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 7, 2018

OptimizeRx Corporation
(Exact name of registrant as specified in its charter)

 

Nevada   000-53605   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.      ☐

  

 

 

 

 

 

SECTION 2 – Financial Information

 

Item 2.02Results of Operations and Financial Condition.

 

On August 7, 2018, we issued a press release announcing the results of operations for the quarter ended June 30, 2018. 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 7, 2018

  

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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  
   
/s/ Douglas Baker  
Douglas Baker  
Chief Financial Officer  
   
Date: August 8, 2018  

  

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Exhibit 99.1

 

 

OptimizeRx Reports Second Quarter 2018 Results; Net Revenue Up 78% to Record $5.1 Million, Driving $0.02 EPS

 

ROCHESTER, Mich., August 7, 2018 — OptimizeRx Corp. (OTCQB: OPRX), a leading global provider of digital health messaging for the pharmaceutical industry, reported results for the second quarter ended June 30, 2018. Quarterly comparisons are to the same year-ago quarter.

 

Financial Highlights

 

Net revenue increased 78% to a record $5.1 million.

 

Gross margin improved from 44.0% to 56.1%.

 

Operating expense as a percentage of net revenue reduced from 57% to 51%.

 

Net income of $281,000 or $0.02 per diluted share vs. a loss

 

Raised $9 million in private placement

 

Operational Highlights

 

Up-listed to the Nasdaq Capital Market

 

Signed new pharmaceutical manufacturer brands for distributing digital health messaging through OptimizeRx’s expanding network of EHR channel partners.

 

Partnered with Patient Connect to deliver real-time digital heath messaging at point-of-care across Europe and provide a broader solution set for global brands.

 

Financial Summary
Net revenue in the second quarter of 2018 increased 78% to a record $5.1 million versus $2.9 million in the same year-ago quarter. The increase was primarily due to growth in OptimizeRx’s two core products of financial and brand messaging, coupled with broader distribution through the company’s new channel partners. The launch of new pharmaceutical brands also contributed to the increase.

 

Gross margin improved to 56.1% in the second quarter of 2018 from 44.0% in the year-ago quarter. The improvement was due to favorable product mix and reduced revenue share cost. The company remains focused on improving margins, and maintains its gross margin target of at least 55% through the fourth quarter of 2018.

 

Operating expenses in the second quarter of 2018 were $2.6 million, up from $1.6 million in the same year-ago quarter. The increase was primarily due to additional expenses related to growth initiatives, including expanding the company’s executive and sales team. However, operating expense as a percentage of revenue decreased to 51% as compared to 57% in the same year-ago quarter.

 

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Net income for the second quarter of 2018 was $281,000 or $0.02 per diluted share, as compared to a net loss of $362,000 or $(0.04) per share in the year-ago quarter. Profitability was primarily due to the increase in revenue and decrease in operating expense as a percentage of revenue. The company expects to continue to be profitable on a quarterly basis, although one-time expenses related to growth initiatives may result in quarterly fluctuations in profitability.

 

Cash and cash equivalents totaled $12.0 million at June 30, 2018, as compared to $5.1 million at December 31, 2017. The increase in cash was due to $9.0 million equity raise completed in May 2018. The company has continued to operate debt-free and expects to generate positive cashflow from operations for the remainder of 2018.

 

Management Commentary

 

“In Q2, we realized our seventh consecutive quarter of revenue growth and achieved profitability through adding new pharmaceutical brands, growing our digital health messaging revenue and expanding our distribution channels,” said OptimizeRx CEO, William Febbo.

 

“OptimizeRx continued to be the largest network of its kind, with promotional programs incorporated into more than 50% of the ambulatory market and with more healthcare providers at 'point-of-prescribe' than any other network. This broad market reach provides us a substantial competitive advantage as we continue to grow our core products and pharma customer base. We continue to believe our addressable market is worth well north of $500 million to a billion once the market fully adopts this channel.

 

“Revenue was up 78% from the year-ago quarter and up 24% sequentially, demonstrating how our low fixed-overhead model continues to support a highly-scalable financial opportunity. This was also evident in our expanding margins. In fact, at 56.1% for the quarter, we surpassed our previously announced gross margin goal of 55%, and we expect to again exceed this goal in the second half of the year.

 

“For the second half of 2018, we will remain focused on revenue generation from our core products and expanding our channel and partner networks both domestically and internationally. We see this driving continued gross margin improvement as we scale.

 

“We plan to use a portion of the proceeds from our recent $9.0 million raise to make additional sales and channel investments for expanding further into our core ambulatory market where we continue to demonstrate high ROI for pharma marketing spend. We also plan to further expand into the hospital market, a new channel for us that also represents a significant growth opportunity. In addition, we will increase investment in the underlying technology that powers our solutions and will invest in our data strategy.

 

“While investments in these growth initiatives may result in quarterly fluctuations in profitability, we expect them to drive further strong topline growth and margin expansion while sustaining our position as the market leader in our space.”

 

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Conference Call

 

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

 

Date: Tuesday, August 7, 2018

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

Toll-free dial-in number: 1-888-220-8451

International dial-in number: 1-323-794-2590

Conference ID: 9709267

 

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 28, 2018, as well as available for replay via the Investors section of the OptimizeRx website at www.optimizerx.com.

 

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

International replay number: 1-412-317-6671

Replay ID: 9709267

 

About OptimizeRx

OptimizeRx® (NASDAQ: OPRX) is one of the nation’s leading providers of digital health messaging via electronic health records (EHRs), providing a direct channel for pharma companies to communicate with healthcare providers. The company’s cloud-based solution supports patient adherence to medications by providing real-time access to financial assistance, prior authorization, education, and critical clinical information. The company’s network is comprised of leading EHR platforms like Allscripts, Amazing Charts and Quest, and provides more than half of the ambulatory patient market with access to these benefits within their workflow at the point-of-care. 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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OPTIMIZERx CORPORATION

 CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2018 AND DECEMBER 31, 2017

 

   June 30,
2018
   December 31, 2017 
   (unaudited)     
ASSETS        
Current Assets        
Cash and cash equivalents  $12,003,864   $5,122,573 
Accounts receivable   2,954,782    2,257,276 
Accounts receivable – related party   2,555,931    1,173,614 
Prepaid expenses   215,108    255,428 
Total Current Assets   17,729,685    8,808,891 
Property and equipment, net   152,898    167,305 
Other Assets          
Patent rights, net   604,820    638,766 
Web development and other intangible costs, net   152,381    143,730 
Security deposit   5,049    5,049 
Total Other Assets   762,250    787,545 
TOTAL ASSETS  $18,644,833   $9,763,741 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities          
Accounts payable – trade  $176,940   $457,289 
Accrued expenses   828,540    953,947 
Revenue share payable   994,142    1,177,136 
Revenue share payable – related party   -    447,670 
Deferred revenue   845,153    507,160 
Total Liabilities   2,844,775    3,543,202 
Stockholders’ Equity          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at June 30, 2018 or December 31, 2017   -    - 
Common stock, $0.001 par value, 166,666,667 shares authorized, 11,556,858 and 9,772,694 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively   11,557    9,773 
Stock warrants   1,286,424    1,286,424 
Additional paid-in-capital   44,915,896    35,287,464 
Accumulated deficit   (30,413,819)   (30,363,122)
Total Stockholders’ Equity   15,800,058    6,220,539 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $18,644,833   $9,763,741 

 

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OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017

 

   For the Three Months Ended   For the Six Months Ended 
   June 30   June 30 
   2018   2017   2018   2017 
NET REVENUE                
Revenue  $3,192,138   $2,252,222   $5,961,257   $3,652,540 
Revenue – Related Party   1,907,336    613,601    3,250,453    1,365,356 
TOTAL NET REVENUE   5,099,474    2,865,823    9,211,710    5,017,896 
REVENUE SHARE EXPENSE   2,236,751    1,605,534    4,244,842    2,987,267 
GROSS MARGIN   2,862,723    1,260,289    4,966,868    2,030,629 
OPERATING EXPENSES   2,589,126    1,630,853    4,884,467    3,291,631 
INCOME (LOSS) FROM OPERATIONS   273,597    (370,564)   82,401    (1,261,002)
                     
OTHER INCOME (EXPENSE)                    
Interest income   6,912    9,063    8,929    16,819 
Interest expense   -    -    -    - 
                     
TOTAL OTHER INCOME (EXPENSE)   6,912    9,063    8,929    16,819 
                     
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES   280,509    (361,501)   91,330    (1,244,183)
                     
PROVISION FOR INCOME TAXES   -    -    -    - 
NET INCOME (LOSS)  $280,509   $(361,501)  $91,330   $(1,244,183)
                     
WEIGHTED AVERGE NUMBER OF SHARES OUTSTANDING                    
BASIC   10,979,086    9,861,257    10,373,326    9,883,648 
DILUTED   11,949,593    9,861,257    11,517,604    9,883,648 
                     
NET INCOME (LOSS) PER SHARE                    
BASIC  $0.03   $(0.04)  $0.01   $(0.13)
DILUTED  $0.02   $(0.04)  $0.01   $(0.13)

 

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OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017

  

   For the Six Months Ended June 30 
   2018   2017 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss) for the period  $91,330   $(1,244,183)
Adjustments to reconcile net income(loss) to net cash used in operating activities:          
Depreciation and amortization   108,946    141,945 
Stock and options issued for services   1,013,822    291,874 
Changes in:          
Accounts receivable   (2,079,823)   638,602 
Prepaid expenses   40,320    (866,333)
Accounts payable   (280,349)   534,743 
Revenue share payable   (183,664)   (751,094)
Accrued expenses   (125,407)   (91,981)
Deferred revenue   195,966    650,331 
NET CASH USED IN OPERATING ACTIVITIES   (1,218,859)   (696,096)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (12,593)   (24,599)
Web development and other intangible costs   (56,651)   (81,350)
NET CASH USED IN INVESTING ACTIVITIES   (69,244)   (105,949)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Net proceeds from issuance of common stock for cash   8,169,394    - 
Repurchase of common stock and stock payable   -    (390,000)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   8,169,394    (390,000)
NET CHANGEIN CASH AND CASH EQUIVALENTS   6,881,291    (1,192,045)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   5,122,573    7,034,647 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $12,003,864   $5,842,602 
           
SUPPLEMENTAL CASH FLOW INFORMATION:          
Cash paid for interest  $-   $- 
Cash paid for income taxes  $-   $- 
Non-cash issuance of shares to WPP  $447,000   $- 

 

OptimizeRx Contact:

Doug Baker, CFO

Tel (248) 651-6568 x807

dbaker@optimizerx.com

 

Investor Relations Contact:

Ron Both, CMA

Tel (949) 432-7557

Email contact

 

 

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