What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-28 compared with 2021-03-08 · 732 added, 798 removed, 306 unchanged (83% of the section changed)

Financial Statements and Supplementary Data

Index to Financial Statements Required

by Article 8 of Regulation S-X:

to Financial Statements Required by Article 8 of Regulation S-X:

Audited Financial Statements:

Reports of Independent Registered Public Accounting Firms;

Reports of Independent Registered

Public Accounting Firm;

Consolidated Balance Sheets as of December 31, 2021 and

Consolidated Statements of Operations for the years ended December 31, 2020 and 2019;

Consolidated Statement of Stockholders’

Equity for the year ended December 31, 2020;

Consolidated Statement of Stockholders’

Equity for the year ended December 31, 2019;

Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019;

Consolidated Statements of Operations for the years

ended December 31, 2021 and 2020;

Consolidated Statement of Stockholders’ Equity

for the year ended December 31, 2021;

Consolidated Statement of Stockholders’ Equity

for the year ended December 31, 2020;

Consolidated Statements of Cash Flows for the years

ended December 31, 2021 and 2020;

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

Shareholders and Board of Directors of

the Shareholders and Board of Directors of

OptimizeRx Corporation

on the Financial Statements

have audited the accompanying consolidated balance sheet of OptimizeRx Corporation and Subsidiaries (the “Company”)

as of December 31, 2020, and the related consolidated statements of operations, stockholders’

equity and cash flows for the

year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting

principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered

with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with

respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to

obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due

to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis,

evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the

consolidated financial statements.

have audited the accompanying consolidated balance sheets of OptimizeRx Corporation and Subsidiaries (the Company) as of December 31,

2021 and 2020, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended,

and the related notes (collectively referred to as the consolidated financial statements).

We have also audited the Company’s internal

control over financial reporting as December 31, 2021, based on criteria established in Internal Control – Integrated Framework

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position

of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity

with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material

respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control

– Integrated Framework (2013) issued by COSO.

Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting,

and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report on Internal

Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm

registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect

to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange

Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud,

and whether effective internal control over financial reporting was maintained in all material respects.

audits of the financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial

statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining,

on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating

the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated

financial statements.

We believe that our audit provides a reasonable basis for our opinion.

The critical audit matter communicated

below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required

to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated

financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of critical audit

matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating

the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to

which they related.

Shareholders and Board of Directors of

OptimizeRx Corporation

audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,

assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control

based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

and Limitations of Internal Control over Financial Reporting

company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance

with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material

to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication

of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or

disclosures to which they related.

Audit Matter - Revenue Recognition

disclosed in Note 2 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of

promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange

for those products or services.

Significant judgment is excised by the

Company in determining revenue recognition for these customer agreements, and includes the following:

(1) determining whether services

are considered distinct performance obligations that should be accounted for separately versus together (2) the pattern and timing

of delivery for each distinct performance obligation, and (3) identification and treatment of contract terms that may impact the

timing and amount of revenue recognized.

disclosed in Note 2 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products

or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or

judgment is exercised by the Company in determining revenue recognition for these customer agreements and includes the following:

(1) determining

whether services are considered distinct performance obligations that should be accounted for separately versus together (2) the pattern

and timing of delivery for each distinct performance obligation, and (3) identification and treatment of contract terms that may impact

the timing and amount of revenue recognized.

the Critical Audit Matter Was Addressed in the Audit

procedures we performed to address this critical audit matter included the following:

(1) obtaining an understanding of the

design and implementation of controls related to identifying distinct performance obligations, determining the timing of

revenue recognition and any estimation of variable consideration, (2) selection of a sample of customer agreements and

testing management’s identification and treatment of contract terms, and testing the mathematical accuracy of

management’s calculations of revenue and the associated timing of revenue recognized in the consolidated financial

We have served as the Company’s auditor since 2020.

Sterling Heights, Michigan

March 8, 2021

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

OptimizeRx Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheet of OptimizeRx Corporation and Subsidiaries (the “Company”) as of December 31, 2019, and the related consolidated

statements of operations, stockholders’

equity and cash flows for the year then ended, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for

the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the

Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting

as of December 31, 2019, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated March 26, 2020, expressed an adverse opinion

on the effectiveness of the Company’s internal control over financial reporting because of the existence of material weaknesses.

Adoption of New Accounting Standards

As discussed in Note 2 to the financial

statements, the Company changed its method of accounting for leases in 2019 due to the adoption of ASU No.

2016-02, Leases (Topic

842), as amended, effective January 1, 2019, using the modified retrospective approach.

Basis for Opinion

These financial statements are the responsibility

of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

We conducted our audit in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our

audit provides a reasonable basis for our opinion.

/s/ Marcum llp

We served as the Company’s auditor from 2019 to 2020.

March 26, 2020

audit procedures we performed to address this critical audit matter included the following:

(1) obtaining an understanding of the design

and operating effectiveness of controls related to identifying distinct performance obligations, determining the timing of revenue recognition

and any estimation of variable consideration, (2) selection of a sample of customer agreements and testing management’s identification

and treatment of contract terms, and testing the mathematical accuracy of management’s calculations of revenue and the associated

timing of revenue recognized in the consolidated financial statements.

have served as the Company’s auditor since 2020.

Heights, Michigan

OPTIMIZERx CORPORATION

12 unchanged sentences

Total Other Assets

LIABILITIES AND STOCKHOLDERS’

$ 140,985,192

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts payable –

Accounts payable – trade

Accrued expenses

6 unchanged sentences

Lease liabilities, net of current portion

Contingent purchase price payable, net of current portion

Total Non-Current Liabilities

Total Liabilities

Commitments and contingencies (See Note 14)

Stockholders’

Stockholders’ Equity

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at December 31, 2021 and 2020,

4 unchanged sentences

( 35,631,737 )

Total Stockholders’

TOTAL LIABILITIES AND STOCKHOLDERS’

The accompanying notes are an integral part

of these financial statements.

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 140,985,192

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

3 unchanged sentences

Stock-based compensation

Depreciation and amortization

Depreciation, amortization, and noncash lease expense

Other general and administrative expenses

Total operating expenses

Loss from operations

Income (loss) from operations

( 2,135,319 )

Other income (expense)

1 unchanged sentence

Change in fair value of contingent consideration

Total other expense

Loss before provision for income taxes

Income tax benefit

Total other income (expense)

Income (loss) before provision for income taxes

( 2,207,127 )

Income tax benefit

Net income (loss)

$ ( 2,207,127 )

Weighted average number of shares outstanding –

Loss per share –

The accompanying notes are an integral part

of these financial statements.

Weighted average number of shares outstanding – basic

Weighted average number of shares outstanding – diluted

Income (loss) per share – basic

Income (loss) per share – diluted

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

Consolidated Statement of Stockholders’

Equity for the Year

Ended December 31, 2021

Stockholders’

Balance, January 1, 2021

5 unchanged sentences

For stock options exercised

For contingent purchase price and escrow hold back

Net loss for the year

Public offering of common shares, net of offering costs

Net income for the year

Balance, December 31, 2021

$ 166,615,514

The accompanying notes are an integral part

of these financial statements.

$ ( 35,253,658 )

$ 131,379,717

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

Consolidated Statement of Stockholders’

Equity for the Year

Ended December 31, 2020

Stockholders’

Balance, January 1, 2020

Cumulative effect of change in accounting principle related to lease accounting

Shares issued in 2019 for restricted stock awards granted and expensed in 2018

$ ( 33,424,610 )

Stock-based compensation expense

3 unchanged sentences

For stock options exercised

Shares issued for acquisition

For contingent purchase price and escrow hold back

Net loss for the year

( 2,207,127 )

Balance, December 31, 2020

The accompanying notes are an integral

part of these financial statements.

$ ( 35,631,737 )

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

1 unchanged sentence

CASH FLOWS FROM OPERATING ACTIVITIES:

$ (2,207,127 )

Net income (loss)

$ ( 2,207,127 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

2 unchanged sentences

Stock-based compensation

Income tax benefit

Change in fair value of contingent consideration

1 unchanged sentence

( 6,994,880 )

( 10,667,680 )

Prepaid expenses and other assets

( 1,174,044 )

( 3,517,700 )

Accounts payable

3 unchanged sentences

Deferred revenue

NET CASH USED IN OPERATING ACTIVITIES

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

( 6,310,386 )

CASH FLOWS FROM INVESTING ACTIVITIES:

2 unchanged sentences

Capitalized software development costs

Cash paid in acquisition, net of cash acquired

NET CASH USED IN INVESTING ACTIVITIES

(10,582,086 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Payment of contingent consideration

( 1,610,813 )

( 4,389,187 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

( 1,900,793 )

NET INCREASE (DECREASE IN) CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS –

BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS –

END OF PERIOD

( 8,335,904 )

CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS – END OF PERIOD

SUPPLEMENTAL CASH FLOW INFORMATION:

2 unchanged sentences

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Lease liabilities arising from right of use assets

Acquisition liabilities paid in stock

Shares issued in connection with acquisitions

Non-cash effect of cumulative adjustments to accumulated deficit

The accompanying notes are an integral part

of these financial statements.

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 1 –

ORGANIZATION AND NATURE

OptimizeRx is 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.

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

OptimizeRx is a digital health technology company

enabling 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 an intelligent technology

platform embedded within a proprietary point-of-care network, OptimizeRx helps patients start and stay on their medications.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company

have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented

in US dollars.

The financial statements of the Company have been

prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Use of Estimates

The preparation of financial statements

in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

during the reporting period.

Estimates and assumptions have been made in determining the carrying value of assets, depreciable

and amortizable lives of tangible and intangible assets, the carrying value of liabilities, the valuation allowance for the deferred

tax asset, the timing of revenue recognition and related revenue share expenses, and inputs used in the calculation of stock based

compensation.

Actual results could differ from these estimates.

The preparation of financial statements in conformity

with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

Estimates and assumptions have been made in determining the carrying value of assets, depreciable and amortizable lives of tangible

and intangible assets, the carrying value of liabilities, the valuation allowance for the deferred tax asset, the timing of revenue recognition

and related revenue share expenses, and inputs used in the calculation of stock based compensation.

Actual results could differ from these

Principles of Consolidation

1 unchanged sentence

results of OptimizeRx Corporation, a Nevada corporation, and its wholly owned subsidiaries:

OptimizeRx Corporation, a Michigan

corporation, RMDY Health, Inc., a Delaware corporation, CareSpeak Communications, Inc., a New Jersey corporation, Cyberdiet, a

controlled foreign corporation incorporated in Israel, and CareSpeak Communications D.O.O., a Controlled Foreign Corporation incorporated

Together, these companies are referred to as “OptimizeRx”

and “the Company.”

All material intercompany

transactions have been eliminated.

OptimizeRx Corporation, a Michigan corporation,

RMDY Health, Inc., a Delaware corporation, CareSpeak Communications, Inc., a New Jersey corporation, Cyberdiet, a controlled foreign corporation

incorporated in Israel, and CareSpeak Communications D.O.O., a Controlled Foreign Corporation incorporated in Croatia.

Together, these

companies are referred to as “OptimizeRx” and “the Company.” All material intercompany transactions have been

Reclassifications

Certain items in the previous year financial

statements have been reclassified to match the current year presentation.

Certain items in the previous year financial statements

have been reclassified to match the current year presentation.

Foreign Currency

The Company’s

functional currency is the U.S.

dollar, however it pays certain expenses related to its two foreign subsidiaries in the local

currency, which is the sheckel for its subsidiary in Israel and the kuna for its Croatian subsidiary.

All transactions are recorded

at the exchange rate at the time of payment.

If there is a time lag between the time of recording the liability and the time of

payment, a gain or loss is recorded in the Consolidated Statement of Operations due to any fluctuations in the exchange rate.

Cash and Cash Equivalents

For purposes of the accompanying financial

statements, the Company considers all highly liquid instruments, consisting of money market accounts, with an initial maturity

of three months or less to be cash equivalents.

For purposes of the accompanying financial statements,

the Company considers all highly liquid instruments, consisting of money market accounts, with an initial maturity of three months or

less to be cash equivalents.

Fair Value of Financial Instruments

Fair value is defined as the price that

would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants

at the measurement date and in the principal or most advantageous market for that asset or liability.

The fair value should be

calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific

to the entity.

In addition, the fair value of liabilities should include consideration of non-performance risk including our own

Fair value is defined as the price that would

be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement

date and in the principal or most advantageous market for that asset or liability.

The fair value should be calculated based on assumptions

that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

In addition, the fair

value of liabilities should include consideration of non-performance risk including our own credit risk.

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In addition to defining fair value, the

disclosure requirements around fair value establish a fair value hierarchy for valuation inputs, which is expanded.

The hierarchy

prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the

Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that

is significant to the fair value measurement in its entirety.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In addition to defining fair value, the disclosure

requirements around fair value establish a fair value hierarchy for valuation inputs, which is expanded.

The hierarchy prioritizes the

inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

Each fair value

measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value

measurement in its entirety.

These levels are:

Level 1 –

Inputs are based upon unadjusted

Level 1 – Inputs are based upon unadjusted

quoted prices for identical instruments traded in active markets.

Level 2 –

Inputs are based upon significant

Level 2 – Inputs are based upon significant

observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets

that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or

can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 –

Inputs are generally unobservable

and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow

models, and similar techniques.

The Company’s stock options and warrants are valued using level 3 inputs.

The following tables present the fair values

and carrying values of the Company’s financial assets and liabilities measured on a recurring basis as of December 31, 2020

and 2019 and the valuation techniques used by the Company to determine those fair values.

that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be

corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs are generally unobservable

and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models,

and similar techniques.

The Company’s stock options and warrants are valued using level 3 inputs.

The following tables present the fair values and

carrying values of the Company’s financial assets and liabilities measured on a recurring basis as of December 31, 2021 and 2020

and the valuation techniques used by the Company to determine those fair values.

Carrying Value

Contingent Purchase Price Payable

Carrying Value

Contingent Purchase Price Payable (1)

1 unchanged sentence

The Geometric-Brownian motion analysis was used to generate spot prices for use in an option pricing model.

For 2019, the hypothetical spot prices were simulated using a Monte Carlo simulation utilizing 2020 and 2021 projected revenue as a base and revenue volatility of 40%.

The risk-free rate of return and terms utilized were 1.4 % and 1-2 years, respectively, and expected volatility was 40%.

For 2020, the final payout has been determined and is payable in 2021.

For 2020, the final payout had been determined and was paid in 2021.

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The following table provides a summary

of changes in fair value of the Company’s Level 3 financial instruments for the years ended December 31, 2020 and 2019.

Balance December 31, 2018

Contingent consideration liability recorded as the result of the RMDY Health, Inc.

acquisition (see note 3)

Increase in the value of the CareSpeak Communication consideration

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The following table provides a summary of changes

in fair value of the Company’s Level 3 financial instruments for the years ended December 31, 2021 and 2020.

Balance December 31, 2019

Increase in fair value of the RMDY Health, Inc.

contingent consideration

Payment of CareSpeak Communication contingent consideration

( 1,389,187 )

Payment of RMDY Health, Inc.

contingent consideration

( 3,860,390 )

Increase in the value of the RMDY Health, Inc.

contingent consideration

Balance December 31, 2020

Accounts Receivable and Allowance for

Doubtful Accounts

Payment of CareSpeak Communication contingent consideration

( 1,610,813 )

Balance December 31, 2021

Accounts Receivable and Allowance for Doubtful

Accounts receivable are reported at realizable

value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded.

The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors,

including the period they have been outstanding.

Historical collection and payer reimbursement experience is an integral part of

the estimation process related to allowances for doubtful accounts.

In addition, the Company regularly assesses the state of its

billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates.

Because the Company’s customers are primarily large well-capitalized companies, historically there has been very little bad

debt expense.

Bad debt expense was $200,000 for the year ended December 31, 2020 and $80,000 for the year ended December 31,

The allowance for doubtful accounts was $158,163 and $80,000 as of December 31, 2020 and 2019, respectively.

to time, we may record revenue based on our revenue recognition policies described below in advance of being able to invoice the

These amounts are included in accounts receivable and are immaterial, representing substantially less than 1% of the

accounts receivable balance at December 31, 2020.

has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period

they have been outstanding.

Historical collection and payer reimbursement experience is an integral part of the estimation process related

to allowances for doubtful accounts.

In addition, the Company regularly assesses the state of its billing operations in order to identify

issues, which may impact the collectability of these receivables or reserve estimates.

Because the Company’s customers are primarily

large well-capitalized companies, historically there has been very little bad debt expense.

Bad debt expense was $ 80,000 for the year

ended December 31, 2021 and $ 200,000 for the year ended December 31, 2020.

The allowance for doubtful accounts was $ 241,219 and $ 158,163

as of December 31, 2021 and 2020, respectively.

From time to time, we may record revenue based on our revenue recognition policies

described below in advance of being able to invoice the customer.

Included in accounts receivable are unbilled amounts of $ 2,110,865 and

$ 757,218 at December 31, 2021, and December 31, 2020, respectively.

Property and Equipment

Property and equipment are stated at cost

and are being depreciated over their estimated useful lives of three to five years for office equipment and three years for computer

equipment using the straight-line method of depreciation for book purposes.

Property and equipment are stated at cost and

are being depreciated over their estimated useful lives of three to five years for office equipment and three years for computer equipment

using the straight-line method of depreciation for book purposes.

Maintenance and repair charges are expensed as incurred.

1 unchanged sentence

Intangible assets are stated at cost.

assets are being amortized over their estimated useful lives of fifteen to seventeen years for patents, eight years for customer

relationships, fifteen years for tradenames, four years for covenants not to compete, and three to four years for software and

websites, all using the straight-line method.

assets are being amortized over their estimated useful lives of fifteen to seventeen years for patents, eight years for customer relationships,

fifteen years for tradenames, four years for covenants not to compete, and three to four years for software and websites, all using the

straight-line method.

These assets are evaluated when there is a triggering event.

There was no impairment

of our intangible assets in either year presented.

We evaluate goodwill for impairment during

our fiscal fourth quarter, or more frequently if an event occurs or circumstances change.

Our analysis determined that there was

no impairment of our goodwill.

There was no impairment of our intangible assets in

either year presented.

We evaluate goodwill for impairment during our

fiscal fourth quarter, or more frequently if an event occurs or circumstances change.

Our analysis determined that there was no impairment

of our goodwill.

OPTIMIZERx CORPORATION

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DECEMBER 31, 2021

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Recognition of revenue requires evidence

of a contract, probable collection of proceeds, and completion of substantially all performance obligations.

We use a 5-step model

to recognize revenue.

Recognition of revenue requires evidence of a

contract, probable collection of proceeds, and completion of substantially all performance obligations.

We use a 5-step model to recognize

These steps are:

identify the contract with a customer, identify the performance obligations in the contract,

determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue

when or as the performance obligations are satisfied.

identify the contract with a customer, identify the performance obligations in the contract, determine the transaction

price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the performance

obligations are satisfied.

Revenues are primarily generated from content

3 unchanged sentences

This content delivery for a customer is referred to as a program.

Unless otherwise specified, revenue is recognized

based on the selling price to customers.

The Company’s contracts are generally

all less than one year and the primary performance obligation is delivery of messages, or content, but the contract may contain

additional services.

Additional services may include program design, which is the design of the content delivery program, set up,

and reporting.

We consider set up and reporting services to be complimentary to the primary performance obligation and recognized

through performance of the delivery of content.

We consider program design and related consulting services to be performance obligations

separate from the delivery of messages.

As the content is distributed through the

platform and network of channel partners (a transaction), these transactions are recorded, and revenue is recognized, over time

as the distributions occur.

Revenue for transactions can be realized based on a price per message, a price per redemption, as a

flat fee occurring over a period of time, or upon completion of the program, depending on the client contract.

The Company recognizes

setup fees that are required for integrating client offerings and campaigns into the rule-based content delivery system and network

over the life of the initial program, based either on time, or units delivered, depending upon which is most appropriate in the

specific situation.

Should a program be cancelled before completion, the balance of set up revenue is recognized at the time of

cancellation, as set up fees are nonrefundable.

Additionally, the Company also recognizes revenue for providing program performance

reporting and maintenance, either by the Company directly delivering reports or by providing access to its online reporting portal

that the client can utilize.

This reporting revenue is recognized over time as the messages are delivered.

Program design, which

is the design of the content delivery program, and related consulting services are recognized as services are performed.

The Company does not disaggregate its revenue

as virtually all types of revenue are generated through the same core group of customers and generally all involve the delivery

Different types of revenue are not impacted by economic factors that affect the nature, amount, timing, or uncertainty

of revenues or cash flows.

In some instances, the Company also resells

messaging solutions that are available through channel partners that are complementary to the core business and client base.

partner specific solutions are frequently similar to our own solutions and revenue recognition for these programs is the same as

described above.

In instances where the Company sells solutions on a commission basis, net revenue is recognized based on the commission-based

revenue split that the Company receives.

There were only minor immaterial programs recorded on a net basis in the years presented.

In instances where the Company resells these messaging solutions and has all financial risk and significant operation input and

risk, the Company records the revenue based on the gross amount sold and the amount paid to the channel partner as a cost of sales.

Unless otherwise specified, revenue is recognized based

on the selling price to customers.

The Company’s contracts are generally all

less than one year and the primary performance obligation is delivery of messages, or content, but the contract may contain additional

Additional services may include program design, which is the design of the content delivery program, set up, and reporting.

We consider set up and reporting services to be complimentary to the primary performance obligation and recognized through performance

of the delivery of content.

We consider program design and related consulting services to be performance obligations separate from the

delivery of messages.

As the content is distributed through the platform

and network of channel partners (a transaction), these transactions are recorded, and revenue is recognized, over time as the distributions

Revenue for transactions can be realized based on a price per message, a price per redemption, as a flat fee occurring over a period

of time, or upon completion of the program, depending on the client contract.

The Company recognizes setup fees that are required for

integrating client offerings and campaigns into the rule-based content delivery system and network over the life of the initial program,

based either on time, or units delivered, depending upon which is most appropriate in the specific situation.

Should a program be cancelled

before completion, the balance of set up revenue is recognized at the time of cancellation, as set up fees are nonrefundable.

Additionally,

the Company also recognizes revenue for providing program performance reporting and maintenance, either by the Company directly delivering

reports or by providing access to its online reporting portal that the client can utilize.

This reporting revenue is recognized over time

as the messages are delivered.

Program design, which is the design of the content delivery program, and related consulting services are

recognized as services are performed.

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.

Life Science Companies

Total Revenue

OPTIMIZERx CORPORATION

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DECEMBER 31, 2021

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenues (cont.)

In some instances, we license certain of our software

applications in arrangements that do not include other performance obligations.

In those instances, we record license revenue when the

software is delivered for use to the license.

In instances where our contracts included Software as a service, the revenue is recognized

over the subscription period as services are delivered to the customer.

In some instances, the Company also resells messaging

solutions that are available through channel partners that are complementary to the core business and client base.

These partner specific

solutions are frequently similar to our own solutions and revenue recognition for these programs is the same as described above.

where the Company sells solutions on a commission basis, net revenue is recognized based on the commission-based revenue split that the

Company receives.

There were no programs recorded on a net basis in the years presented.

In instances where the Company resells these

messaging solutions and has all financial risk and significant operation input and risk, the Company records the revenue based on the

gross amount sold and the amount paid to the channel partner as a cost of sales.

Cost of Revenues

The primary cost of revenue is revenue

share expense.

Based on the volume of transactions that are delivered through the channel partner network, the Company provides

a revenue share to compensate the partner, or others, for their promotion of the campaign.

Revenue shares are a negotiated percentage

of the transaction fees and can also be specific to special considerations and campaigns.

Income taxes are computed using the asset

and liability method.

Under the asset and liability method, deferred income tax assets and liabilities are determined based on

the differences between the financial reporting and tax basis of assets and liabilities and are measured using the currently enacted

tax rates and laws.

A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence,

are not expected to be realized.

Company recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained

on examination by the tax authorities, based on the technical merits of the position.

The tax benefit is measured based on the

largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

It is the Company’s policy

to include interest and penalties related to tax positions as a component of income tax expense.

The primary cost of revenue is revenue share expense.

Based on the volume of transactions that are delivered through the channel partner network, the Company provides a revenue share to compensate

the partner, or others, for their promotion of the campaign.

Revenue shares are a negotiated percentage of the transaction fees and can

also be specific to special considerations and campaigns.

Income taxes are computed using the asset and

liability method.

Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences

between the financial reporting and tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws.

A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained on examination

by the tax authorities, based on the technical merits of the position.

The tax benefit is measured based on the largest benefit that has

a greater than 50 % likelihood of being realized upon ultimate settlement.

It is the Company’s policy to include interest and penalties

related to tax positions as a component of income tax expense.

Concentration of Credit Risks

The Company maintains its cash and cash equivalents in bank

deposit accounts, which, at times, may exceed federally insured limits.

The Company maintains its cash and cash equivalents

in bank deposit accounts, which, at times, may exceed federally insured limits.

The Company has not experienced any losses in such accounts;

however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties.

December 31, 2020, and 2019 the Company had $9,936,806 and $18,047,903, respectively, in cash balances in excess of federally insured

limits, primarily at Bank of America/Merrill Lynch.

As of December

31, 2021 and 2020 the Company had $ 83,312,524 and $ 9,936,806 , respectively, in cash balances in excess of federally insured limits, primarily

at Bank of America/Merrill Lynch.

Research and Development

1 unchanged sentence

expenses as incurred.

Research and development expense was $0 and $1,604,195 in 2020 and 2019, respectively.

Stock-based Compensation

The Company uses the fair value method

to account for stock-based compensation.

The fair value of the equity instrument is charged directly to compensation expense and

additional paid-in capital over the period during which services are rendered.

The fair value of each award is estimated on the

date of each grant.

For restricted stock, the fair market value is based on the market value of the stock granted on the date of

For options, it is estimated using the Black-Scholes option pricing model that uses the assumptions noted in the following

Estimated volatilities are based on the historical volatility of the Company’s stock over the same period as the expected

term of the options.

The expected term of options granted represents the period of time that options granted are expected to be

The Company uses historical data to estimate option exercise behavior, forfeitures, and to determine this term.

forfeitures have been negligible and immaterial, so the impact of forfeitures are recorded at the time of forfeiture.

The risk-free

rate used is based on the U.S.

Treasury yield curve in effect at the time of the grant using a time period equal to the expected

The Company has never paid dividends and does not expect to pay any dividends in the future.

There was no research and development expense for the years ended December 31, 2021 and 2020.

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-based Compensation

The Company uses the fair value method to account

for stock-based compensation.

The fair value of the equity instrument is charged directly to compensation expense and additional paid-in

capital over the period during which services are rendered.

The fair value of each award is estimated on the date of each grant.

For restricted stock awards, the fair value is

based on the market value of the Company’s common stock on the date of grant.

For market based restricted stock units, the fair

value is estimated using a Monte Carlo simulation model.

This valuation technique includes estimating the movement of stock prices and

the effects of volatility, interest rates and dividends.

For options, fair value is estimated using the

Black-Scholes option pricing model that uses the following assumptions.

Estimated volatilities are based on the historical volatility

of the Company’s common stock over the same period as the expected term of the options.

The expected term of options granted represents

the period of time that options granted are expected to be outstanding.

The Company uses historical data to estimate option exercise behavior

and to determine this term.

The risk-free rate used is based on the U.S.

Treasury yield curve in effect at the time of the grant using

a time period equal to the expected option term.

The Company has never paid dividends and do not expect to pay any dividends in the future.

Expected dividend yield

3 unchanged sentences

Expected volatility

The Black-Scholes option valuation model

and other existing models were developed for use in estimating the fair value of traded options that have no vesting restrictions

and are fully transferable.

These option valuation models require the input of, and are highly sensitive to, subjective assumptions

including the expected stock price volatility.

The Company’s stock options have characteristics significantly different from

those of traded options, and changes in the subjective input assumptions could materially affect the fair value estimate.

Weighted average grant date fair value

The Black-Scholes option valuation model and other

existing models were developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully

transferable.

These option valuation models require the input of, and are highly sensitive to, subjective assumptions including the expected

stock price volatility.

The Company’s stock options have characteristics significantly different from those of traded options, and

changes in the subjective input assumptions could materially affect the fair value estimate.

Loss Per Common and Common Equivalent Share

The computation of basic (loss) earnings

per common share is computed using the weighted average number of common shares outstanding during the year.

The computation of

diluted (loss) earnings per common share is based on the basic weighted average number of shares outstanding during the year plus

common stock equivalents, which would arise from the exercise of options and warrants outstanding using the treasury stock method

and the average market price per share during the year.

The number of common shares potentially issuable upon the exercise of certain

options that were excluded from the diluted loss per common share calculation in 2019 was 891,224 related to options, and 59,918

related to restricted stock, for a total of 951,142 because they are anti-dilutive, as a result of a net loss for the year ended

The computation of basic (loss) earnings per common

share is computed using the weighted average number of common shares outstanding during the year.

The computation of diluted (loss) earnings

per common share is based on the basic weighted average number of shares outstanding during the year plus common stock equivalents, which

would arise from the exercise of options and warrants outstanding using the treasury stock method and the average market price per share

during the year.

The number of common shares potentially issuable upon the exercise of certain options that were excluded from the diluted

loss per common share calculation in 2020 was 820,059 related to options, and 91,667 related to restricted stock units, for a total of

911,726 because they are anti-dilutive, as a result of a net loss for the year ended December 31, 2020.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

The number of common shares potentially issuable upon the exercise of certain options that were excluded from

the diluted loss per common share calculation in 2020 was 820,059 related to options, and 91,667 related to restricted stock, for

a total of 911,726 because they are anti-dilutive, as a result of a net loss for the year ended December 31, 2020.

The computation of weighted average shares

outstanding and the basic and diluted earnings per common share for the years ended December 31, 2020 and 2019 consisted of the

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The computation of weighted average shares outstanding

and the basic and diluted earnings per common share for the years ended December 31, 2021 and 2020 consisted of the following:

Per Share Amount

Year ended December 31, 2021

$ (2,207,127 )

Per Share Amount

Year ended December 31, 2020

1 unchanged sentence

$ ( 2,207,127 )

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of Long-Lived Assets

The Company continually monitors events

and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable.

When such events

or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the

carrying value of such assets will be recovered through undiscounted expected future cash flows.

If the total of the future cash

flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying

amount over the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or the fair

value less costs to sell.

The Company continually monitors events and changes

in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable.

When such events or changes in circumstances

are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will

be recovered through undiscounted expected future cash flows.

If the total of the future cash flows is less than the carrying amount of

those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

Segment reporting

1 unchanged sentence

our business involves connecting life science companies to patients and providers.

We have a common customer base for all of our

solution, which are primarily all communications with healthcare providers or patients on behalf of life science customers.

customers are geographically located in the U.S although we have two technology centers located internationally.

We do not prepare

separate internal income statements by solution as our focus is on selling enterprise arrangements covering multiple solutions

that span the entire patient journey with a specific brand.

We have a common customer base for all of our solutions,

which are primarily all communications with healthcare providers or patients on behalf of life science customers.

Our customers are geographically

located in the U.S although we have two technology centers located internationally.

We do not prepare separate internal income statements

by solutions as our focus is on selling enterprise arrangements covering multiple solutions that span the entire patient journey with

a specific brand.

Recently Issued Accounting Guidance

In June 2016, the Financial Accounting

Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit

Losses on Financial Instruments.

ASU 2016-13 provides for a new impairment model that requires measurement and recognition of expected

credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable and available

for sale debt securities.

ASU 2016-13 was effective for the Company on January 1, 2020.

The adoption of this standard did not have

a material effect on our financial position, results of operations, or cash flows.

In August 2019, the FASB issued ASU 2018-13,

Fair Value Measurement (Topic 820):

Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.

2018-13 modifies the disclosure requirements on fair value measurements and became effective for the Company on January 1, 2020.

The adoption of this standard did not have a material effect on our financial position, results of operations, or cash flows.

In January 2017, the FASB issued ASU 2017-04,

Intangibles-Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment.

ASU 2017-04 simplifies the subsequent

measurement of goodwill by eliminating the second step of the goodwill impairment test.

The second step measures a goodwill impairment

loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.

ASU 2017-04, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its

ASU 2017-04 will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal

years beginning after December 15, 2019.

Early adoption is permitted for interim or annual goodwill impairment tests performed

on testing dates after January 1, 2017.

The adoption of this standard did not have a material effect on our financial position,

results of operations, or cash flows.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

Not Yet Adopted

In December 2019, the FASB issued ASU No.

3 unchanged sentences

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

15, 2020, with early adoption permitted.

The adoption of this standard is not expected to have a material effect on our financial

position, results of operations, or cash flows.

NOTE 3 –

On October 4, 2019, we acquired RMDY Health,

(“RMDY”), a Delaware corporation and technology solutions company engaged in developing and marketing digital

health SAAS solutions across a range of healthcare and life science initiatives, used by pharmaceutical companies, payers, medtech

companies, and medical associations nationwide to improve medication adherence and care coordination.

The total purchase price

was $17,822,162.

Acquisition costs of approximately $799,623 were expensed as incurred.

The purchase price contains a contingent

element that will be paid only if the Company achieves certain revenues related to the legacy RMDY business in 2020 and 2021.

total contingent payment may be up to $30.0 million, with a minimum payment of $1.0 million each year.

The contingent payment was

paid in 2020.

No remaining liability exists at December 31, 2020.

The purchase price of the RMDY acquisition

was allocated as follows:

Purchase Price

Common stock issued

Contingent payment

Current assets

Accounts receivable

Prepaid Expense

Property and equipment

Goodwill, including assembled workforce in place

Web technology

Non-compete agreements

Customer relationships

Current liabilities assumed

Accounts payable

Accrued expenses

Deferred tax liability

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies

and amends existing guidance.

ASU 2019-12 was effective for us as of January 1, 2021 The adoption of this standard did not have a material

effect on our financial position, results of operations, or cash flows.

Not Yet Adopted

ASU Topic 2021-08 Business Combinations (Topic

805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract

liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with

ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts.

The standard is effective for the Company's fiscal

year beginning January 1, 2023, with early adoption permitted.

The Company is currently evaluating the effect of this pronouncement on

its Consolidated Financial Statements, but it is not expected to have a material impact.

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 3 –

ACQUISITIONS (continued)

As described in greater detail in Note

6, the amortizable intangible assets acquired have estimated useful lives ranging from 2 to 15 years.

We determined the estimated

fair value of the identifiable intangible assets acquired primarily by using the income approach.

As of December 31, 2019, $800,000 was included

in accrued expenses as part of an indemnification provision against potential future claims.

This balance was paid via the issuance

of common stock during the year ended December 31, 2020.

We began consolidating the results of RMDY

operations and cashflows after October 3, 2019, the date of that acquisition.

The unaudited Pro forma results of operations as

the acquisition had occurred January 1, 2019 are presented in the following table:

Loss per common share:

NOTE 4 –

PREPAID EXPENSES

Prepaid expenses consisted of the following

as of December 31, 2020 and 2019:

NOTE 3 – PREPAID EXPENSES

Prepaid expenses consisted of the following as

of December 31, 2021 and 2020:

Prepaid revenue share and exclusivity payments

1 unchanged sentence

Total prepaid expenses

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020

NOTE 5 –

PROPERTY AND EQUIPMENT

The Company owned equipment recorded at

cost, which consisted of the following as of December 31, 2020 and 2019:

NOTE 4 – PROPERTY AND EQUIPMENT

The Company owned equipment recorded at cost,

which consisted of the following as of December 31, 2021 and 2020:

Computer equipment

4 unchanged sentences

for the years ended December 31, 2021 and 2020, respectively.

NOTE 6 –

INTANBIGLE ASSETS

The goodwill is related to the acquisition

of RMDY Health, Inc.

in 2019 and CareSpeak Communications in 2018 and is primarily related to expected improvements and technology

performance and functionality, sales growth from future solutions and service offerings and new customers, together with certain

intangible assets that do not qualify for separate recognition, such as the assembled workforce in place.

Goodwill is generally

not amortizable for tax purposes and is not amortizable for financial statement purposes.

NOTE 5 – INTANBIGLE ASSETS

Our goodwill is related to the acquisitions of

RMDY Health, Inc.

in 2019 and CareSpeak Communications in 2018.

Goodwill is generally not amortizable for tax purposes and is not amortizable

for financial statement purposes.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 5 – INTANBIGLE ASSETS (CONTINUED)

Intangible Assets

Intangible assets included on the consolidated

balance sheet consist of the following:

balance sheets consist of the following:

December 31, 2021

5 unchanged sentences

Total Intangibles

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

NOTE 6 –

INTANBIGLE ASSETS (CONTINUED)

December 31, 2019

Patent rights

4 unchanged sentences

Total Intangibles

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 5 – INTANBIGLE ASSETS (CONTINUED)

Intangibles are being amortized on a straight-line

basis over the following estimated useful lives.

15 – 17 years

Non-compete agreements

1 unchanged sentence

Technology assets

The Company recorded amortization expense

of $1,875,882 and $1,094,924 in the years ended December 31, 2020 and 2019, respectively.

Expected future amortization expenses

of the intangibles assets as of December 31, 2020 is as follows:

The Company recorded amortization expense of $ 1,859,965

and $ 1,875,882 in the years ended December 31, 2021 and 2020, respectively.

Expected future amortization expenses of the intangibles assets

as of December 31, 2021 is as follows:

Year ended December 31,

In addition to the technology assets acquired

in connection with the RMDY acquisition, the Company also acquired software with a cost of $1.5 million in 2019.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020

NOTE 7 –

DEFERRED REVENUE

The Company has several signed contracts

with customers for the distribution of financial messaging, or other services, which include payment in advance.

The payments are

not recorded as revenue until the revenue is earned under its revenue recognition policy discussed in Note 2.

Deferred revenue

was $285,795 and $580,014 as of December 31, 2020 and 2019, respectively.

These contracts are all short term in nature and

all revenue is expected to be recognized within 12 months, or less.

Following is a summary of activity in the deferred revenue

account for the year ended December 31, 2020.

NOTE 6 – DEFERRED REVENUE

The Company has several signed contracts with

customers for the distribution of financial messaging, or other services, which include payment in advance.

The payments are not recorded

as revenue until the revenue is earned under its revenue recognition policy discussed in Note 2.

Deferred revenue was $ 1,389,908 and $ 285,795

as of December 31, 2021 and 2020, respectively.

These contracts are all short term in nature and all revenue is expected to be recognized

within 12 months, or less.

Following is a summary of activity in the deferred revenue account for the year ended December 31, 2021.

Balance January 1, 2021

3 unchanged sentences

Balance December 31, 2021

NOTE 8 –

RELATED PARTY TRANSACTIONS

During the year ended December 31,

2010, the Company acquired the technical contributions and assignment of all exclusive rights to and for a key patent in process

at the time from a former CEO in exchange for a total payment in shares of common stock and options valued at $930,000 at the time

of the acquisition, and recorded the patent at that cost.

That patent remains in Patents on the consolidated balance sheet as of

December 31, 2020.

NOTE 9 –

CONTINGENT PURCHASE PRICE

Our purchase of CareSpeak Communications

contained a contingent element that would be paid only if the Company achieved certain patient engagement revenues in 2019 and

The total contingent payment could have been up to $3.0 million.

The target patient engagement revenues were achieved in

both 2019 and in 2020.

The calculated fair value of the contingent payment was $3,000,000 at December 31, 2019 and $1,610,813 at

Following is a summary of activity in the deferred

revenue account for the year ended December 31, 2020.

Balance January 1, 2020

Revenue recognized

( 16,260,166 )

Amount collected

Balance December 31, 2020

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 7 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2010,

the Company acquired the technical contributions and assignment of all exclusive rights to and for a key patent in process at the time

from a former CEO in exchange for a total payment in shares of common stock and options valued at $ 930,000 at the time of the acquisition

and recorded the patent at that cost.

That patent remains in Patents on the consolidated balance sheet as of December 31, 2021.

Jim Lang, one of our Board Members, is the CEO

of Eversana, a leading global provider of services to the life sciences industry.

Eversana is similar to other customers we generate revenue

from, such as agencies or resellers.

During the year ended December 31, 2021, we have recognized $ 218,333 in revenue from contracts engaged

with Eversana.

No revenues were recognized in 2020 related to contracts with Eversana.

These contracts were sourced by Eversana on behalf

of life science customers of theirs.

The contracts are at market rates and were generated in the normal course of business.

NOTE 8 – CONTINGENT PURCHASE PRICE

Our purchase of CareSpeak Communications contained

a contingent element that would be paid only if the Company achieved certain patient engagement revenues in 2019 and 2020.

The total contingent

payment could have been up to $ 3.0 million.

The target patient engagement revenues were achieved in both 2019 and in 2020.

The calculated

fair value of the contingent payment was $ 3,000,000 at December 31, 2019 and $ 1,610,813 at December 31, 2020.

The final required payment

was made in 2021.

Our purchase of RMDY Health, Inc.

also contained a contingent

element that would be paid only if the Company achieves certain revenues in 2020 and 2021 related to the RMDY business.

contingent payment may be up to $30.0 million.

also contained

a contingent element that would be paid only if the Company achieves certain revenues in 2020 and 2021 related to the RMDY business.

total contingent payment could have been up to $ 30.0 million.

The minimum payment was $ 1.0 million in each of the two years.

The calculated fair

value of the contingent payment was $3,720,000 at December 31, 2019.

The calculated

fair value of the contingent payment was $ 3,720,000 at December 31, 2019.

We determined the fair value of the Contingent Purchase Price

Payable at December 31, 2019 using a Geometric-Brownian motion analysis of the expected revenue and resulting earnout payment using

inputs that include the spot price, a risk free rate of return of 1.4%, a term of 1-2 years, and volatility of 40%.

we reached agreement with the former shareholders of RMDY to fix the liability at $3.75 million, payable in a combination of cash

Because of the change in the share price between the date of agreement and the date of payment, the amount recorded

for the stock amount varied from the agreed amount.

The liability was paid $3.0 million in cash and the remainder in the common

The total fair value of contingent purchase

price payable at December 31, 2020 is as follows.

Payable at December 31, 2019 using a Geometric-Brownian motion analysis of the expected revenue and resulting earnout payment using inputs

that include the spot price, a risk free rate of return of 1.4 %, a term of 2 years, and volatility of 35 %.

During 2020, we reached agreement

with the former shareholders of RMDY to fix the liability at $ 3.75 million, payable in a combination of cash and stock.

Because of the

change in the share price between the date of agreement and the date of payment, the amount recorded for the stock amount varied from

the agreed amount.

The liability was paid in full during 2020 and was paid with a $ 3.0 million cash payment and the remainder in shares

of common stock.

There was no contingent purchase price payable

at December 31, 2021.

The total fair value of contingent purchase price

payable at December 31, 2020 is as follows.

CareSpeak Communications, Inc.

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DECEMBER 31, 2021

NOTE 10 –

STOCKHOLDERS’

NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company has 10,000,000 shares of preferred

stock, $.001 par value per share, authorized as of December 31, 2020.

001 par value per share, authorized as of December 31, 2021.

No shares were issued or outstanding in either 2020 or 2021.

The Company had 166,666,667 shares of common

stock, $.001 par value per share, authorized as of December 31, 2020.

There were 15,223,340 and 14,600,579 shares of common stock

issued and outstanding at December 31, 2020 and 2019, respectively.

During 2019, in an underwritten public

offering, we issued 1,769,275 shares of our common stock for gross proceeds of $23,000,575.

In connection with this transaction,

we incurred equity issuance costs of $1,696,749 related to payments to the underwriter, advisors and legal fees associated with

the transaction, resulting in net proceeds to the Company of $21,303,826.

The Company has a Director Compensation

plan covering its independent non-employee Directors.

A total of 28,809 and 33,344 shares were granted and issued in the years

ended December 31, 2020 and 2019, respectively, in connection with this compensation plan.

The Company had 166,666,667 shares of common stock,

001 par value per share, authorized as of December 31, 2021.

There were 17,860,975 and 15,223,340 shares of common stock issued and

outstanding at December 31, 2021 and 2020, respectively.

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 .

The Company had a Director Compensation plan covering

its independent non-employee Directors that was in effect through June 30, 2021.

A total of 4,730 and 28,809 shares were granted and issued

in the years ended December 31, 2021 and 2020, respectively, in connection with this compensation plan.

These shares were valued at $ 250,085

and $ 450,124 , respectively.

We issued 414,705 shares of common stock

and received proceeds of $2,488,394 in 2020 in connection with the exercise of options.

We also issued 246,448 shares of common

stock and received proceeds of $877,702 in 2019 in connection with the exercise of options.

During 2019, we issued 382,893 shares of

common stock, valued at $5,107,793, to the former shareholders of RMDY Health, Inc.

in connection with the acquisition of RMDY

We also issued 94,501 shares of common stock in 2020, valued at $1,657,548 to the former shareholders of RMDY Health,

in connection with the escrow holdback from the initial transaction and finalization of the earnout amount due.

We adopted the new lease accounting standard

ASC 842 as of January 1, 2019, which resulted in a charge of $3,229 to Retained Earnings on that date.

The plan was changed to grant restricted stock units under the Company’s 2021 Equity compensation plan

and those grants are reflected in the information in Note 10.

We issued 1,105,822 shares of common stock and

received proceeds of $ 4,864,231 in 2021 in connection with the exercise of options.

We also issued 414,705 shares of common stock and

received proceeds of $ 2,488,394 in 2020 in connection with the exercise of options.

We issued 3,333 shares of common stock in 2021

and 84,746 shares of common in stock in 2020 in connection with the vesting of restricted stock units and discussed in greater detail

in Note 10, Stock Compensation.

NOTE 10 – STOCK COMPENSATION

The Company sponsors two stock-based incentive

compensation plans.

The first plan is known as the 2013 Incentive

Plan (the “2013 Plan”) and was established by the Board of Directors of the Company in June 2013.

The 2013 Plan, as amended,

authorized the issuance of 3,000,000 shares of Company common stock.

The amended plan was approved by shareholders.

A total of 671,011

shares of common stock underlying options and 145,550 shares of common stock underlying restricted stock unit awards were outstanding

at December 31, 2021.

In connection with the adoption of a new plan in 2021, the Company froze the 2013 Plan.

At December 31, 2021, there

were no shares available for grant under the 2013 Plan.

In 2021, the Company adopted a new plan known

as the 2021 Equity Incentive Plan (“2021 Plan”).

The plan was established by the Board of Directors and approved by shareholders

in August 2021.

A total of 2,500,000 shares are authorized for issuance under the 2021 Plan.

A total of 112,536 shares of common stock

underlying options and 254,188 shares of common stock underlying restricted stock unit awards were outstanding at December 31, 2021.

December 31, 2021, 2,133,276 shares were available for grant under the 2021 Plan.

OPTIMIZERx CORPORATION

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DECEMBER 31, 2021

NOTE 11 –

STOCK COMPENSATION

The Company sponsors a stock-based incentive

compensation plan known as the 2013 Equity Compensation Plan (the “Plan”), which was established by the Board of Directors

of the Company in June 2013.

The Plan was amended several times since then to eventually increase the authorized shares to 3,000,000

as of December 31, 2020.

The amended plan has been approved by shareholders.

A total of 1,545,518 shares of common stock underlying

options and 100,000 shares of common stock underlying restricted stock awards were outstanding at December 31, 2020.

had 299,461 remaining shares available to grant under the Plan at December 31, 2020.

NOTE 10 – STOCK COMPENSATION (CONTINUED)

The 2021 Plan allows the Company to grant incentive

stock options, non-qualified stock options, stock appreciation rights, or restricted stock.

The incentive stock options are exercisable

for up to ten years, at an option price per share not less than the fair market value on the date the option is granted.

The incentive

stock options are limited to persons who are regular full-time employees of the Company at the date of the grant of the option.

Non-qualified options may be granted to any person, including, but not limited to, employees, independent agents, consultants and

attorneys, who the Company’s Board or Compensation Committee believes have contributed, or will contribute, to the success

of the Company.

Non-qualified options may be issued at option prices of less than fair market value on the date of grant and may

be exercisable for up to ten years from date of grant.

The option vesting schedule for options granted is determined by the Compensation

Committee of the Board of Directors at the time of the grant.

The Plan provides for accelerated vesting of unvested options if

there is a change in control, as defined in the Plan.

The compensation cost that has been charged

against income related to options for the years ended December 31, 2020 and 2019, was $1,884,202 and $1,687,745, respectively.

No income tax benefit was recognized in the income statement and no compensation was capitalized in any of the years presented.

stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and

other stock-based awards.

Incentive stock options may only be granted to persons who are regular full-time employees of the Company at

the date of the grant of the option.

Non-qualified options may be granted to any person, including, but not limited to, directors, officers,

employees and consultants, who the Company’s Board or Compensation Committee determines.

The exercise price of options granted under

the 2021 Plan must be equal to at least 100 % of the fair market value of our common stock as of the date of the grant of the option.

granted under the 2021 Plan are exercisable as determined by the Compensation Committee and specified in the applicable award agreement.

In no event will an option be exercisable after ten years from the date of grant.

The compensation cost that has been charged against

income related to options for the years ended December 31, 2021 and 2020, was $ 2,709,781 and $ 1,884,202 , respectively.

No income tax benefit

was recognized in the consolidated statements of income and no compensation was capitalized in any of the years presented.

The Company had the following option activity

during the year ended December 31, 2020:

Outstanding, January 1, 2019

during the year ended December 31, 2021 and 2020:

Number of Options

Weighted average exercise price

Weighted average remaining contractual life (years)

Aggregate intrinsic

Outstanding at January 1, 2020

Expired or forfeited

Outstanding at December 31, 2020

( 1,137,065 )

Expired or forfeited

1 unchanged sentence

Exercisable, December 31, 2021

The exercise price of outstanding options ranges from

$2.46 per share to $28.48 per share.

A summary of the status of the Company’s nonvested options

as of December 31, 2020, and changes during the year ended December 31, 2020, is presented below.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 10 – STOCK COMPENSATION (CONTINUED)

The table below reflects information for the total options outstanding

at December 31, 2021

Range of Exercise Prices

Number of Options

Weighted average remaining contractual life (years)

Weighted average exercise price

$ 2.46 to $ 10.00

$10,00 to $20.00

$ 20.00 to $ 40.00

$ 40.00 to $ 60.00

$ 60.00 to $ 96.70

The table below reflects information for the vested options outstanding

at December 31, 2021.

Range of Exercise Prices

Number of Options

Weighted average remaining contractual life (years)

Weighted average exercise price

$ 2.46 to $ 10.00

$10,00 to $20.00

$ 20.00 to $ 40.00

$ 40.00 to $ 60.00

$ 60.00 to $ 96.70

A summary of the status of the Company’s nonvested options as

of December 31, 2021, and changes during the year ended December 31, 2021, is presented below.

Nonvested Options

Weighted-Average

Exercise Price

Weighted-Average Exercise Price

Nonvested at January 1, 2021

Nonvested at December 31, 2021

There is $1,787,888 of expense remaining

to be recognized over a period of approximately 2.5 years related to options outstanding at December 31, 2020.

The Company granted restricted stock awards

of 94,746 and 90,000 shares in 2020 and 2019, respectively, and valued at $850,985 and $938,700, respectively.

These awards vest

over a period of 1 to 5 years.

The Company recognized expense of $838,514 and $125,160 in 2020 and 2019, respectively related to

A total of $826,010 remains to be recognized at December 31, 2020 over a period of 3.2 years.

Restricted Stock Awards

Weighted-Average

There is $ 9,685,867 of expense remaining to be

recognized over a period of approximately 2.4 years related to options outstanding at December 31, 2021.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 10 – STOCK COMPENSATION (CONTINUED)

The Company had the following restricted stock

unit (“RSU”) activity during the years ended December 31, 2021 and 2020:

Number of RSUs

Grant date fair value

Weighted average remaining contractual life (years)

Outstanding at January 1, 2020

Vested and issued

Shares issued

Outstanding at December 31, 2020

Shares issued

Outstanding at December 31, 2021

The Company granted restricted stock units of

303,556 and 94,746 units in 2021 and 2020, respectively, and valued at $ 20,125,861 and $ 850,985 , respectively.

These restricted stock

units vest over a period of 1.6 to 5 years.

The Company recognized expense of $ 2,532,091 and $ 838,514 in 2021 and 2020, respectively,

related to these restricted stock units.

A total of $ 18,389,797 remains to be recognized at December 31, 2021 over a period of 3.0 years.

Of the restricted stock units issued in

2021, 182,938 are market-based awards that vest if the Company’s stock price hits certain price targets and maintains that

price for 30 days.

A total of 60,191, 60,191, and 62,016 units vest if the stock price hits $98.87, $131.82, $164.78, respectively.

As described in Note 2, these market-based restricted stock units were valued using a Monte Carlo simulation model, with expected

vesting in 1.6, 2.25, and 2.71 years, respectively, for the three price targets.

NOTE 11 – LEASES

In February 2016, the Financial Accounting Standards

Board (“FASB”) issued new accounting guidance on leases.

The accounting standard, effective January 1, 2019, requires virtually

all leases to be recognized on the balance sheet.

Under the guidance, we have elected not to separate lease and non-lease components in

recognition of the lease-related assets and liabilities, as well as the related lease expense.

We have operating leases with terms greater than

12 months for office space in three multitenant facilities, which are recorded as assets and liabilities.

The lease on our headquarters

space in Rochester, Michigan expires November 30, 2023 , with a renewal option through 2025, with monthly rent payable at rates ranging

from $ 6,384 to $ 6,688 .

We have assumed renewal of the lease.

We also have a lease on office space in Cranbury, New Jersey, which expired

in January 2022 with a monthly payment of $3,158, as well as a lease of approximately $1,883 per month in Zagreb, Croatia expiring in

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 12 –

In February 2016, the Financial Accounting

Standards Board (“FASB”) issued new accounting guidance on leases.

The accounting standard, effective January 1, 2019,

requires virtually all leases to be recognized on the balance sheet.

Effective January 1, 2019, we adopted the standard using the

modified retrospective method, under which we elected the package of practical expedients and transition provisions allowing us

to bring our existing operating leases onto the consolidated balance sheet without adjusting comparative periods, but recognizing

a cumulative-effect adjustment to the opening balance of accumulated deficit on January 1, 2019.

Under the guidance, we have also

elected not to separate lease and non-lease components in recognition of the lease-related assets and liabilities, as well as the

related lease expense.

We have operating leases with terms greater

than 12 months for office space in three multitenant facilities, which are recorded as assets and liabilities.

The lease on our

headquarters space in Rochester, Michigan expires November 30, 2022, with a three-year renewal option through 2025, with monthly

rent payable at rates ranging from $6,384 to $6,688.

We have assumed renewal of the lease.

We also have a lease on office space

in Cranbury, New Jersey, expiring in 2022 with monthly payments ranging from $3,008 to $3,158, as well as a lease of approximately

$1,883 per month in Zagreb, Croatia expiring in 2022.

NOTE 11 – LEASES (CONTINUED)

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.

Operating lease expense is recognized

on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.

Upon adoption of the standard on January

1, 2019, we recorded approximately $462,000 of right of use assets and $465,000 of lease-related liabilities, with the difference

recorded in accumulated deficit as the cumulative effect of change in accounting principle at that date.

For the year ended December 31, 2020, the

Company’s lease cost consisted of the following components, each of which is included in operating expenses within the Company’s

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.

Operating lease expense is recognized on a straight-line basis

over the lease term, while variable lease payments are expensed as incurred.

For the years ended December 31, 2021 and 2020,

the Company’s lease cost consisted of the following components, each of which is included in operating expenses within the Company’s

consolidated statements of operations:

2 unchanged sentences

Total lease cost

(1) Short-term lease cost includes any

lease with a term of less than 12 months.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020

NOTE 12 –

LEASES (CONTINUED)

The table below presents the future minimum

lease payments to be made under operating leases as of December 31, 2020:

(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 December 31, 2021:

For the year ending December 31,

1 unchanged sentence

Total lease liabilities

The weighted average remaining lease term

for operating leases is 4.3 years and the weighted average discount rate used in calculating the operating lease asset and liability

The weighted average remaining lease term for

operating leases is 3.6 years and the weighted average discount rate used in calculating the operating lease asset and liability is 4.5 %.

Cash paid for amounts included in the measurement of lease liabilities was $ 124,919 .

For the year ended December 31, 2020,

payments on lease obligations were $138,019 and amortization on the right of use assets was $104,805.

For the year ended December

31, 2019, payments on lease obligations were $132,867 and amortization on the right of use assets was $107,656.

NOTE 13 –

MAJOR CUSTOMERS AND VENDORS

The Company had the following customers

that accounted for 10% or greater of revenue in either 2020 or 2019.

No other customers accounted for more than 10% of revenue

in either year presented.

For the year ended December 31, 2021, payments on

lease obligations were $ 142,284 and amortization on the right of use assets was $ 121,129 .

For the year ended December 31, 2020, payments

on lease obligations were $ 138,019 and amortization on the right of use assets was $ 104,805 .

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 13 –

MAJOR CUSTOMERS AND VENDORS (CONTINUED)

Our accounts receivable includes 4 entities,

included agencies that represent multiple customers that individually make up more than 10% of our accounts receivable at December

31, 2020 in the percentages of 19.7%, 16.2%, 15.8% and 14.4%.

The Company generates its revenues through

its EHR and ePrescribe partners.

It had two key partners and/or vendors through which 10% or greater of its revenue was generated

in either 2020 or 2019 as set forth below.

The amounts in the table below reflect the amount of revenue generated through those

NOTE 14 –

As of December 31, 2020, the Company had

net operating loss carry-forwards for federal income tax purposes of approximately $19.3 million, consisting of pre-2018 losses

in the amount of approximately $13.3 million that expire from 2020 through 2037, and post-2017 losses in the amount of approximately

$6 million that never expire.

NOTE 12 – MAJOR CUSTOMERS AND VENDORS

The Company had the following customers that accounted

for 10 % or greater of revenue in either 2021 or 2020.

No other customers accounted for more than 10 % of revenue in either year presented.

Our accounts receivable included 2 agencies that

represented multiple customers that individually made up more than 10 % of our accounts receivable at December 31, 2021 in the percentages

of 33.5 % and 12.2 %.

As of December 31, 2020, our accounts receivable included 4 entities, including agencies that represented multiple

customers that individually made up more than 10 % of our accounts receivable in the percentages of 19.7 %, 16.2 %, 15.8 % and 14.4 %.

The Company generates its revenues through its

EHR and ePrescribe partners.

It had two key partners and/or vendors through which 10 % or greater of its revenue was generated in either

2021 or 2020 as set forth below.

The amounts in the table below reflect the amount of revenue generated through those partners.

NOTE 13 – INCOME TAXES

As of December 31, 2021, the Company had net operating

loss carry-forwards for federal income tax purposes of approximately $26.4 million, consisting of pre-2018 losses in the amount of approximately

$13.2 million that expire from 2021 through 2037, and post-2017 losses in the amount of approximately $13.2 million that will never expire.

These net operating losses are available to offset future taxable income.

The Company was formed

in 2006 as a limited liability company and changed to a corporation in 2007.

Activity prior to incorporation is not reflected in

the Company’s corporate tax returns.

In the future, the cumulative net operating loss carry-forward for income tax purposes

may differ from the cumulative financial statement loss due to timing differences between book and tax reporting.

The Company was formed in 2006 as a limited liability company

and changed to a corporation in 2007.

Activity prior to incorporation is not reflected in the Company’s corporate tax returns.

the future, the cumulative net operating loss carry-forward for income tax purposes may differ from the cumulative financial statement

loss due to timing differences between book and tax reporting.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 13 – INCOME TAXES (CONTINUED)

The provision for Federal income tax consists

2 unchanged sentences

Current operations

Acquisition costs

State tax effect, net of federal benefit

State rate change

Change in fair value of contingent consideration

Option exercise benefits, net of Section 162M limitations

Other permanent items

Deferred adjustment

Other adjustments

1 unchanged sentence

Valuation allowance

( 3,006,000 )

Net provision for federal income tax

3 unchanged sentences

Total tax benefit (expense) on income

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020

NOTE 14 –

INCOME TAXES (CONTINUED)

The cumulative tax effect of significant

6 unchanged sentences

Deferred tax liabilities attributable to:

$ ( 2,490,000 )

$ ( 2,181,000 )

Operating lease right of use assets

2 unchanged sentences

$ ( 2,291,000 )

Net deferred tax asset

Valuation allowance

1 unchanged sentence

( 2,257,000 )

Net deferred tax asset

The ultimate realization of deferred tax

assets is dependent upon the Company’s ability to generate sufficient taxable income during the periods in which the net

operating losses expire and the temporary differences become deductible.

The Company has determined that there is significant uncertainty

that the results of future operations and the reversals of existing taxable temporary differences will generate sufficient taxable

income to realize the deferred tax assets;

therefore, a valuation allowance has been recorded.

In making this determination, the

Company considered historical levels of income, projections for future periods, and the significant amount of tax deductions to

be generated from the future exercise of stock options.

The tax years 2017 to 2020 remain open

for potential audit by the Internal Revenue Service.

There are no uncertain tax positions as of December 31, 2019 or December 31,

2020, and none are expected in the next 12 months.

The Company’s foreign subsidiaries are cost centers that are primarily

reimbursed for expenses, as a result they generate an immaterial amount of income or loss.

Pretax book income (loss) is all from

domestic operations.

Up to four years of returns remain open for potential audit in foreign jurisdictions, however any audits for

periods prior to ownership by the Company are the responsibility of the previous owners.

Under certain circumstances issuance of

common shares can result in an ownership change under Internal Revenue Code Section 382, which limits the Company’s ability

to utilize carry-forwards from prior to the ownership change.

Any such ownership change resulting from stock issuances and redemptions

could limit the Company’s ability to utilize any net operating loss carry-forwards or credits generated before this change

in ownership.

These limitations can limit both the timing of usage of these laws, as well as the loss of the ability to use these

net operating losses.

It is likely that fundraising activities have resulted in such an ownership change.

Net deferred tax asset, net of valuation allowance

OPTIMIZERx CORPORATION

1 unchanged sentence

DECEMBER 31, 2021

NOTE 15 –

COMMITMENTS AND CONTINGENT LIABILITIES

The Company is not involved in any legal

NOTE 13 – INCOME TAXES (CONTINUED)

The ultimate realization of deferred tax assets

is dependent upon the Company’s ability to generate sufficient taxable income during the periods in which the net operating losses

expire and the temporary differences become deductible.

The Company has determined that there is significant uncertainty that the results

of future operations and the reversals of existing taxable temporary differences will generate sufficient taxable income to realize the

deferred tax assets;

therefore, a valuation allowance has been recorded.

In making this determination, the Company considered historical

levels of income, projections for future periods, and the significant amount of tax deductions to be generated from the future exercise

of stock options.

The tax years 2018 to 2021 remain open for potential

audit by the Internal Revenue Service.

There are no uncertain tax positions as of December 31, 2020 or December 31, 2021, and none are

expected in the next 12 months.

The Company’s foreign subsidiaries are cost centers that are primarily reimbursed for expenses,

as a result they generate an immaterial amount of income or loss.

Pretax book income (loss) is all from domestic operations.

years of returns remain open for potential audit in foreign jurisdictions, however any audits for periods prior to ownership by the Company

are the responsibility of the previous owners.

Under certain circumstances issuance of common

shares can result in an ownership change under Internal Revenue Code Section 382, which limits the Company’s ability to utilize

carry-forwards from prior to the ownership change.

Any such ownership change resulting from stock issuances and redemptions could limit

the Company’s ability to utilize any net operating loss carry-forwards or credits generated before this change in ownership.

limitations can limit both the timing of usage of these laws, as well as the loss of the ability to use these net operating losses.

is likely that fundraising activities have resulted in such an ownership change.

NOTE 14 – COMMITMENTS AND CONTINGENT LIABILITIES

The Company is not involved in any legal proceedings.

Revenue-share contracts

The Company has contacts with various

electronic health records systems and ePrescribe platforms, whereby we agree to share a portion of the revenue we generate

for eCoupons distributed through their networks.

These contracts grant audit rights related to the payments to our partners,

and, in some cases would require us to pay for the audit if the audit determined there was an underpayment and the

underpayment meets certain thresholds, such as 10%.

From time to time the Company enters into arrangements with a partner to

acquire minimum amounts of messaging capabilities.

As of December 31, 2020, the Company had commitments for future minimum

payments of $7.5 million that will be reflected in cost of revenues during the years from 2021 through 2022.

Minimum payments

are due in 2021 and 2022, in the amounts of $6.25 million and $1.5 million, respectively.

NOTE 16 –

RETIREMENT PLAN

The Company sponsors a defined contribution

401(k) profit sharing plan which was adopted in December 2015, effective in January 2016.

Under the terms of the plan, the Company

matches 100% of the first 3% of payroll contributed by the employee and 50% of the next 2% of payroll contributed by the employee

to a maximum of 4% of an employee’s payroll.

There was expense of $373,027 and $126,557 recorded in 2020 and 2019, respectively,

for company contributions to the plan.

NOTE 17 –

SUBSEQUENT EVENTS

During February 2021, in an underwritten

public 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 $4,744,652 related to payments to the underwriter, advisors, legal fees, and other costs associated

with the transaction, resulting in net proceeds to the Company of approximately $70,680,973.

In 2021, the Company issued 59,547 shares and

received proceeds of $495,288 in connection with the exercise of options.

In March 2021, the Company’s Board of Directors

amended the 2013 Equity Compensation Plan to increase the number of shares authorized under the plan to 6.0 million shares.

Changes In and Disagreements with Accountants on

Accounting and Financial Disclosure

On June 22, 2020, the Company engaged UHY LLP as the Company’s

independent registered public accounting firm and dismissed Marcum LLP as the Company’s independent registered public accounting

There were no disagreements or reportable events required to be disclosed under Item 304(b) of Regulation S-K.

The Company has contracts with various electronic

health records systems and ePrescribe platforms, whereby we agree to share a portion of the revenue we generate for eCoupons distributed

through their networks.

These contracts grant audit rights related to the payments to our partners, and, in some cases would require us

to pay for the audit if the audit determined there was an underpayment and the underpayment meets certain thresholds, such as 10 %.

time to time the Company enters into arrangements with a partner to acquire minimum amounts of messaging capabilities.

As of December

31, 2021, the Company had commitments for future minimum payments of $ 3.4 million that will be reflected in cost of revenues during the

years from 2022 through 2023.

Minimum payments are due in 2022 and 2023, in the amounts of $ 2.65 million and $ 0.75 million, respectively.

NOTE 15 – RETIREMENT PLAN

The Company sponsors a defined contribution 401(k)

profit sharing plan which was adopted in December 2015, effective in January 2016.

Under the terms of the plan, the Company matches 100%

of the first 3% of payroll contributed by the employee and 50% of the next 2% of payroll contributed by the employee to a maximum of 4%

of an employee’s payroll.

There was expense of $ 343,221 and $ 373,027 recorded in 2021 and 2020, respectively, for the Company’s

contributions to the plan.

Changes In and Disagreements with Accountants on Accounting

and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data