
||||||
Other
Expenses
|
(5,525
|
)
|
-0-
|
(5,525
|
)
|
|||||||
Net
Loss Before Income Taxes
|
(361,466
|
)
|
(184,311
|
)
|
(545,777
|
)
|
||||||
Provision
for Income Taxes
|
-0-
|
-0-
|
-0-
|
|||||||||
Net
Loss
|
$
|
(361,466
|
)
|
$
|
(184,311
|
)
|
$
|
(545,777
|
)
|
|||
Weighted
Average Number Of Shares Outstanding
|
2,071,233
|
-
|
-
|
|||||||||
Net
(Loss) Per Share
|
$
|
(0.17
|
)
|
-
|
-
|
Common
Stock
|
Additional
Paid
in
|
Equity
(Deficit) accumulated during the development
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
stage
|
Total
|
||||||||||||||||
Beginning
Balance, January 31, 2006
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||||||
Member
Contributions
|
224,600
|
224,600
|
||||||||||||||||||
Net
Loss for the Year Ended December 31, 2006
|
(184,311
|
)
|
(184,311
|
)
|
||||||||||||||||
Balance,
December 31, 2006
|
0
|
0
|
40,289
|
40,289
|
||||||||||||||||
Member
Contributions
|
180,000
|
180,000
|
||||||||||||||||||
Member
Distributions
|
(253,750
|
)
|
(253,750
|
)
|
||||||||||||||||
Issuance
of common stock to former LLC members
|
10,000,000
|
10,000
|
(10,000
|
)
|
0
|
|||||||||||||||
Issuance
of common stock, private offering
|
300,000
|
300
|
299,700
|
300,000
|
||||||||||||||||
Net
Loss for the Year Ended December 31, 2007
|
(361,466
|
)
|
(361,466
|
)
|
||||||||||||||||
Ending
Balance, December 31, 2007
|
10,300,000
|
$
|
10,300
|
$
|
289,700
|
$
|
(
394,927
|
)
|
$
|
(94,927
|
)
|
2007
|
2006
|
Period
from
January
31, 2006
(inception)
to
December
31, 2007
|
||||||||||
Cash
Flows from Operating Activities:
|
||||||||||||
Net
Loss
|
$
|
(361,466
|
)
|
$
|
(184,311
|
)
|
$
|
(545,777
|
)
|
|||
Adjustments
to Reconcile Net Loss to Net Cash Used in Operating
Activities:
|
||||||||||||
Depreciation
and amortization expense
|
2,824
|
39
|
2,863
|
|||||||||
Changes
in Assets and Liabilities
|
||||||||||||
(Increase)
in prepaid rent
|
(2,000
|
)
|
-0-
|
(2,000
|
)
|
|||||||
Increase
in accounts payable
|
43,216
|
-0-
|
43,216
|
|||||||||
Increase
in accrued expenses
|
13,793
|
5,133
|
18,926
|
|||||||||
Net
Cash Used in Operating Activities
|
(303,633
|
)
|
(179,139
|
)
|
(482,772
|
)
|
||||||
Cash
Flows from Investing Activities:
|
||||||||||||
Acquisitions
of property and equipment
|
(5,493
|
)
|
(774
|
)
|
(6,267
|
)
|
||||||
Website
site development costs
|
(120,088
|
)
|
(34,044
|
)
|
(154,132
|
)
|
||||||
Net
Cash Used in Investing Activities
|
(125,581
|
)
|
(34,818
|
)
|
(160,399
|
)
|
||||||
Cash
Flows from Financing Activities:
|
||||||||||||
Proceeds
from issuance of notes payable
|
70,000
|
4,000
|
74,000
|
|||||||||
Member
contributions
|
180,000
|
224,600
|
404,600
|
|||||||||
Sale
of common stock
|
300,000
|
-0-
|
300,000
|
|||||||||
Net
Cash Provided by Financing Activities
|
550,000
|
228,600
|
778,600
|
|||||||||
Net
Increase in Cash and Cash Equivalents
|
120,786
|
14,643
|
135,429
|
|||||||||
Cash
and Cash Equivalents – Beginning
|
14,643
|
-0-
|
-0-
|
|||||||||
Cash
and Cash Equivalents – Ending
|
$
|
135,429
|
$
|
14,643
|
$
|
135,429
|
||||||
Supplemental
Cash Flow Information:
|
||||||||||||
Cash
Paid for Interest
|
$
|
4,453
|
$
|
-0-
|
$
|
4,453
|
||||||
Cash
Paid for Income Taxes
|
$
|
-0-
|
$
|
-0-
|
$
|
-0-
|
||||||
Supplemental
Disclosure of Noncash Investing and Financing Activities:
|
||||||||||||
Distributions
paid through issuance of notes payable-related party
|
$
|
253,750
|
$
|
-0-
|
$
|
253,750
|
2007
|
2006
|
|||||||
Computer
Equipment
|
$
|
1,974
|
$
|
774
|
||||
Furniture
& Fixtures
|
4,293
|
0
|
||||||
Subtotal
|
6,267
|
774
|
||||||
Accumulated
Depreciation
|
(295
|
)
|
(39
|
)
|
||||
Property
and Equipment, Net
|
$
|
5,972
|
$
|
735
|
2007
|
2006
|
|||||||
Web
site costs
|
$
|
154,133
|
$
|
34,044
|
||||
Accumulated
Amortization
|
(2,569
|
)
|
0
|
|||||
Web
site development costs, Net
|
$
|
151,564
|
$
|
34,044
|
2007
|
2006
|
|||||||
Accrued
interest
|
$
|
1,072
|
$
|
0
|
||||
Accrued
expenses
|
10,354
|
1,383
|
||||||
Accrued
audit fees
|
7,500
|
3,750
|
||||||
Accrued
Expenses
|
$
|
18,926
|
$
|
5,133
|
2007
|
2006
|
|||||||
Note
Payable – Dante Panetta
|
$
|
50,000
|
$
|
0
|
||||
Note
Payable – David Harrell
|
24,000
|
4,000
|
||||||
Note
Payable – LLC members
|
253,750
|
0
|
||||||
Long-Term
Debt
|
$
|
327,750
|
$
|
4,000
|
December
31, 2008
|
$
|
30,000
|
||
December
31, 2009
|
12,500
|
|||
Total
Lease Obligation
|
$
|
42,500
|
2007
|
||||
Deferred
tax asset attributable to:
|
||||
$
|
68,000
|
|||
Valuation
allowance
|
(68,000
|
)
|
||
Net
deferred tax asset
|
$
|
-
|
2007
|
2006
|
|||||||
Interest
expense
|
$
|
(5,525
|
)
|
$
|
0
|
|||
Total
Other Expenses
|
$
|
(5,525
|
)
|
$
|
0
|
Balance
Sheets as of September 30, 2008 (unaudited) and December
31, 2007 (audited)
|
F-2
|
Statements
of Operations for the Nine Months Ended September
30, 2008 and 2007
and
for the Period from January
31, 2006 (inception) to September 30, 2008 (unaudited)
|
F-3
|
Statement of Stockholders’ Equity (Deficit) as of September 30, 2008 (unaudited) |
F-4
|
Statements
of Cash Flows for the Nine Months Ended September
30, 2008 and 2007
and
for the Period from January
31, 2006 (inception) to September 30, 2008 (unaudited)
|
F-5
|
Notes
to Financial Statements
|
F-6 -
F-10
|
September
30,
2008
|
December
31,
2007
|
|||||||
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 2,807,520 | $ | 135,429 | ||||
Prepaid
rent
|
0 | 2,000 | ||||||
Total
Current Assets
|
2,807,520 | 137,429 | ||||||
|
||||||||
Property
and Equipment, net
|
7,618 | 5,972 | ||||||
|
||||||||
Website
Development Costs, net
|
151,284 | 151,564 | ||||||
TOTAL
ASSETS
|
$ | 2,966,422 | $ | 294,965 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
$ | 11,303 | $ | 43,216 | ||||
Accrued
expenses
|
0 | 15,176 | ||||||
Notes
payable – related parties
|
0 | 277,750 | ||||||
Total
Current Liabilities
|
11,303 | 336,142 | ||||||
Long
- term Debt
|
||||||||
Notes
payable – related party
|
0 | 50,000 | ||||||
TOTAL
LIABILITIES
|
11,303 | 386,142 | ||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Common
stock, par $.001, 40,000,000 shares authorized, 16,650,000 shares issued
and outstanding
|
16,650 | 10,300 | ||||||
Series
A Convertible Preferred Stock, Par $.001, 1000 Shares
authorized 35 shares issued and outstanding
|
0 | 289,770 | ||||||
Paid
in capital
|
3,903,350 | (391,177 | ) | |||||
Equity
(deficit) accumulated during the development stage
|
(964,881 | ) | (91,177 | ) | ||||
Total
Stockholders’ Equity
|
2,955,119 | 294,965 | ||||||
|
||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 2,966,422 | $ | 135,429 |
Nine
Months
Ended
September
30,
2008
|
Nine
Months
Ended
September
30,
2007
|
Period
From
January
31, 2006
(inception)
To
September 30,
2008
|
||||||||||
Gross
Revenues
|
$ | 68,331 | $ | 7,475 | $ | 168,649 | ||||||
Operating
Expenses
|
638,285 | 184,406 | 1,128,005 | |||||||||
Net
Operating Loss
|
(569,954 | ) | (176,931 | ) | (959,356 | ) | ||||||
Other
Expenses
|
0 | 0 | (5,525 | ) | ||||||||
Net
Loss Before Income Taxes
|
(569,954 | ) | (176,931 | ) | (964,881 | ) | ||||||
Provision
for Income Taxes
|
0 | 0 | 0 | |||||||||
Net
Loss
|
$ | (569,954 | ) | $ | (176,931 | ) | $ | (964,881 | ) | |||
Weighted
Average Number Of Common Shares Outstanding
|
13,475,000 | |||||||||||
Net
(Loss) Per Share
|
$ | (0.04 | ) |
(Deficit)
|
||||||||||||||||||||||||||||
Common
Stock
|
Preferred
Stock
|
Additional
Paid
|
accumulated
during the
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
in
Capital
|
development
stage
|
Total
|
||||||||||||||||||||||
Balance,
January
1, 2007
|
0 | 0 | 0 | 0 | 40,289 | 40,289 | ||||||||||||||||||||||
Member Contributions | 180,000 | 180,000 | ||||||||||||||||||||||||||
Member Distributions | (253,750 | ) | (253,750 | ) | ||||||||||||||||||||||||
Issuance
of common
stock
to
former LLC members
|
10,000,000 | 10,000 | (10,000 | ) | 0 | |||||||||||||||||||||||
Issuance
of common
stock,
private
offering
|
300,000 | 300 | 299,700 | 300,000 | ||||||||||||||||||||||||
Net
Loss, December
31, 2007
|
(361,466 | ) | (361,466 | ) | ||||||||||||||||||||||||
Ending
Balance,
December
31, 2007
|
10,300,000 | $ | 10,300 | 289,700 | $ | (394,927 | ) | $ | (94,927 | ) | ||||||||||||||||||
Issuance
of common
stock,
private
offering
|
6,350,000 | 6,350 | 628,650 | 635,000 | ||||||||||||||||||||||||
Issuance
of Preferred
stock
|
35 | 0 | 2,985,000 | 2,985,000 | ||||||||||||||||||||||||
Net Loss for the nine months ended Sept 30, 2008 | (569,954 | ) | (569,954 | ) | ||||||||||||||||||||||||
Ending
Balance,
Sept
30, 2008
|
16,650,000 | $ | 16,650 | 35 | $ | 0 | $ | 3,903,350 | $ | (964,881 | ) | $ | (2,955,119 | ) |
Nine
Months
Ended
September
30,
2008
|
Nine
Months
Ended
September
30,
2007
|
Period
from
January
31, 2006(inception) to
September
30,
2008
|
||||||||||
Cash
Flows from Operating Activities:
|
||||||||||||
Net
Loss for the period
|
$ | (569,954 | ) | $ | (176,931 | ) | $ | (964,881 | ) | |||
Adjustments
to Reconcile Net Loss to Net Cash Used in Operating
Activities:
|
||||||||||||
Depreciation
and amortization expense
|
27,802 | 0 | 30,662 | |||||||||
Changes
in Assets and Liabilities
|
||||||||||||
Decrease
in prepaid rent
|
2,000 | 0 | 0 | |||||||||
Increase
in accounts payable
|
(30,912 | ) | 0 | 11,303 | ||||||||
Increase
(Decrease) in accrued expenses
|
(23,575 | ) | 0 | 7,572 | ||||||||
Net
Cash Used in Operating Activities
|
(594,639 | ) | (176,931 | ) | (922,916 | ) | ||||||
Cash
Flows from Investing Activities:
|
||||||||||||
Acquisitions
of property and equipment
|
(2,293 | ) | 0 | (8,560 | ) | |||||||
Website
site development costs
|
(26,874 | ) | (14,652 | ) | (181,008 | ) | ||||||
Net
Cash Used in Investing Activities
|
(29,167 | ) | (14,652 | ) | (189,568 | ) | ||||||
Cash
Flows from Financing Activities:
|
||||||||||||
Proceeds
(Payments) on Notes Payable
|
(324,094 | ) | 129,300 | 0 | ||||||||
Sale
of Common Stock
|
6,350 | 0 | 16,650 | |||||||||
Issuance
of Preferred Stock
|
0 | 0 | 0 | |||||||||
Paid
in Capital
|
3,613,640 | 71,519 | 3,903,350 | |||||||||
Net
Cash Provided by Financing Activities
|
3,295,896 | 200,819 | 3,920,000 | |||||||||
Net
Increase in Cash and Cash Equivalents
|
2,672,090 | 9,236 | 2,807,516 | |||||||||
Cash
and Cash Equivalents – Beginning
|
135,430 | 14,643 | -0- | |||||||||
Cash
and Cash Equivalents – Ending
|
$ | 2,807,520 | $ | 23,879 | $ | 2,807,520 | ||||||
Supplemental
Cash Flow Information:
|
||||||||||||
Cash
Paid for Interest
|
$ | 1,072 | $ | 0 | $ | 5,525 | ||||||
Cash
Paid for Income Taxes
|
$ | 0 | $ | 0 | $ | -0- | ||||||
Supplemental
Disclosure of Noncash Investing and Financing Activities:
|
||||||||||||
Distributions
paid through issuance of notes payable-related party
|
$ | 0 | $ | 0 | $ | 253,750 |
Computer
Equipment
|
$ | 4,267 | |||
Furniture
& Fixtures
|
4,293 | ||||
Subtotal
|
8,560 | ||||
Accumulated
Depreciation
|
(942 | ) | |||
Property
and Equipment, Net
|
$ | 7,618 |
Website
Costs
|
$ | 181,008 | |||
Accumulated
Amortization
|
(29,724 | ) | |||
Website
Development Costs, Net
|
$ | 151,284 |
September
30, 2009
|
$ | 20,000 |
September
30, 2008
|
||||
Deferred
tax asset attributable to:
|
||||
Net
operating loss carryover
|
$ | 193,784 | ||
Valuation
allowance
|
(193,784 | ) | ||
Net
deferred tax asset
|
$ | - |
Commission
registration fee
|
$
|
262.92
|
||
Legal
fees and expenses
|
$
|
65,000.00
|
||
Accounting
fees and expenses
|
$
|
15,000.00
|
||
Miscellaneous
expenses
|
$
|
5,000.00
|
||
Total
|
$
|
80,262.92
|
3.1
|
Articles
of Incorporation of OptimizeRx Corporation (the
“Company”)*.
|
3.2
|
Amended
and Restated Bylaws of the Company*.
|
4.1
|
Certificate
of Designation, filed on September 5, 2008, with the Secretary of State of
the State of Nevada by the Company*.
|
5.1
|
Opinion
of Sichenzia Ross Friedman Ference LLP.
|
10.1
|
Agreement
Concerning the Exchange of Securities, dated on April 14, 2008 by and
among RFID, Ltd., OptimizeRx Corporation and the Security Holders of
OptimizeRx Corporation*.
|
10.2
|
Securities
Purchase Agreement, dated September 8, 2008, by and between the Company
and Vicis Capital Master Fund (“Vicis”)*.
|
10.3
|
Form
of Series A Warrant*.
|
10.4
|
Registration
Rights Agreement, dated September 8, 2008, by and between the Company and
Vicis*.
|
10.5
|
Security
Agreement, dated September 8, 2008, by and between the Company and
Vicis*.
|
10.6
|
Guaranty
Agreement, dated September 8, 2008, by and between the Company and
Vicis*.
|
10.7
|
Guarantor
Security Agreement, dated September 8, 2008, by and between the Company
and Vicis*.
|
10.8
|
Form
of Partnership Agreement between the Company and Dendrite International,
Inc. d/b/a/ Cegedim Dendrite, as entered into on June 24,
2008*.
|
10.9
|
Letter
of Intent between the Company and Sudler & Hennessy, dated September
30, 2008*.
|
21.1
|
List
of Subsidiaries*
|
23.1
|
Consent
of Auditors (as filed herein).
|
23.2
|
Consent
of Sichenzia Ross Friedman Ference LLP (contained in Exhibit
5.1).
|
99.1
|
Form
of Common Stock Certificate*.
|
OPTIMIZERX
CORPORATION
|
|||
By:
|
/s/ David A. Harrell
|
||
David
A. Harrell.
|
|||
Chief
Executive Officer and Director
(Principal
Executive Officer, Principal Financial Officer and
Principal
Accounting Officer)
|
|||
Signature
|
Title
|
Date
|
||
/s/
David A.
Harrell
|
Chief
Executive Officer and Director
|
January
30, 2009
|
||
David
A. Harrell
|
(Principal
Executive Officer,
Principal
Financial Officer and
Principal
Accounting Officer)
|
|||
/s/
Terence J.
Hamilton
|
Director
|
January
30, 2009
|
||
Terence
J. Hamilton
|
||||
/s/
Thomas E.
Majerowicz
|
Director
|
January
30, 2009
|
||
Thomas
E. Majerowicz
|
RE:
|
OptimizeRx
Corporation
|
Form
S-1/A-2 Registration Statement (File No. 333
-155280)
|