OptimizeRx Corp 10-Q

Item 1. Financial Statements Our condensed consolidated financial statements included in this Form 10-Q are as follows: 2 Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 (unaudited); 3 Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 (unaudited); 4 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021 (unaudited); 6 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 (unaudited); 7 Notes to Condensed Consolidated Financial Statements (unaudited). 1 OPTIMIZERX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2022 December 31, 2021 ASSETS Current Assets Cash and cash equivalents $ 87,392,970 $ 84,681,770 Accounts receivable, net 18,732,849 24,800,585 Prepaid expenses and other 4,280,843 5,630,655 Total Current Assets 110,406,662 115,113,010 Property and equipment, net 143,337 143,818 Other Assets Goodwill 22,673,820 14,740,031 Intangible assets, net 13,933,072 10,646,654 Right of use assets, net 278,513 328,820 Security deposits and other assets 12,860 12,859 Total Other Assets 36,898,265 25,728,364 TOTAL ASSETS $ 147,448,264 $ 140,985,192 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable – trade $ 1,296,041 $ 606,808 Accrued expenses 1,638,791 2,902,836 Revenue share payable 2,376,836 4,378,216 Current portion of lease obligations 87,673 90,982 Deferred revenue 1,041,919 1,389,907 Total Current Liabilities 6,441,260 9,368,749 Non-Current Liabilities Lease liabilities, net of current portion 189,802 236,726 Total Liabilities 6,631,062 9,605,475 Commitments and contingencies (See note 9) — — Stockholders’ Equity Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2022 and December 31, 2021 — — Common stock, $ 0.001 par value, 166,666,667 shares authorized, 18,174,182 and 17,860,975 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively 18,188 17,861 Treasury stock ( 13 ) — Additional paid-in-capital 183,698,497 166,615,514 Accumulated deficit ( 42,899,470 ) ( 35,253,658 ) Total Stockholders’ Equity $ 140,817,202 $ 131,379,717 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 147,448,264 $ 140,985,192 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Net Revenue $ 13,978,665 $ 13,625,639 $ 27,710,195 $ 24,854,850 Cost of revenues 4,988,716 5,580,964 10,618,574 10,685,567 Gross margin 8,989,949 8,044,675 17,091,621 14,169,283 Operating expenses Salaries, wages, & benefits 4,981,549 3,906,796 10,287,416 7,487,612 Stock-based compensation 4,025,323 897,038 7,199,421 1,604,191 Other general and administrative expenses 3,891,607 2,900,702 7,274,416 5,375,649 Total operating expenses 12,898,479 7,704,536 24,761,253 14,467,452 Income (Loss) from operations ( 3,908,530 ) 340,139 ( 7,669,632 ) ( 298,169 ) Other income Interest income 23,816 11,961 23,820 12,892 Income (Loss) before provision for income taxes ( 3,884,714 ) 352,100 ( 7,645,812 ) ( 285,277 ) Income tax benefit — — — — Net Income (Loss) $ ( 3,884,714 ) $ 352,100 $ ( 7,645,812 ) $ ( 285,277 ) Weighted average number of shares outstanding – basic 18,122,500 17,347,096 18,000,958 16,720,114 Weighted average number of shares outstanding – diluted 18,122,500 18,104,807 18,000,958 16,720,114 Income (loss) per share – basic $ ( 0.21 ) $ 0.02 $ ( 0.42 ) $ ( 0.02 ) Income (loss) per share – diluted $ ( 0.21 ) $ 0.02 $ ( 0.42 ) $ ( 0.02 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (UNAUDITED) Common Stock Treasury Stock Additional Paid in Accumulated Shares Amount Shares Amount Capital Deficit Total Balance January 1, 2022 17,860,975 $ 17,861 — $ — $ 166,615,514 $ ( 35,253,658 ) $ 131,379,717 Shares issued for stock options exercised 28,006 28 — — 258,100 — 258,128 Shares issued for restricted stock units vested 13,627 14 — — ( 14 ) — — Stock-based compensation expense — — — — 3,174,098 — 3,174,098 Net loss — — — — — ( 3,761,098 ) ( 3,761,098 ) Balance March 31, 2022 17,902,608 $ 17,903 — $ — $ 170,047,698 $ ( 39,014,756 ) $ 131,050,845 Shares issued for stock options exercised 43,701 44 — — 572,303 — 572,347 Shares issued for acquisition 240,741 241 — — 9,374,214 — 9,374,455 Repurchase of common stock — — ( 12,868 ) ( 13 ) ( 321,041 ) — ( 321,054 ) Stock-based compensation expense — — — — 4,025,323 — 4,025,323 Net loss — — — — — ( 3,884,714 ) ( 3,884,714 ) Balance June 30, 2022 18,187,050 $ 18,188 ( 12,868 ) $ ( 13 ) $ 183,698,497 $ ( 42,899,470 ) $ 140,817,202 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 (UNAUDITED) Common Stock Additional Paid in Accumulated Shares Amount Capital Deficit Total Balance January 1, 2021 15,223,340 $ 15,223 $ 85,590,428 $ ( 35,631,737 ) $ 49,973,914 Public offering of common shares, net of offering costs 1,523,750 1,524 70,670,012 — 70,671,536 Shares issued as board compensation 2,695 3 124,991 — 124,994 Shares issued for stock options exercised 510,803 511 1,119,500 — 1,120,011 Stock-based compensation expense — — 582,159 — 582,159 Net loss — — — ( 637,377 ) ( 637,377 ) Balance March 31, 2021 17,260,588 $ 17,261 $ 158,087,090 $ ( 36,269,114 ) $ 121,835,237 Shares issued as board compensation 2,035 2 125,089 — 125,091 Shares issued for stock options exercised 232,806 232 1,590,535 — 1,590,767 Stock-based compensation expense — — 771,947 — 771,947 Net income — — — 352,100 352,100 Balance June 30, 2021 17,495,429 $ 17,495 $ 160,574,661 $ ( 35,917,014 ) $ 124,675,142 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Six Months Ended June 30, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 7,645,812 ) $ ( 285,277 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,049,656 1,054,138 Stock-based compensation 7,199,421 1,354,106 Stock issued for board service — 250,085 Provision for loss on accounts receivable 98,727 40,000 Changes in: Accounts receivable 5,969,009 ( 88,221 ) Prepaid expenses and other assets 1,266,478 1,332,132 Accounts payable 64,232 187,211 Revenue share payable ( 2,001,379 ) ( 1,628,556 ) Accrued expenses and other liabilities ( 1,264,045 ) ( 393,778 ) Operating leases, net 74 — Deferred revenue ( 347,989 ) 33,814 NET CASH PROVIDED BY OPERATING ACTIVITIES 4,388,372 1,855,654 CASH FLOWS USED IN INVESTING ACTIVITIES: Purchase of property and equipment ( 41,335 ) ( 43,654 ) EvinceMed acquisition ( 2,000,000 ) — Purchase of intangible assets, including intellectual property rights ( 145,257 ) ( 176,822 ) NET CASH USED IN INVESTING ACTIVITIES ( 2,186,592 ) ( 220,476 ) CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: Proceeds from public offering of common stock, net of offering costs — 70,671,536 Repurchase of common stock ( 321,054 ) — Proceeds from exercise of stock options 830,474 2,710,778 Payment of contingent consideration — ( 1,610,813 ) NET CASH PROVIDED BY FINANCING ACTIVITIES 509,420 71,771,501 NET INCREASE IN CASH AND CASH EQUIVALENTS 2,711,200 73,406,679 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 84,681,770 10,516,776 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 87,392,970 $ 83,923,455 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ — $ — Reduction of EvinceMed purchase price for amounts previously paid $ 708,334 $ — Shares issued in connection with acquisition $ 9,374,455 $ — Cash paid for income taxes $ — $ — Lease liabilities arising from right of use assets $ — $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 6 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2022 NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION The accompanying condensed consolidated financial statements include OptimizeRx Corporation and its wholly owned subsidiaries (collectively, the “Company”, “we”, “our”, or “us”). We are a digital health 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. The condensed consolidated financial statements for the three and six months ended June 30, 2022 and 2021 have been prepared by us without audit pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments necessary to present fairly our financial position at June 30, 2022, and our results of operations, changes in stockholders’ equity, and cash flows for the six months ended June 30, 2022 and 2021, have been made. Those adjustments consist of normal and recurring adjustments. The condensed consolidated balance sheet as of December 31, 2021, has been derived from the audited condensed consolidated balance sheet as of that date. Certain information and note disclosures, including a detailed discussion about the Company’s significant accounting policies, normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission on February 28, 2022. The results of operations for the six months ended June 30, 2022, are not necessarily indicative of the results to be expected for the full year. NOTE 2 – NEW ACCOUNTING STANDARDS In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 is intended to improve consistent application and simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance. ASU 2019-12 is effective for annual and interim reporting periods beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard effective January 1, 2021. The adoption of this standard did not have a material effect on our financial position, results of operations, or cash flows. 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. NOTE 3 - ACQUISITIONS On April 14, 2022, we completed the acquisition of substantially all of the assets of EvinceMed Corp., a privately held leading provider of delivering end-to-end automation for specialty pharmaceutical transactions. We completed the acquisition to expand the breadth of the solutions we offer our customers, particularly where specialty medications are involved, The acquisition includes the full Market Access Management Platform for supporting pharma manufacturers, hub providers and pharmacies to improve patient access, speed to therapy and activation of affordability programs. With the EvinceMed platform, OptimizeRx is able to help patients get access to the drugs they need by simplifying the prescribing process for specialty medications, automating manual steps to determine drug eligibility and affordability, and introducing electronic enrollment and medical documentation within workflow across the OptimizeRx network of electronic health record (EHR) systems, ePrescribing platforms, and account-based marketing technologies. The consideration was comprised of $ 2.0 million in cash, the issuance of 240,741 shares of common stock valued at $ 9,374,455 , and $ 708,334 of amounts previously paid. The total purchase price was $ 12,082,788.54 . Of the 240,741 shares of common stock, 185,185 were issued at closing and 55,556 were issued but held back to secure potential adjustments to the purchase price that may result from the indemnification obligations of EvinceMed and the EvinceMed shareholder indemnitors. The holdback amount will be released twelve months from the closing, subject to any adjustments for the payment by EvinceMed and the shareholder indemnitors for its and their indemnification obligations. The purchase price was allocated to acquired technology totaling $ 4,149,000 with an estimated useful life of 8 years and the remaining $ 7,933,789 was allocated to goodwill. Goodwill represents the processes and synergies expected by integrating those processes with our own. The full amount of goodwill will be deductible for tax purposes using a fifteen year life. The increase in goodwill for the period is fully accounted for by this acquisition. We determined pro forma data was immaterial for financial reporting purposes. The initial accounting is provisional and subject to change based on the completion of formal valuations. Acquisition costs of approximately $ 19,739 were expensed as incurred. 7 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2022 NOTE 4 – REVENUES Under ASC 606, Revenue from Contracts with Customers , we record revenue when earned, rather than when billed. From time to time, we may record revenue based on our revenue recognition policies in advance of being able to invoice the customer, or we may invoice the customer prior to being able to recognize the revenue. Included in accounts receivable are unbilled amounts of $ 3,847,737 and $ 2,110,865 at June 30, 2022, and December 31, 2021, respectively. Amounts billed in advance of revenue recognition are presented as deferred revenue on the condensed consolidated balance sheets. The Company has several signed contracts with customers for the distribution of messaging, or other services, which include payment in advance. The payments are not recorded as revenue until the revenue is earned under our revenue recognition policy. Deferred revenue was $ 1,041,919 and $ 1,389,907 as of June 30, 2022 and December 31, 2021, respectively. The 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 for the deferred revenue account for the quarter ended June 30. 2022 2021 Balance January 1 $ 1,389,907 $ 285,795 Revenue recognized ( 6,013,181 ) ( 3,361,479 ) Amount collected 5,916,318 3,523,824 Balance March 31 $ 1,293,044 $ 448,140 Revenue recognized ( 7,373,802 ) ( 1,962,240 ) Amount collected 7,122,677 1,833,709 Balance June 30 $ 1,041,919 $ 319,609 The majority of our revenue is earned from life sciences companies, such as pharmaceutical and biotech companies, or medical device makers. A small portion of our revenue is earned from other sources, such as associations and technology companies. A break down is set forth in the table below. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenue from: Life Science Companies $ 13,138,681 $ 13,313,044 $ 26,519,358 $ 24,256,404 Other 839,984 312,595 1,190,837 598,446 Total Revenue $ 13,978,665 $ 13,625,639 $ 27,710,195 $ 24,854,850 NOTE 5 – LEASES We have operating leases for office space in two multitenant facilities with lease terms greater than 12 months, which are recorded as assets and liabilities on our condensed consolidated balance sheets. These leases include our corporate headquarters, located in Rochester, Michigan, and a technical facility in Zagreb, Croatia. We also had a lease on office space in Cranbury, New Jersey, which expired in January 2022. We did not renew the New Jersey lease. For leases that contain renewal options, we have only assumed renewal for the headquarters lease. Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Amortization of the right of use assets is recognized as non-cash lease expense on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Short term lease costs include month to month leases and occasional rent for transient meeting and office spaces in shared office space facilities. 8 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2022 For the three and six months ended June 30, 2022, the Company’s lease cost consists of the following components, each of which is included in operating expenses within the Company’s condensed consolidated statements of operations: Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Operating lease cost $ 23,333 $ 49,747 Short-term lease cost 13,807 21,899 Total lease cost $ 37,140 $ 71,646 The table below presents the future minimum lease payments to be made under operating leases as of June 30, 2022: As of June 30, 2022 2022 49,010 2023 98,019 2024 80,177 2025 70,224 Total 297,430 Less: discount 19,955 Total lease liabilities $ 277,475 The weighted average remaining lease term at June 30, 2022 for operating leases is 3.2 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 $ 45,599 and $ 62,069 for the six months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022 and 2021, payments on lease obligations were $ 52,168 and $ 71,397 , respectively, and amortization on the right of use assets was $ 52,662 and $ 60,013 , respectively. NOTE 6 – STOCKHOLDERS’ EQUITY During the quarters ended June 30, 2022 and March 31, 2022, we issued 43,701 and 28,006 shares of our common stock, respectively, and received proceeds of $ 572,347 and $ 258,128 , respectively, in connection with the exercise of stock options under our 2013 equity incentive plan. During the quarters ended June 30, 2021 and March 31, 2021, we issued 232,806 shares and 510,803 shares of our common stock, respectively, and received proceeds of $ 1,590,767 and $ 1,120,011 , respectively, in connection with the exercise of stock options under our 2013 equity incentive plan. Of the shares issued in the quarter ended March 31, 2021, a total of 368,329 shares were issued in a cashless transaction related to 394,739 expiring options using the net settled method whereby 26,410 options were used to pay the purchase price. The remaining 116,064 shares issued in connection with the exercise of options were all issued for cash. During the quarter ended June 30, 2022, the Board authorized a share repurchase program, under which the Company may repurchase up to $ 20 million of its outstanding common stock. Through June 30, 2022, we repurchased 12,868 shares of our common stock for a total of $ 321,054 . These shares were recorded as Treasury Shares using the par value method. 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 . Our previous director’s compensation plan called for issuance of shares of common stock each quarter to each independent director. In 2021, we issued 2,695 shares valued at $ 124,994 in the quarter ended March 31, 2021 and 2,035 shares valued at $ 125,091 in the quarter ended June 30, 2021. Our current non-employee director's compensation program calls for the grant of restricted stock units with a one year vesting period. Therefore, no shares were issued to our independent directors during the periods ending March 31 and June 30, 2022. 9 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2022 NOTE 7 – STOCK BASED COMPENSATION We use the fair value method to account for stock-based compensation, including both options and restricted stock units. We recorded $ 2,242,553 and $ 954,434 in compensation expense in the six months ended June 30, 2022 and 2021, respectively, related to options issued under our equity compensation plans. This includes expense related to options issued in prior years for which the requisite service period for those options includes the current period as well as options issued in the current period. During the three months ended June 30, 2022, we granted certain performance based options, the expense for which will be recorded over time once the achievement of the performance is deemed probable. There was no expense related to these options recorded during the period. The fair value of these instruments was calculated using the Black-Scholes option pricing model. There is $ 12,883,915 of remaining expense related to unvested options to be recognized in the future over a weighted average period of 2.3 years. The total intrinsic value of outstanding options at June 30, 2022 was $ 4,451,689 . We recorded $ 4,956,868 and $ 399,672 in compensation expense related to restricted stock units in the six months ended June 30, 2022 and 2021, respectively. These units vest over time, based on market conditions, or when certain performance requirements are met. We issued 13,627 shares during the period ended March 31, 2022 for restricted stock units vested. Of the $ 4,956,868 recorded in compensation expense, $ 3,023,422 is related to market-based equity grants. There was no expense recorded in relation to the performance based grants. The expense related to the market-based grants was calculated using a Monte Carlo simulation. There is $ 20,877,781 of remaining expense related to unvested restricted stock units to be recognized in the future over a weighted average period of 2.2 years. NOTE 8 – EARNINGS (LOSS) PER SHARE Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. The number of shares related to options and restricted stock units included in diluted EPS is based on the “Treasury Stock Method” prescribed in ASC 260-10, Earnings per Share. This method assumes the theoretical repurchase of shares using proceeds of the respective stock options exercised, and for restricted stock units, the amount of compensation cost attributed to future services which have not yet been recognized, and the amount of current and deferred tax benefit, if any, that would be credited to additional paid in capital upon the vesting of the restricted stock units, at a price equal to the issuer’s average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of EPS in respect of the stock options and restricted stock units is dependent on this average stock price and will increase as the average stock price increases. The following table sets forth the computation of basic and diluted net loss per share. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator Net income (loss) $ ( 3,884,714 ) $ 352,100 $ ( 7,645,812 ) $ ( 285,277 ) Denominator Weighted average shares outstanding used in computing net loss per share Basic 18,122,500 17,347,096 18,000,958 16,720,114 Effect of dilutive stock options, warrants, and unvested restricted stock unit awards — 757,711 — — Diluted 18,122,500 18,104,807 18,000,958 16,720,114 Net income (loss) per share Basic $ ( 0.21 ) $ 0.02 $ ( 0.42 ) $ ( 0.02 ) Diluted $ ( 0.21 ) $ 0.02 $ ( 0.42 ) $ ( 0.02 ) No calculation of diluted earnings per share is included for 2022 or the six months ended June 30, 2021, as the effect of the calculation would be anti-dilutive. 10 OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2022 The number of common shares potentially issuable upon the exercise of certain options or for unvested restricted stock unit awards are reflected in the table below. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Weighted average number of shares for the periods ended Options 156,018 659,700 176,996 652,103 Unvested restricted stock unit awards 63,541 98,011 77,221 94,942 Total 219,559 757,711 254,217 747,045 NOTE 9 – CONTINGENCIES Litigation The Company is not currently involved in any material legal proceedings. NOTE 10 – INCOME TAXES As discussed in our annual report on Form 10-K for the year ended December 31, 2021, we had net operating loss carry-forwards for federal income tax purposes of $ 26.4 million as of December 31, 2021. Accordingly, no federal income tax expense or benefit is recorded in the current period. NOTE 11 – SUBSEQUENT EVENTS In July 2022, we received proceeds of $ 219,630 and issued 68,751 shares of common stock in conjunction with the exercise of stock options. We have purchased 219,877 shares of our common stock for an average price of $ 22.91 . Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) 7/1/22 - 7/31/22 151,815 $ 22.42 151,815 $ 16,274,782 8/1/22 - 8/8/22 68,062 $ 23.98 68,062 $ 14,642,602 In accordance with ASC 855-10, we have analyzed events and transactions that occurred subsequent to June 30, 2022 through the date these financial statements were issued and have determined that we do not have any other material subsequent events to disclose or recognize in these financial statements. 11