What changed in this filing

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Item 1. Financial Statements

2023-08-14 compared with 2023-05-12 · 245 added, 150 removed, 258 unchanged (60% of the section changed)

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10-Q are as follows:

Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022 (unaudited);

Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 (unaudited);

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2023 and 2022 (unaudited);

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited);

Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022 (unaudited);

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 (unaudited);

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022 (unaudited);

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudited);

Notes to Condensed Consolidated Financial Statements (unaudited).

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Stockholders’ equity

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2023 or December 31, 2022

Common stock, $ 0.001 par value, 166,666,667 shares authorized, 18,331,511 and 18,288,571 shares issued at March 31, 2023 and December 31, 2022, respectively

Treasury stock, $ 0.001 par value, 1,214,398 shares held at March 31, 2023 and December 31, 2022

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2023 or December 31, 2022

Common stock, $ 0.001 par value, 166,666,667 shares authorized, 18,376,771 and 18,288,571 shares issued at June 30, 2023 and December 31, 2022, respectively

Treasury stock, $ 0.001 par value, 1,741,397 and 1,214,398 shares held at June 30, 2023 and December 31, 2022, respectively

Additional paid-in-capital

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For the Three Months Ended

For the Six Months Ended

Cost of revenues, exclusive of depreciation and amortization presented separately below

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( 3,908,530 )

( 11,945,054 )

( 7,669,632 )

Interest income

2 unchanged sentences

( 3,884,714 )

( 10,559,163 )

( 7,645,812 )

Income tax benefit

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$ ( 3,884,714 )

$ ( 10,559,163 )

$ ( 7,645,812 )

Weighted average number of shares outstanding – basic

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IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2023

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

Treasury Stock

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$ 123,963,772

Stock based compensation expense

Restricted stock

Issuance of common stock

For options exercised

For restricted stock units vested

Repurchase of common stock

( 7,521,899 )

( 7,522,426 )

( 4,161,449 )

Balance June 30, 2023

( 1,741,397 )

$ 173,049,784

$ ( 57,251,261 )

$ 115,815,159

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

Treasury Stock

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$ 131,050,845

Stock based compensation expense

Restricted stock

Issuance of common stock

For options exercised

For acquisition

Repurchase of common stock

( 3,884,714 )

Balance June 30, 2022

$ 183,698,497

$ ( 42,899,470 )

$ 140,817,202

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

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( 1,268,313 )

( 2,001,379 )

Accrued expenses and other liabilities

( 1,096,881 )

( 1,263,971 )

Deferred revenue

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS USED IN INVESTING ACTIVITIES:

( 2,454,489 )

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:

Purchase of property and equipment

2 unchanged sentences

Redemptions of held-to-maturity investments

EvinceMed acquisition

( 2,000,000 )

Acquisition of intangible assets, including intellectual property rights

Capitalized software development costs

NET CASH USED IN INVESTING ACTIVITIES

( 1,274,150 )

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

( 2,186,592 )

CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:

Cash paid for employee withholding taxes related to the vesting of restricted stock units

Repurchase of common stock

( 7,522,426 )

Proceeds from exercise of stock options

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

( 7,620,081 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

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Cash paid for interest

Reduction of EvinceMed purchase price for amounts previously paid

Shares issued in connection with acquisition

Cash paid for income taxes

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STATEMENTS (UNAUDITED)

MARCH 31, 2023

JUNE 30, 2023

NOTE 1 – NATURE OF BUSINESS AND BASIS OF

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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.

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.

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 months ended March 31, 2023 and 2022 have been prepared by us without audit pursuant to the rules and regulations of

for the three and six months ended June 30, 2023 and 2022 have been prepared by us without audit pursuant to the rules and regulations

Securities and Exchange Commission (“SEC”).

In the opinion of management, all adjustments necessary to present fairly

our financial position at March 31, 2023, and our results of operations, changes in stockholders’ equity, and cash flows for

the three months ended March 31, 2023 and 2022, have been made.

In the opinion of management, all adjustments necessary to present

fairly our financial position at June 30, 2023, and our results of operations, changes in stockholders’ equity, and cash flows

for the six months ended June 30, 2023 and 2022, have been made.

Those adjustments consist of normal and recurring adjustments.

condensed consolidated balance sheet as of December 31, 2022, has been derived from the audited consolidated condensed balance sheet

as of that date.

The condensed consolidated balance sheet as of December 31, 2022, has been derived from the audited consolidated condensed balance

sheet as of that date.

Certain information and note disclosures, including

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in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on March 10, 2023.

The results of operations for the three months

ended March 31, 2023, are not necessarily indicative of the results to be expected for the full year.

The results of operations for the six months

ended June 30, 2023, are not necessarily indicative of the results to be expected for the full year.

NOTE 2 – NEW ACCOUNTING STANDARDS

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of operations, or cash flows.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

JUNE 30, 2023

NOTE 3 - CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

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securities, and depending upon the classification, value the security at amortized cost or fair market value.

At March 31, 2023 and

December 31, 2022, we have recorded $ 57.3 million and $ 55.9 million, respectively, of held-to-maturity United States’ Treasury Bills at

amortized cost basis.

Our held-to-maturity United States’ Treasury Bills have maturity dates between April 2023 and June 2023 .

At June 30, 2023 and

December 31, 2022, we have recorded $ 52.9 million and $ 55.9 million, respectively, of held-to-maturity United States’ Treasury Bills

at amortized cost basis.

Our held-to-maturity United States’ Treasury Bills have maturity dates between July 2023 and September 2023 .

NOTE 4 - CAPITALIZED SOFTWARE COSTS

The Company capitalizes certain development costs

incurred in connection with software development for internal-use software platforms used in operations and for providing services to

our customers.

Costs incurred in the preliminary stages of development are expensed as incurred.

Once software has reached the development

stage, internal and external costs, if direct, are capitalized until the software is substantially complete and ready for its intended

Capitalization ceases upon completion of all substantial testing.

The Company also capitalizes costs related to specific upgrades

and enhancements when it is probable the expenditures will result in additional functionality.

Capitalized internal use software development

costs are included in intangible assets and are amortized on a straight-line basis over the estimated useful life of the software platforms

and are included in depreciation and amortization within operating expenses in the consolidated statements of operations.

of capitalized internal use software expense for the six months ended June 30, 2023 and 2022 was $ 95,108 and $ 226,819 , respectively.

The Company accumulates capitalizable costs related to current projects in a CIP software account, the balance of which was $ 1.3 million

and zero at June 30, 2023 and December 31, 2022, respectively.

NOTE 5 – REVENUES

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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 $ 2,992,909 and $ 3,582,735 at March 31, 2023, and December 31, 2022,

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

Included in accounts receivable are unbilled amounts of $ 2,975,040 and $ 3,582,735 at June 30, 2023, and December 31,

2022, respectively.

Amounts billed in advance of revenue recognition are presented as deferred revenue on the condensed consolidated balance

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

MARCH 31, 2023

NOTE 4 – REVENUES (CONTINUED)

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

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until the revenue is earned under its revenue recognition policy.

Deferred revenue was $ 735,140 and $ 164,309 as of March 31, 2023

Deferred revenue was $ 451,787 and $ 164,309 as of June 30, 2023

and December 31, 2022, respectively.

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12 months, or less.

Following is a summary of activity for the deferred revenue account for the quarter ended March 31.

Following is a summary of activity for the deferred revenue account for the quarter ended June 30.

Balance January 1

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( 8,778,893 )

( 6,013,181 )

Amount collected

Balance March 31

Revenue recognized

( 9,619,380 )

( 7,373,802 )

Amount collected

Balance June 30

Disaggregation of Revenue

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The majority of our revenue is recognized over time as solutions are provided.

A small portion

of our revenue related to program development, solution architect design, and other solutions is recognized at a point in time upon delivery

to customers.

portion of our revenue related to program development, solution architect design, and other solutions is recognized at a point in time

upon delivery to customers.

A break down is set forth in the table below.

Three Months Ended

Six Months Ended

Revenue recognized over time

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Total Revenue

NOTE 5 – LEASES

We have operating leases for office space in two

multitenant facilities in Rochester, Michigan and Zagreb, Croatia.

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

expired in January 2022.

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

Short term lease costs include month to month leases and occasional rent for transient meeting and office spaces in shared

office space facilities.

OPTIMIZERX CORPORATION

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STATEMENTS (UNAUDITED)

MARCH 31, 2023

NOTE 5 – LEASES (CONTINUED)

For the three months ended March 31, 2023

and 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, 2023

NOTE 6 – LEASES

During the six months ended, we had operating

leases for office space in two multi tenant facilities in Rochester, Michigan and Zagreb, Croatia.

We also had a lease on office space

in Cranbury, New Jersey, which expired in January 2022.

The lease in Rochester, Michigan was terminated during the quarter ended June

The lease in Zagreb, Croatia ends on February 28th, 2024.

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.

For the six months ended June 30, 2023 and

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:

Six Months Ended

Operating lease cost

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The table below presents the future minimum lease

payments to be made under operating leases as of March 31, 2023:

As of March 31, 2023

payments to be made under operating leases as of June 30, 2023:

As of June 30, 2023

Total lease liabilities

The weighted average remaining lease term at March 31,

2023 for operating leases is 2.5 years and the weighted average discount rate used in calculating the operating lease asset and liability

Cash paid for amounts included in the measurement of lease liabilities was $ 22,185 and $ 24,493 for the three months ended March 31,

2023 and 2022, respectively.

For the three months ended March 31, 2023 and 2022, payments on lease obligations were $ 24,620 and $ 27,898 ,

respectively, and amortization on the right of use assets was $ 24,696 and $ 28,023 , respectively.

The weighted average remaining lease term at

June 30, 2023 for operating leases is 0.7 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 $ 44,708 and $ 45,599 for the six months

ended June 30, 2023 and 2022, respectively.

For the six months ended June 30, 2023 and 2022, payments on lease obligations

were $ 49,359 and $ 52,168 , respectively, and amortization on the right of use assets was $ 49,472 and $ 52,662 , respectively.

NOTE 7 – STOCKHOLDERS’ EQUITY

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The Company had 10,000,000 shares of preferred

stock, $ 0.001 par value per share, authorized as of March 31, 2023.

stock, $ 0.001 par value per share, authorized as of June 30, 2023.

No shares were issued or outstanding in either 2023 or 2022.

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

$ 0.001 par value per share, authorized as of March 31, 2023.

There were 17,117,113 and 17,074,173 shares of common stock outstanding,

net of shares held in treasury, at March 31, 2023 and December 31, 2022, respectively.

The Company issued 9,668 shares of common stock

and received proceeds of $ 40,606 in the three months ended March 31, 2023 in connection with the exercise of options under our 2013

Incentive Plan.

During the quarter ended March 31, 2022, we issued 28,006 shares of common stock and received proceeds of $ 258,128 under

the same Plan.

OPTIMIZERX CORPORATION

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STATEMENTS (UNAUDITED)

MARCH 31, 2023

JUNE 30, 2023

NOTE 7 – STOCKHOLDERS’ EQUITY (CONTINUED)

The Company had 166,666,667 shares of common

stock, $ 0.001 par value per share, authorized as of June 30, 2023.

There were 16,635,374 and 17,074,173 shares of common stock outstanding,

net of shares held in treasury of 1,741,397 and 1,214,398 , at June 30, 2023 and December 31, 2022, respectively.

During the quarters ended June 30, 2023

and March 31, 2023, the Company issued 10,000 and 9,668 shares of our common stock, respectively, and received proceeds of $ 105,100 and

$ 40,606 , respectively, in connection with the exercise of options under our 2013 Incentive Plan.

During the quarters ended June 30, 2022

and March 31, 2022, the Company 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 options under our 2013 Incentive Plan.

The Company issued 35,260 and 33,272 shares of

common stock in the three months ended March 31, 2023 and 2022, respectively in connection with the vesting of restricted stock units

under our 2013 Incentive Plan and 2021 Equity Incentive Plan.

In the three months ended March 31, 2023, certain participants utilized

a net withhold settlement method, in which shares were surrendered to cover payroll withholding tax.

Of the shares issued to participants

during the three months ended March 31, 2023, 9,502 shares, valued at $ 170,400 , were surrendered and subsequently cancelled.

common stock in the three months ended June 30, 2023 and March 31, 2023, respectively in connection with the vesting of restricted

stock units under our 2013 Incentive Plan and our 2021 Equity Incentive Plan.

Some of the participants utilized a net withhold settlement

method, in which shares were surrendered to cover payroll withholding tax.

Of the shares issued to participants during the six months

ended June 30, 2023, 23,217 shares, valued at $ 243,361 , were surrendered and subsequently cancelled.

The Company issued 13,627 shares of common stock

in the three months ended March 31, 2022 in connection with the vesting of restricted stock units under our 2013 Incentive Plan and our

2021 Equity Incentive Plan.

There were no shares of common stock issued in connection with the vesting of restricted stock units in the

three months ended June 30, 2022.

The Company issued 240,741 shares of common stock

valued at $ 9,374,455 during the quarter ended June 30, 2022 in connection with the acquisition of substantially all of the assets of

EvinceMed Corp.

Treasury Stock

During the quarter ended March 31, 2023,

the Board authorized a share repurchase program, under which the Company may repurchase up to $ 15 million of its outstanding common

During the quarter ended March 31, 2023, there were no shares of our common stock repurchased under this program.

During the quarter ended March 31, 2023, the

Board authorized a share repurchase program, under which the Company may repurchase up to $ 15 million of its outstanding common

During the quarter ended June 30, 2023, there were 526,999 shares of our common stock repurchased under this program for

a total of $ 7,522,426 , including commissions paid on repurchases.

These shares were recorded as treasury shares using the par value method.

During 2022, the Board authorized a share repurchase

program, under which the Company could repurchase up to $ 20.0 million of its outstanding common stock.

During 2022, the Company repurchased

1,214,398 shares of our common stock for a total of $ 20,021,830 , including commissions paid on repurchases.

These shares were recorded

as treasury shares using the par value method.

During 2022, the Company

repurchased 1,214,398 shares of our common stock for a total of $ 20,021,830 , including commissions paid on repurchases.

were recorded as treasury shares using the par value method.

NOTE 8 – STOCK BASED COMPENSATION

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The compensation expense related to options for

the three months ended March 31, 2023 and 2022, was $ 1,466,694 and $ 905,744 , respectively.

the six months ended June 30, 2023 and 2022 was $ 3,121,464 and $ 2,242,554 , respectively.

The fair value of these instruments was

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recognized in the future over a weighted average period of 1.89 years.

The total intrinsic value of outstanding options at March 31,

The total intrinsic value of outstanding options at June 30,

2023 was $ 309,383 .

During 2022, the Company granted certain performance based stock 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.

Restricted Stock Units

The Company recorded of $ 2,913,809 and $ 2,268,354

in compensation expense related to restricted stock units for the three months ended March 31, 2023 and 2022, respectively.

of $ 14,830,343 remains to be recognized at March 31, 2023 over a weighted average period of 1.9 years.

Of the $ 2,913,809 and $ 2,268,354 in compensation

expense, $ 1,503,359 for each period related to market-based equity grants.

These market-based restricted stock units were valued using

a Monte Carlo simulation There is $ 3,596,738 remaining to expense over a weighted average period of 0.95 years.

During 2022, the Company granted certain performance based stock units,

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 units recorded during the period.

The director’s compensation program calls

for the grant of restricted stock units with a one year vesting period.

There was $ 184,620 and $ 62,889 included in the compensation expense

discussed above related to director’s compensation for the periods ending March 31, 2023 and 2022, respectively.

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.

During 2022, the Company granted certain performance

based stock options, the expense for which will be recorded over time once the achievement of the performance is deemed probable.

was no expense related to these options recorded during the period.

OPTIMIZERX CORPORATION

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STATEMENTS (UNAUDITED)

March 31, 2023

NOTE 8 – EARNINGS (LOSS) PER SHARE (CONTINUED)

JUNE 30, 2023

NOTE 8 - STOCK BASED COMPENSATION (CONTINUED)

Restricted Stock Units

The Company recorded of $ 4,762,162 and $ 4,956,867

in compensation expense related to restricted stock units for the six months ended June 30, 2023 and 2022, respectively.

of $ 13,252,855 remains to be recognized at June 30, 2023 over a weighted average period of 2.01 .

During 2022, the Company granted certain performance

based restricted stock units, 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 restricted stock units recorded during the period.

The director’s compensation program calls for

the grant of restricted stock units with a one year vesting period.

There was $ 351,765 and $ 129,515 included in the compensation expense

discussed above related to director’s compensation for the periods ended June 30, 2023 and 2022, respectively.

Equity Award Modification

On April 16, 2023, the Compensation Committee

approved a grant to the CEO of 86,685 restricted stock units and 161,698 stock options with a grant date fair value of $ 2.5 million to

vest over a three year period.

Concurrently, the CEO forfeited his October 2021 grant of 182,398 market-based restricted stock units.

The forfeiture and accompanying grant are considered an equity modification according to ASC 718, Compensation-Stock Compensation .

The additional compensation value created by the termination and issuance of new equity awarded, as measured using a Monte Carlo simulation

was approximately $ 1.9 million in total.

Under ASC 718 this results in a non-cash expense in current and future periods to be recognized

over a three year period.

These expense values are reflected and included in the option and restricted stock expense values discussed

NOTE 9 – 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

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increase as the average stock price increases.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

JUNE 30, 2023

NOTE 9 – LOSS PER SHARE (CONTINUED)

The following table sets forth the computation

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Three Months Ended

Six Months Ended

$ ( 4,161,449 )

$ ( 3,884,714 )

$ ( 10,559,163 )

$ ( 7,645,812 )

Weighted average shares outstanding used in computing net loss per share

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Net loss per share

No calculation of diluted earnings per share is included for the three

months ended March 31, 2023 or 2022 as the effect of the calculation would be anti-dilutive.

No calculation of diluted earnings per share

is included for the three or six months ended June 30, 2023 or 2022 as the effect of the calculation would be anti-dilutive.

The number of common shares potentially issuable

upon the exercise of certain options that were excluded from the diluted loss per common share calculation for the three months ended

March 31,2023 was 34,055 related to options, and 59,749 related to restricted stock units, for a total of 93,804 shares.

The number of

common shares potentially issuable upon the exercise of certain options that were excluded from the diluted loss per common share calculation

for the three months ended March 31,2022 was 221,251 related to options, and 77,446 related to restricted stock units, for a total of

298,697 shares.

upon the exercise of certain options and the vesting of certain restricted stock units that were excluded from the diluted loss per common

share calculation are reflected in the table below.

Three Months Ended

Six Months Ended

Weighted average number of shares for the periods ended

Unvested restricted stock unit awards

NOTE 10 – CONTINGENCIES

The Company is not currently involved in any material

legal proceedings.

The Company is not currently involved in any

material legal proceedings.

NOTE 11 – INCOME TAXES

As discussed in our annual report on Form 10-K for the year ended December 31,

2022, we had net operating loss carry-forwards for federal income tax purposes of approximately $ 21.5 million as of December 31,

As discussed in our annual report on Form 10-K

for the year ended December 31, 2022, we had net operating loss carry-forwards for federal income tax purposes of approximately

$ 21.5 million as of December 31, 2022.

Accordingly, no federal income tax expense or benefit is recorded in the current period.

Management monitors company-specific, and

macro-economic factors and assesses the likelihood that the Company’s net deferred tax assets will be utilized prior to their expiration.

As previously disclosed in our annual report, the Company maintained a valuation allowance against its net deferred tax assets.

Management monitors company-specific, and macro- economic factors and assesses the likelihood that the Company’s net deferred tax

assets will be utilized prior to their expiration.

As previously disclosed in our annual report, the Company maintained a valuation allowance

against its net deferred tax assets.

NOTE 12 – SUBSEQUENT EVENTS

On April 18, 2023, Mr.

Febbo forfeited his October 2021 grant under the

2021 Equity Incentive Plan (the “2021 Febbo Grant”).

These shares were returned to the 2021 Equity Incentive Plan.

Febbo’s forfeiture of the 2021 Febbo Grant, the Compensation Committee determined to again include Mr.

Febbo in the Company’s

annual equity grants under the 2021 Equity Incentive Plan and subsequently issued Mr.

Febbo a grant of options and restricted stock units

with an aggregate grant date value of $ 2.5 million.

The forfeiture and subsequent issuance will be accounted for as a modification

in accordance with ASC 718.

During the period April 1 through May 7, we issued

10,595 shares of common stock in conjunction with the vesting of restricted stock units.

Subsequent to June 30, 2023, the Company entered

into a sublease agreement for a new office space in Waltham, MA.

The term of the sublease commences on July 1, 2023 and will terminate

on July 31, 2024.

The Company is obligated to pay approximately $ 5,800 per month over the term of the lease .

On June 2, 2023, the Company entered into a one-year

term lease agreement for a new office space in Zagreb, Croatia which commenced on July 1, 2023.

The Company has the option to renew for

a period of five years.

The Company is obligated to pay approximately $ 2,800 plus VAT or approximately $ 3,500 per month over the term

of the lease.

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-Q

Item 1. Financial Statements