OptimizeRx Corp 10-Q

Item 1. Financial Statements Our condensed consolidated financial statements included in this Form 10-Q are as follows: Page Number 2 Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020 (unaudited); 3 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (unaudited); 4 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2021 (unaudited) 5 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020 (unaudited) 6 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited); 7 Notes to Condensed Consolidated Financial Statements (unaudited). 1 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30, 2021 December 31, 2020 ASSETS Current Assets Cash and cash equivalents $ 85,056,578 $ 10,516,776 Accounts receivable, net 20,747,529 17,885,705 Prepaid expenses 2,564,711 4,456,611 Total Current Assets 108,368,818 32,859,092 Property and equipment, net 130,863 148,854 Other Assets Goodwill 14,740,031 14,740,031 Technology assets, net 4,784,771 5,251,822 Patent rights, net 2,205,550 2,349,570 Other intangible assets, net 4,045,890 4,519,552 Right of use assets, net 362,024 445,974 Other assets and deposits 12,859 12,859 Total Other Assets 26,151,125 27,319,808 TOTAL ASSETS $ 134,650,806 $ 60,327,754 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable – trade $ 771,645 $ 618,250 Accrued expenses 2,460,248 2,420,361 Revenue share payable 3,891,091 4,969,868 Current portion of lease obligations 101,063 123,220 Current portion of contingent purchase price payable - 1,610,813 Deferred revenue 348,405 285,795 Total Current Liabilities 7,572,452 10,028,307 Non-current Liabilities Lease obligations, net of current portion 260,614 325,533 Total Non-current Liabilities 260,614 325,533 Total Liabilities 7,833,066 10,353,840 Commitments and contingencies (See Note 8) - - Stockholders’ Equity Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, no issued and outstanding at September 30, 2021 or December 31, 2020 - - Common stock, $ 0.001 par value, 166,666,667 shares authorized, 17,727,769 and 15,223,340 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 17,728 15,223 Additional paid-in-capital 162,677,132 85,590,428 Accumulated deficit ( 35,877,120 ) ( 35,631,737 ) Total Stockholders’ Equity 126,817,740 49,973,914 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 134,650,806 $ 60,327,754 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 NET REVENUE $ 16,124,951 $ 10,519,191 $ 40,979,801 $ 26,887,022 COST OF REVENUES 7,047,832 4,504,844 17,733,400 11,385,622 GROSS MARGIN 9,077,119 6,014,347 23,246,401 15,501,400 OPERATING EXPENSES 9,038,929 6,191,069 23,506,381 18,993,187 INCOME (LOSS) FROM OPERATIONS 38,190 ( 176,722 ) ( 259,980 ) ( 3,491,787 ) OTHER INCOME (EXPENSE) Interest income 1,704 4,218 14,597 67,884 Change in fair value of contingent consideration - ( 110,390 ) - ( 140,390 ) TOTAL OTHER INCOME (EXPENSE) 1,704 ( 106,172 ) 14,597 ( 72,506 ) INCOME(LOSS) BEFORE PROVISION FOR INCOME TAXES 39,894 ( 282,894 ) ( 245,383 ) ( 3,564,293 ) PROVISION FOR INCOME TAXES - - - - NET INCOME (LOSS) $ 39,894 $ ( 282,894 ) $ ( 245,383 ) $ ( 3,564,293 ) WEIGHTED AVERGE SHARES OUTSTANDING BASIC 17,639,346 14,900,971 17,028,762 14,726,534 DILUTED 18,198,412 14,900,971 17,028,762 14,726,534 EARNINGS (LOSS) PER SHARE BASIC $ 0.00 $ ( 0.02 ) $ ( 0.01 ) $ ( 0.24 ) DILUTED $ 0.00 $ ( 0.02 ) $ ( 0.01 ) $ ( 0.24 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 (UNAUDITED) Additional Common Stock Paid in Accumulated Shares Amount Capital Deficit Total Balance January 1, 2021 15,223,340 $ 15,223 $ 85,590,428 $ ( 35,631,737 ) $ 49,973,914 Public offering of common shares, net of offering costs 1,523,750 1,524 70,670,012 70,671,536 Shares issued for stock options exercised 510,803 511 1,119,500 - 1,120,011 Shares issued as board compensation 2,695 3 124,991 - 124,994 Stock-based compensation expense - - 582,159 - 582,159 Net loss - - - ( 637,377 ) ( 637,377 ) Balance March 31, 2021 17,260,588 17,261 158,087,090 ( 36,269,114 ) 121,835,237 Shares issued for stock options exercised 232,806 232 1,590,535 - 1,590,767 Shares issued as board compensation 2,035 2 125,089 - 125,091 Stock-based compensation expense - - 771,947 - 771,947 Net income - - - 352,100 352,100 Balance June 30, 2021 17,495,429 17,495 160,574,661 ( 35,917,014 ) 124,675,142 Shares issued for stock options exercised 232,340 233 1,094,464 - 1,094,697 Stock-based compensation expense - - 1,008,007 - 1,008,007 Net income - - - 39,894 39,894 Balance September 30, 2021 17,727,769 $ 17,728 $ 162,677,132 $ ( 35,877,120 ) $ 126,817,740 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 (UNAUDITED) Additional Common Stock Paid in Accumulated Shares Amount Capital Deficit Total Balance January 1, 2020 14,600,579 $ 14,601 $ 78,272,268 $ ( 33,424,610 ) $ 44,862,259 Shares issued for stock options exercised 35,032 35 112,117 - 112,152 Shares issued as board compensation 11,136 11 99,989 - 100,000 Stock-based compensation expense - - 754,512 - 754,512 Net loss - - - ( 2,203,931 ) ( 2,203,931 ) Balance March 31, 2020 14,646,747 14,647 79,238,886 ( 35,628,541 ) 43,624,992 Shares issued for stock options exercised 55,731 56 174,775 - 174,831 Shares issued as board compensation 7,748 8 100,019 - 100,027 Stock-based compensation expense 42,374 42 680,602 - 680,644 Net loss - - - ( 1,077,468 ) ( 1,077,468 ) Balance June 30, 2020 14,752,600 14,753 80,194,282 ( 36,706,009 ) 43,503,026 Shares issued for stock options exercised 198,024 198 1,044,899 - 1,045,097 Shares issued as board compensation 5,915 6 124,978 - 124,984 Stock-based compensation expense 21,186 21 631,432 - 631,453 Shares issued for contingent purchase price and escrow hold back 94,501 94 1,657,454 - 1,657,548 Net loss - - - ( 282,894 ) ( 282,894 ) Balance September 30, 2020 15,072,226 $ 15,072 $ 83,653,045 $ ( 36,988,903 ) $ 46,679,214 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended September 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 245,383 ) $ ( 3,564,293 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation, amortization, and non-cash lease expense 1,580,173 1,563,883 Stock-based compensation 2,362,113 2,066,609 Stock issued for board services 250,085 325,011 Provision for loss on accounts receivable 60,000 80,000 Change in fair value of contingent consideration - 140,390 Changes in: Accounts receivable ( 2,921,824 ) ( 5,994,527 ) Prepaid expenses and other assets 1,891,900 ( 931,833 ) Accounts payable 153,395 ( 12,493 ) Revenue share payable ( 1,078,777 ) 2,023,650 Accrued expenses and other liabilities ( 53,710 ) 704,559 Deferred revenue 62,610 ( 118,737 ) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 2,060,582 ( 3,717,781 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of equipment ( 62,565 ) ( 45,254 ) Purchase of intangible assets ( 324,413 ) - NET CASH USED IN INVESTING ACTIVITIES ( 386,978 ) ( 45,254 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from public offering of common stock, net of commission costs 70,671,536 - Proceeds from the exercise of options 3,805,475 1,332,080 Payment of contingent consideration ( 1,610,813 ) ( 4,389,187 ) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 72,866,198 ( 3,057,107 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 74,539,802 ( 6,820,142 ) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 10,516,776 18,852,680 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 85,056,578 $ 12,032,538 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ - $ - Cash paid for income taxes $ - $ - Acquisition liabilities paid in common stock $ - $ 1,550,000 Lease liabilities arising from right of use assets $ - $ - The accompanying notes are an integral part of these condensed consolidated financial statements. 6 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2021 NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION The accompanying condensed consolidated financial statements include OptimizeRx Corporation and its wholly owned subsidiaries (collectively, the “Company”, “we”, “our”, or “us”). We are a digital health company that provides communications solutions for life science companies, physicians and patients. Connecting over half of healthcare providers in the U.S. and millions of patients through a proprietary network, the OptimizeRx digital health platform helps patients afford and stay on medications. The platform unlocks new patient and physician touchpoints for life science companies along the patient journey, from point-of-care, to retail pharmacy, through mobile patient engagement. The condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 are unaudited and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments necessary to present fairly our consolidated financial position as of September 30, 2021, and our results of operations, changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and the statements of cash flows for the nine months ended September 30, 2021 and 2020 have been made. Those adjustments consist of normal and recurring adjustments. The condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited consolidated balance sheet as of that date. Certain information and note disclosures, including a detailed discussion about the Company’s significant accounting policies, normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission on March 8, 2021. The results of operations for the three and nine months ended September 30, 2021, are not necessarily indicative of the results to be expected for the full year. NOTE 2 – NEW ACCOUNTING STANDARDS In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 is intended to improve consistent application and simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance. ASU 2019-12 is effective for annual and interim reporting periods beginning after December 12, 2020, with early adoption permitted. The Company adopted this standard effective January 1, 2021. The adoption of this standard did not have a material effect on our financial position, results of operations, or cash flows. NOTE 3 – REVENUES Under ASC 606, Revenue from Contracts with Customers , we record revenue when earned, rather than when billed. From time to time, we may record revenue based on our revenue recognition policies in advance of being able to invoice the customer, or we may invoice the customer prior to being able to recognize the revenue. Included in accounts receivable are unbilled amounts of $ 757,218 and $ 77,516 at September 30, 2021, and December 31, 2020, respectively. Amounts billed in advance of revenue recognition are presented as deferred revenue on the condensed consolidated balance sheets. 7 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2021 NOTE 3 – REVENUES (continued) The majority of our revenue is earned from life sciences companies, such as pharmaceutical and biotech companies, or medical device makers. A small portion of our revenue is earned from other sources, such as associations and technology companies. A break down is set forth in the table below. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue from: Life Science Companies $ 15,949,517 $ 10,177,247 $ 40,059,551 $ 25,751,278 Other 175,434 341,944 920,250 1,135,744 Total Revenue $ 16,124,951 $ 10,519,191 $ 40,979,801 $ 26,887,022 NOTE 4 – LEASES We have operating leases for office space in three multitenant facilities with lease terms greater than 12 months, which are recorded as assets and liabilities on our condensed consolidated balance sheets. These leases include our corporate headquarters, located in Rochester, Michigan, a customer service facility in Cranbury, New Jersey, and a technical facility in Zagreb, Croatia. For leases that contain renewal options we have only assumed renewal for the headquarters lease. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Amortization of the right of use assets is recognized as non-cash lease expense on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Short term lease costs include month to month leases in shared office space facilities. For the three and nine months ended September 30, 2021, the Company’s lease cost consisted of the following components, each of which is included in operating expenses within the Company’s condensed consolidated statements of operations: 8 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2021 NOTE 4 – LEASES (continued) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Operating lease cost $ 33,365 $ 100,094 Short-term lease cost (1) 13,652 46,466 Total lease cost $ 47,017 $ 146,560 (1) Short-term lease cost includes any lease with a term of less than 12 months. For the three and nine months ended September 30, 2020, the Company’s lease cost consisted of the following components, each of which is included in operating expenses within the Company’s condensed consolidated statements of operations: Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Operating lease cost $ 32,814 $ 98,441 Short-term lease cost (1) 36,602 116,817 Total lease cost $ 68,816 $ 215,258 (1) Short-term lease cost includes any lease with a term of less than 12 months. The table below presents the future minimum lease payments to be made under operating leases as of September 30, 2021: As of September 30, 2021 2021(a) $ 35,436 2022 104,572 2023 101,414 2024 80,742 2025 70,224 Total 392,388 Less: imputed interest 30,711 Total lease liabilities $ 361,677 (a) For the three-month period beginning October 1, 2021. 9 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2021 NOTE 4 – LEASES (continued) The weighted average remaining lease term at September 30, 2021 for operating leases was 3.76 years and the weighted average discount rate used in calculating the operating lease asset and liability was 4.5 %. Cash paid for amounts included in the measurement of lease liabilities was $ 31,528 and $ 33,919 for the three months ended September 30, 2021 and 2020, respectively. Cash paid for amounts included in the measurement of lease liabilities was $ 93,596 and $ 105,267 for the nine months ended September 30, 2021 and 2020, respectively. For the three months ended September 30, 2021 and 2020, payments on lease obligations were $ 35,740 and $ 28,482 , respectively, and amortization on the right of use assets was $ 30,458 and $ 28,600 , respectively. For the nine months ended September 30, 2021 and 2020, payments on lease obligations were $ 107,136 and $ 87,599 , respectively, and amortization on the right of use assets was $ 90,471 and $ 84,957 , respectively. NOTE 5 – STOCKHOLDERS’ EQUITY During the quarter ended March 31, 2021, in an underwritten primary offering, we issued 1,523,750 shares of our common stock for gross proceeds of $ 75,425,625 . In connection with this transaction, we incurred equity issuance costs of $ 4,754,089 related to payments to the underwriter, advisors and legal fees associated with the transaction, resulting in net proceeds to the Company of $ 70,671,536 . During the quarters ended September 30, 2021, June 30, 2021, and March 31, 2021, we issued 232,340 , 232,806 and 510,803 shares of our common stock, respectively, and received proceeds of $ 1,094,697 , $ 1,590,767 , and $ 1,120,011 , respectively, in connection with the exercise of stock options under our 2013 equity incentive plan. Of the shares issued in the quarter ended March 31, 2021, a total of 368,329 shares were issued in a cashless transaction related to 394,739 expiring options using the net settled method whereby 26,410 options were used to pay the purchase price. The remaining 116,064 shares issued in connection with the exercise of options were all issued for cash. No shares were issued in the quarter ended June 30, 2021 in cashless transactions. Of the shares issued in the quarter ended September 30, 2021, a total of 73,501 shares were issued in a cashless transaction related to 78,334 expiring options using the net settled method whereby 4,833 options were used to pay the purchase price. The remaining 158,839 shares issued in connection with the exercise of options were all issued for cash. During the quarters ended September, 30, 2020, June 30, 2020, and March 31, 2020, we issued 198,024 , 55,731 , and 35,032 shares of our common stock, and received proceeds of $ 1,045,097 , $ 174,831 and $ 112,152 , respectively, in connection with the exercise of stock options under our 2013 incentive plan. During 2020 and the first two quarters of 2021, each of our non-employee directors received approximately $ 25,000 of fully vested shares of common stock on a quarterly basis. In 2021, we issued 2,695 shares of common stock valued at $ 124,994 to our non-employee directors in the quarter ended March 31, 2021 and 2,035 shares valued at $ 125,091 in the quarter ended June 30, 2021. In the quarter ended September 30, 2021 we changed our non-employee director compensation program and began issuing restricted stock units to our non-employee directors on a quarterly basis which vest at the end of one year. In 2020, we issued 11,136 shares valued at $ 100,000 in the quarter ended March 31, 2020, 7,748 shares valued at $ 100,027 in the quarter ended June 30, 2020, and 5,915 shares valued at $ 124,984 in the quarter ended September 30, 2020. We also issued 63,560 shares of our common stock in the nine months ended September 30, 2020, in connection with restricted stock unit awards as described in more detail in Note 6 – Stock Based Compensation. No shares other than the previously described non-employee director shares were issued in 2021 in connection with restricted stock unit awards. 10 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2021 NOTE 6 – STOCK BASED COMPENSATION We use the fair value method to account for stock-based compensation. We recorded $ 1,711,075 and $ 1,447,826 in compensation expense in the nine months ended September 30, 2021 and 2020, respectively, related to options issued under our equity compensation plans. This includes expense related to options issued in prior years for which the requisite service period for those options includes the current period as well as options issued in the current period. The fair value of these instruments was calculated using the Black-Scholes option pricing model. There is $ 8,654,678 of remaining expense related to unvested options to be recognized in the future over a weighted average remaining period of approximately 2.5 years. The total intrinsic value of outstanding options at September 30, 2021 was $ 51,205,814 . In addition to the grants to non-employee directors described in Note 5 – Stockholders’ Equity, we also recorded $ 651,038 and $ 618,783 in compensation expense related to restricted stock unit awards that vest over time in the nine months ended September 30, 2021, and 2020, respectively. There is $ 4,407,269 of remaining expense related to unvested restricted stock unit awards to be recognized in the future over a weighted average period of 3.6 years. NOTE 7 – EARNINGS (LOSS) PER SHARE Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. The number of shares related to options and restricted stock units included in diluted EPS is based on the “Treasury Stock Method” prescribed in ASC 260-10, Earnings per Share. This method assumes the theoretical repurchase of shares using proceeds of the respective stock option exercised, and for restricted stock units, the amount of compensation cost attributed to future services which have not yet been recognized, and the amount of current and deferred tax benefit, if any, that would be credited to additional paid in capital upon the vesting of the restricted stock units, at a price equal to the issuer’s average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of EPS in respect of the stock options and restricted stock units is dependent on this average stock price and will increase as the average stock price increases. The following table sets forth the computation of basic and diluted earnings (loss) per share. 11 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2021 NOTE 7 – EARNINGS (LOSS) PER SHARE (continued) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator Net income (loss) $ 39,894 $ ( 282,894 ) $ ( 245,383 ) $ ( 3,564,293 ) Denominator Weighted average shares outstanding used in computing earnings per share Basic 17,639,346 14,990,971 17,028,762 14,726,534 Effect of dilutive stock options, and unvested restricted stock unit awards 559,066 - - - Diluted 18,198,412 14,900,917 17,028,762 14,726,534 Earnings (loss) per share Basic $ 0.00 $ ( 0.02 ) $ ( 0.01 ) $ ( 0.24 ) Diluted $ 0.00 $ ( 0.02 ) $ ( 0.01 ) $ ( 0.24 ) No calculation of diluted earnings per share is included for either 2020 period or for the nine months ended September 30, 2021, as the effect of the calculation would be antidilutive. The number of common shares potentially issuable upon the exercise of certain options or for unvested restricted stock unit awards are reflected in the table below. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Weighted average number of shares excluded from calculation Unvested restricted stock unit awards 113,886 111,186 120,509 111,186 Options 445,180 984,084 406,322 802,330 Total 559,066 1,095,270 526,831 913,516 12 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2021 NOTE 8 – CONTINGENCIES Litigation The Company is not currently involved in any legal proceedings. NOTE 9 – INCOME TAXES As discussed in our annual report on Form 10-K for the year ended December 31, 2020, we had net operating losses carryforwards for federal income tax purposes of $ 19.3 million as of December 31, 2020. Accordingly no federal income tax expense is recorded in the current period. NOTE 10 – SUBSEQUENT EVENTS In October 2021, we received proceeds of $ 302,033 and issued 41,775 shares of common stock in conjunction with the exercise of stock options. In accordance with ASC 855-10, we have analyzed events and transactions that occurred subsequent to September 30, 2021 through the date these financial statements were issued and have determined that we do not have any other material subsequent events to disclose or recognize in these financial statements. 13