What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 305 added, 375 removed, 208 unchanged (77% of the section changed)

2 unchanged sentences

10-Q are as follows:

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

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

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

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

Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023 (unaudited);

Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (unaudited);

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months March 31, 2024 and 2023 (unaudited);

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited);

Notes to Condensed Consolidated Financial Statements (unaudited).

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

(in thousands, except share and per share data)

Current assets

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Accounts receivable, net of allowance for credit losses of $ 371 and $ 480 at March 31, 2024 and December 31, 2023, respectively

Taxes receivable

Prepaid expenses and other

1 unchanged sentence

Property and equipment, net

Technology assets, net

Patent rights, net

Deferred financing costs

Right of use assets, net

Other intangible assets, net

Other long-term assets

Other intangibles, net

Tradename and customer relationships, net

Operating lease right of use assets, net

Security deposits and other assets

Total other assets

$ 123,929,152

$ 134,651,185

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Current portion of long-term debt

Accounts payable – trade

1 unchanged sentence

Revenue share payable

Taxes payable

Current portion of lease liabilities

2 unchanged sentences

Non-current liabilities

Long-term debt, net

Lease liabilities, net of current portion

Deferred tax liabilities, net

Total liabilities

1 unchanged sentence

Stockholders’ equity

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

Common stock, $ 0.001 par value, 166,666,667 shares authorized, 18,386,920 and 18,288,571 shares issued at September 30, 2023 and December 31, 2022, respectively

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

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2024 or December 31, 2023

Common stock, $ 0.001 par value, 166,666,667 shares authorized, 19,921,879 and 19,899,679 shares issued at March 31, 2024 and December 31, 2023, respectively

Treasury stock, $ 0.001 par value, 1,741,397 shares held at March 31, 2024 and December 31, 2023

Additional paid-in-capital

Accumulated deficit

( 60,116,559 )

( 46,692,098 )

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 123,929,152

$ 134,651,185

The accompanying notes are an integral part of

these condensed consolidated financial statements.

The accompanying notes are

an integral part of these condensed consolidated financial statements.

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

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

1 unchanged sentence

General and administrative expenses

Depreciation, amortization and noncash lease expense

Depreciation and amortization

Total operating expenses

Loss from operations

( 3,553,488 )

( 3,756,759 )

( 15,498,541 )

( 11,426,390 )

Other income (expense)

Interest expense

Interest income

Total other income (expense), net

Loss before provision for income taxes

( 2,865,298 )

( 3,466,792 )

( 13,424,460 )

( 11,112,604 )

Income tax benefit

$ ( 2,865,298 )

$ ( 3,466,792 )

$ ( 13,424,460 )

$ ( 11,112,604 )

Provision for income taxes

Weighted average number of shares outstanding – basic

7 unchanged sentences

IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,

FOR THE THREE MONTHS ENDED MARCH 31, 2024

(in thousands, except share data)

Treasury Stock

1 unchanged sentence

( 1,741,397 )

$ 172,785,800

$ ( 46,692,098 )

$ 126,110,777

Stock based compensation expense

3 unchanged sentences

For restricted stock units vested

( 6,397,714 )

Balance March 31, 2024

( 1,741,397 )

$ 177,036,466

$ ( 53,089,812 )

$ 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

Stock based compensation expense

Restricted stock

Issuance of common stock

For options exercised

For restricted stock units vested

Repurchase of common stock

( 2,865,298 )

Balance September 30, 2023

( 1,741,397 )

$ 176,206,572

$ ( 60,116,559 )

$ 116,106,659

OPTIMIZERX CORPORATION

1 unchanged sentence

IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,

FOR THE THREE MONTHS ENDED MARCH 31, 2023

(in thousands, except share data)

Treasury Stock

1 unchanged sentence

( 1,214,398 )

$ ( 35,253,658 )

$ 131,379,717

Stock based compensation expense

3 unchanged sentences

For restricted stock units vested

( 3,761,098 )

Balance March 31, 2023

( 1,214,398 )

$ ( 39,014,756 )

$ 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

Stock based compensation expense

Restricted stock

Issuance of common stock

For options exercised

For restricted stock units vested

Repurchase of common stock

( 12,239,824 )

( 12,240,517 )

( 3,466,792 )

Balance September 30, 2022

$ 175,920,910

$ ( 46,366,262 )

$ 129,572,203

The accompanying notes are an integral part of

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 13,424,460 )

$ ( 11,112,604 )

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

(in thousands)

For the Three Months Ended

OPERATING ACTIVITIES:

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

Depreciation and amortization

Stock-based compensation

Increase in bad debt reserve

Bad debt expense

Amortization of debt issuance costs

Accounts receivable

2 unchanged sentences

Revenue share payable

( 1,704,593 )

Accrued expenses and other liabilities

( 1,237,689 )

Taxes payable

Deferred revenue

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

INVESTING ACTIVITIES:

Purchase of property and equipment

Purchases of held-to-maturity investments

( 162,777,510 )

( 37,468,889 )

Redemptions of held-to-maturity investments

EvinceMed acquisition

( 2,000,000 )

Acquisition of intangible assets, including intellectual property rights

Capitalized software development costs

( 1,561,447 )

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

( 39,691,877 )

CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:

NET CASH USED IN INVESTING ACTIVITIES

FINANCING ACTIVITIES:

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

Repurchase of common stock

( 7,522,426 )

( 12,561,571 )

Proceeds from exercise of stock options

Loan origination costs

Repayment of long-term debt

NET CASH USED IN FINANCING ACTIVITIES

( 7,969,509 )

( 11,511,467 )

NET DECREASE IN CASH AND CASH EQUIVALENTS

( 8,287,209 )

( 43,352,750 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

2 unchanged sentences

Cash paid for interest

ROU assets obtained in exchange for lease obligations

Reduction of EvinceMed purchase price for amounts previously paid

Shares issued in connection with acquisition

Cash paid for income taxes

3 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

(in thousands, excepts share and per share data)

NOTE 1 – NATURE OF BUSINESS AND BASIS OF

5 unchanged sentences

care journey.

Connecting over 60 % of U.S.

Connecting over two million 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.

embedded within a proprietary point-of-care network, as well as mass digital communications channels, OptimizeRx helps life sciences organizations

engage and support their customers.

The condensed consolidated financial statements

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

regulations of the U.S.

for the three months ended March 31, 2024 and 2023 have been prepared by us without audit pursuant to the rules and regulations of

Securities and Exchange Commission (“SEC”).

In the opinion of management, all adjustments necessary

to present fairly our financial position at September 30, 2023, and our results of operations, changes in stockholders’ equity,

and cash flows for the nine months ended September 30, 2023 and 2022, have been made.

Those adjustments consist of normal and recurring

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

balance sheet as of that date.

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

our financial position at March 31, 2024, and our results of operations, changes in stockholders’ equity, and cash flows for

the three months ended March 31, 2024 and 2023, have been made.

Those adjustments consist of normal and recurring adjustments.

condensed consolidated balance sheet as of December 31, 2023, has been derived from the audited consolidated condensed balance sheet

as of that date.

Certain information and note disclosures, including

3 unchanged sentences

financial statements should be read in conjunction with a reading of the consolidated financial statements and notes thereto included

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 nine months

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

NOTE 2 – NEW ACCOUNTING STANDARDS

ASU Topic 2021-08 Business Combinations (Topic

805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , 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 was effective for the Company’s

fiscal year beginning January 1, 2023.

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

of operations, or cash flows.

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

Cash equivalents include items almost as liquid

as cash with maturity periods of three months or less when purchased, and short-term investments include items with maturity dates between

three months and one year when purchased.

We account for marketable securities in accordance with ASC 320, “Investments - Debt Securities”,

which require that certain debt securities be classified into one of three categories:

held-to-maturity, available-for-sale, or trading

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

At September 30, 2023

and December 31, 2022, we have recorded $ 53.6 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 October 2023 and December

in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on April 15, 2024 (“Form

The results of operations for the three months

ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year.

On October 24, 2023, the Company acquired 100 %

of the issued and outstanding preferred and common stock of Healthy Offers, Inc., a Nevada corporation d/b/a Medicx Health (“Medicx

Health”) - See Part II, Item 8.

Financials Statements and Supplementary Data;

Note 3 - Acquisitions in our Form 10-K for additional

information regarding this transaction.

The following presents the pro-forma consolidated

statement of operations as if Medicx Health had been included in the consolidated results of the Company for the three months ended March

Pro-forma consolidated

statement of operations

These amounts have been calculated after applying

the Company’s accounting policies, adjusting Medicx Health results to reflect the additional amortization that would have been charged

assuming the fair value adjustments to intangible assets had been applied on January 1, 2023, interest expense associated with the term

loan and elimination of interest income on short-term investments that were used to fund the acquisition.

During the year ended December 31, 2023, the Company

disposed of its non-core Access solutions - See Part II, Item 8.

Financials Statements and Supplementary Data;

Note 7 - Goodwill and

Intangible Assets in our Form 10-K for additional information regarding this transaction.

A pro-forma statement of operations for the

three months ended March 31, 2023, is not presented for this transaction as the pro-forma impacts were not material to the Company’s

consolidated results.

The Revenue presented in the pro-forma financial consolidated statement of operations data above includes $ 1,876 related to Access

and other non-core solutions for which no revenue was recorded in the three months ended March 31, 2024, (see also the discussion

under Net Revenues in Results of Operations for the Three Months Ended March 31, 2024 and 2023 in Part I, Item 2.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations).

NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued ASU No.

(“ASU 2023-07”), Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

ASU 2023-07 requires annual

and interim disclosures that are expected to improve reportable segment disclosures, primarily through enhanced disclosures about significant

segment expenses.

The provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of adopting

In December 2023, the FASB issued ASU No.

2023-09 (“ASU 2023-09”),

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

ASU 2023-09 addresses investor requests for more transparency about

income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid

This update also includes certain other amendments to improve the effectiveness of income tax disclosures.

The provisions

of ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating

the impact of adopting ASU 2023-09.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

(in thousands, excepts share and per share data)

NOTE 3 – CAPITALIZED SOFTWARE COSTS

11 unchanged sentences

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

of capitalized internal use software expense for the nine months ended September 30, 2023 and 2022 was $ 142,662 and $ 254,547 , respectively.

The Company accumulates capitalizable costs related to current projects in a construction in process (“CIP”) software account,

the balance of which was $ 761,447 and zero at September 30, 2023 and December 31, 2022, respectively.

of capitalized internal use software expense for the three months ended March 31, 2024 and 2023 was $ 71 and $ 48 , respectively.

Company accumulates capitalizable costs related to current projects in a construction in process (“CIP”) software account, the

balance of which was $ 351 and $ 696 at March 31, 2024 and December 31, 2023, respectively.

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 $ 4,598,280 and $ 3,582,735 at September 30, 2023, and December 31, 2022, 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 its revenue recognition policy.

Deferred revenue was $ 188,394 and $ 164,309 as of September 30, 2023

and December 31, 2022, 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 nine months ended September 30.

Customers (“ASC Topic 606”), 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 $ 4,471 and $ 4,198 at March 31, 2024, and December 31,

2023, respectively.

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

Revenues are primarily generated from content

delivery activities in which the Company delivers financial, clinical, or brand messaging through a distribution network of eprescribers

and electronic health record technology providers (channel partners), directly to consumers, or from reselling services that complement

the business.

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.

The net contract balance

for contracts in progress at March 31, 2024 and December 31, 2023, was $ 33,568 and $ 2,021 , respectively.

The outstanding performance

obligations are expected to be satisfied during the year ended December 31, 2024.

In certain circumstances, the Company will offer

sales rebates to customers based on spend volume.

Rebates are typically contracted based on a quarterly or annual spend amount based on

a volume threshold or tiered model.

At the beginning of the year, the rebate percentage is estimated based on input from the sales team

and analysis of prior year sales.

Thereafter, the open contract balance for the customer is assessed quarterly to ensure the estimated

rebate percentage being used for the rebate accrual remains reasonable.

The estimated amount of variable consideration will be included

in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized

will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

For the year ended 2023 and during

the first quarter of 2024, there were two contracts with customers that included a rebate clause.

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.

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.

In some instances, we also resell 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.

In instances where

we sell solutions on a commission basis, net revenue is recognized based on the commission-based revenue split that we receive.

where we resell these messaging solutions and have all financial risk and significant operation input and risk, we record the revenue

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

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts share and per share data)

NOTE 4 – REVENUES (CONTINUED)

The Company has several signed contracts with customers for the distribution of messaging, or other services, which include payment in

The payments are not recorded as revenue until the revenue is earned under its revenue recognition policy.

Deferred revenue was

$ 904 and $ 172 as of March 31, 2024 and December 31, 2023, respectively.

The contracts are all short term in nature and all revenue

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

The following is a summary of activity for the deferred revenue account for the

three months ended March 31:

Balance January 1

Revenue recognized

( 8,778,893 )

( 6,013,181 )

Amount collected

Balance March 31

Revenue recognized

( 9,619,380 )

( 7,373,802 )

Amount collected

Balance June 30

Revenue recognized

( 11,400,132 )

( 9,611,912 )

Amount collected

Balance September 30

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

NOTE 5 – REVENUES (CONTINUED)

Disaggregation of Revenue

7 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Revenue recognized over time

1 unchanged sentence

Total Revenue

Accounts receivable are reported at realizable

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

does not seek collateral to secure its accounts receivable and amounts billed are generally due within a short period of time based on

terms and conditions normal for our industry.

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.

If current or expected future economic trends, events, or changes in circumstances indicate that specific receivable

balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly.

Past-due receivable balances are written off when the Company’s collection efforts have been exhausted.

The following is a summary of changes in the allowance for credit losses

for the three months ended March 31,:

Balance at January 1,

Bad debt expense

Balance at March 31,

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts share and per share data)

NOTE 5 – LONG-TERM DEBT

debt, net comprised the following at March 31, 2024 and December 31, 2023:

Term loan, due in 2027

current portion

unamortized issuance costs

Long-term debt, net

As of March 31, 2024, the Term loan bears

interest at 14.1 %, with an effective rate of 16.0 %, including the impact of the amortization of debt issuance costs of $ 182 for the three

months ended March 31, 2024.

The Company was in full compliance with the financial

covenants associated with the Term loan.

The Term Loan is repayable in quarterly installments,

beginning December 31, 2023, equivalent to 1.25 % or $ 500,000 , of the original principal amount, with the outstanding unpaid principal

and all accrued but unpaid interest due and payable on the earlier of (i) the fourth anniversary of the closing date of the Term Loan

or (ii) the date on which the Term Loan is declared due and payable pursuant to the terms of the Financing.

In addition, the Company is required to make a

mandatory prepayment on March 31, of each year, commencing with 2025, equivalent to Excess Cash Flow multiplied by a percentage factor

of 25%, if the leverage ratio is 3.60 to 1.00 or less, 50% if the leverage ratio is greater than 3.60 to 1 or less than or equal;

to 1.00 and 75%, if the leverage ratio is greater than 4.10 to 1.00.

Excess Cash Flow is defined in the Financing as Consolidated EBITDA

for the previous fiscal year less scheduled principal and interest payments, capital expenditure, cash taxes and any cash expenses/gains

added back to net income in the calculation of Consolidated EBITDA, adjusted for any increase/decrease in working capital during the fiscal

Repayments due under the terms of the Term loan,

including an estimate of the amount associated with the Excess Cash Flow calculation discussed above, for the remainder of the current

and in each of the next three fiscal years are as follows:

As of March 31, 2024

2024 (remainder)

NOTE 6 – LEASES

During the nine months ended, we had operating

leases for office space in three 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 was terminated in the quarter ended September 30, 2023 and replaced with a lease in a new location

in Zagreb, Croatia that expires in June 2028.

In July 2023, the Company entered into a short-term

sublease agreement for office space in Waltham, MA.

The term of the sublease commenced on June 15, 2023 and will terminate on July 31,

The Company is obligated to pay approximately $ 5,800 per month over the term of the 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, subleases of less than eighteen (18) months, and occasional rent for transient meeting and office spaces

in shared office space facilities.

For the nine months ended September 30, 2023

We had operating leases with terms greater than

12 months for office space in four multi-tenant facilities, which are recorded as Operating lease right-of-use assets and Operating lease

For the three months ended March 31, 2024

and 2023, 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:

Nine Months Ended

September 30,

Three Months Ended

Operating lease cost

3 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

(in thousands, excepts share and per share data)

NOTE 6 – LEASES (CONTINUED)

The table below presents the future minimum lease

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

As of September 30, 2023

payments to be made under operating leases in each of the remainder of the current and next four fiscal years and thereafter:

As of March 31, 2024

2024 (remainder)

Total lease liabilities

The remaining lease term at September 30,

2023 for the operating lease is 4 years, 9 months, and the discount rate used in calculating the operating lease asset and liability is

Cash paid for amounts included in the measurement of lease liabilities was $ 53,027 and $ 66,244 for the nine months ended September 30,

The weighted average remaining lease term at March 31,

2024 for the operating lease is 3.0 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 $ 54 and $ 22 for the three months ended March 31,

2024 and 2023, respectively.

For the nine months ended September 30, 2023 and 2022, payments on lease obligations were $ 60,095 and

For the three months ended March 31, 2024 and 2023, payments on lease obligations were $ 65 and $ 25 ,

respectively, and amortization on the right of use assets was $ 51 and $ 25 , respectively.

2 unchanged sentences

The Company had 10,000,000 shares of preferred

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

stock, $ 0.001 par value per share, authorized as of March 31, 2024.

No shares were issued or outstanding in either 2024 or 2023.

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

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

$ 0.001 par value per share, authorized as of March 31, 2024.

There were 18,180,482 and 18,158,282 shares of common stock outstanding,

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

During the quarters ended September 30, 2023,

June 30, 2023 and March 31, 2023, the Company issued 0 , 10,000 and 9,668 shares of our common stock, respectively, and received proceeds

of $ 0 , $ 105,100 and $ 40,606 , respectively, in connection with the exercise of options under our 2013 Incentive Plan.

During the quarters ended September 30, 2022,

June 30, 2022 and March 31, 2022, the Company issued 68,751 , 43,701 and 28,006 shares of our common stock, respectively, and received

proceeds of $ 219,629 , $ 572,347 and $ 258,128 , respectively, in connection with the exercise of options under our 2013 Incentive Plan.

net of shares held in treasury of 1,741,397 and 1,741,397 at March 31, 2024 and December 31, 2023, respectively.

During the three months ended March 31, 2024,

the Company issued no shares of our common stock, and received no proceeds in connection with the exercise of options under our 2013 Incentive

Plan and our 2021 Equity Incentive Plan.

The Company issued 22,200 shares of common stock in the three months ended March 31, 2024,

in connection with the vesting of restricted stock units under our 2013 Incentive Plan and our 2021 Equity Incentive Plan.

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

Of the shares

issued to participants during the three months ended March 31, 2024, 9,423 shares, valued at $ 140 , were surrendered and subsequently

During the three months ended March 31, 2023,

the Company issued 9,668 shares of our common stock and received proceeds of $ 40 , in connection with the exercise of options under our

2013 Incentive Plan.

The Company issued 33,272 shares of common stock in the three months ended March 31, 2023, in connection with

the vesting of restricted stock units under our 2013 Incentive Plan and our 2021 Equity Incentive Plan.

9,502 shares valued at $ 171 were

surrendered in connection with the net withhold settlement method and were subsequently cancelled.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

(in thousands, excepts share and per share data)

NOTE 7 – STOCKHOLDERS’ EQUITY (CONTINUED)

The Company issued 10,149 , 35,260 and 33,272 shares

of common stock in the three months ended September 30, 2023, 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 taxes.

Of the shares issued to participants

during the nine months ended September 30, 2023, 19,488 shares, valued at $ 260,710 , were surrendered and subsequently cancelled.

The Company issued 5,438 , 0 , and 13,627 shares

of common stock in the three months ended September 30, 2022, June 30, 2022, and March 31, 2022, respectively, in connection with the

vesting of restricted stock units under our 2013 Incentive Plan and our 2021 Equity Incentive Plan.

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

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 stock.

This stock repurchase authorization expires on the earlier of March 12, 2024, or when the repurchase of $ 15 million of shares of its common

stock has been reached.

During the quarter ended June 30, 2023, the Company repurchased 526,999 shares, 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.

were no shares repurchased in the quarter ended September 30, 2023.

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.

NOTE 8 – STOCK BASED COMPENSATION

quarter ended March 31, 2023, the Board authorized a share repurchase program, under which the Company could repurchase up to $ 15.0 million

of its outstanding common stock.

This stock repurchase authorization expired on March 12, 2024.

of the quarters ended March 31, 2024 and 2023 , the Company did not repurchase any of

its outstanding shares of common stock.

Stock Options

The compensation expense related to options for

the nine months ended September 30, 2023 and 2022 was $ 4,719,779 and $ 3,624,065 , respectively.

The fair value of these instruments

was calculated using the Black-Scholes option pricing model.

There is $ 10,177,841 of remaining expense related to unvested options to

be recognized in the future over a weighted average period of 1.75 years.

The total intrinsic value of outstanding options at September 30,

2023 was $ 12,600 .

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.

the three months ended March 31, 2024 and 2023 was $ 1,353 and $ 1,467 , respectively.

The fair value of these instruments was calculated

using the Black-Scholes option pricing model.

There is $ 7,479 of remaining expense related to unvested options to be recognized in the

future over a weighted average period of 1.59 years.

The total intrinsic value of outstanding options at March 31, 2024 was $ 492 .

During 2023, 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.

no expense related to these options recorded during the period.

Restricted Stock Units

The Company recorded of $ 6,370,074 and $ 7,852,597

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

total of $ 11,247,274 remains to be recognized at September 30, 2023 over a weighted average period of 1.88 years.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

NOTE 8 – STOCK BASED COMPENSATION (CONTINUED)

The Company recorded $ 1,671 and $ 2,914 in compensation

expense related to restricted stock units for the three months ended March 31, 2024 and 2023, respectively.

A total of $ 9,967 remains

to be recognized at March 31, 2024 over a weighted average period of 1.67 years.

During 2022, the Company granted certain performance

3 unchanged sentences

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

There was $ 540,820 and $ 444,365 included in the compensation expense

discussed above related to director’s compensation for the periods ended September 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

There was $ 199 and $ 185 included in the compensation expense discussed

above related to director’s compensation for the periods ended March 31, 2024 and 2023, respectively.

NOTE 8 – LOSS PER SHARE

12 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

NOTE 9 – LOSS PER SHARE (CONTINUED)

(in thousands, excepts share and per share data)

NOTE 8 – LOSS PER SHARE

The following table sets forth the computation

1 unchanged sentence

Three Months Ended

September 30,

Nine Months Ended

September 30,

$ ( 2,865,298 )

$ ( 3,466,792 )

$ ( 13,424,460 )

$ ( 11,112,604 )

Weighted average shares outstanding used in computing net loss per share

1 unchanged sentence

Net loss per share

No calculation of diluted earnings per share is

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

The number of common shares potentially issuable

2 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

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.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2023

NOTE 9 – COMMITMENTS AND CONTINGENT LIABILITIES

From time to time, the Company may become involved

in legal proceedings or be subject to claims arising in the ordinary course of our business.

We are currently not a party to any material

legal or administrative proceedings, and we are not aware of any pending or threatened material legal or administrative proceedings against

From time to time, the Company enters into arrangements

with partners to acquire minimum amounts of media, data or messaging capabilities.

As of March 31, 2023, the Company had commitments for

future minimum payments of $ 22.6 million that will be reflected in cost of revenues during the years from 2024 through 2028.

Minimum payments

are due in the remainder of 2024 and fiscal 2025, 2026, 2027 and 2028 in the amounts of $ 8.5 million, $ 8.3 million, $ 3.3 million, $ 2.4

million and $ 0.1 million, respectively.

NOTE 10 – INCOME TAXES

The Company reported a provision for income taxes

of $ 344 for the three months ended March 31, 2024, representing an effective tax rate of ( 5.2 )%.

The effective tax rate for the three

months ended March 31, 2024 reflects the impact of certain permanent items, projected increases in our valuation allowance during

the year and discrete items for the quarter related to stock based compensation.

There was no provision for or benefit from taxes

in the three months ended March 31, 2023, as we carried a full valuation allowance against our net deferred tax assets due to our

history of losses.

As discussed in our annual report on Form 10-K

1 unchanged sentence

million as of December 31, 2023.

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

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 11 – SUBSEQUENT EVENTS

In October 2023, the Company completed the acquisition

of 100 % of the outstanding shares of Healthy Offers, Inc.

(d/b/a Medicx Health), a Nevada corporation.

On October 24, 2023, a newly formed

wholly-owned subsidiary of the Company consummated the merger with and into Medicx, with Medicx continuing as the surviving company and

a wholly-owned subsidiary of the Company (the “Merger”).

The aggregate merger consideration the Company paid to the securityholders

of Medicx at the closing was $ 95,000,000 , subject to certain customary post-acquisition purchase price adjustments.

There were $ 554,741

and $ 589,691 in costs related to the acquisition recorded in operating expense for the three and nine months ended September 30, 2023,

respectively.

Certain members of Medicx’s management team (“Management

Investors”) agreed to use a portion of the consideration received to purchase, in the aggregate, approximately $ 10.5 million of the

Company’s common stock.

On October, 24, 2023, at the closing of the Merger, each Management Investor executed a common stock purchase

agreement (the “Subscription Agreement”).

Pursuant to the Subscription Agreement, the Company issued 1,444,581 shares of its

common stock in the aggregate to the Management Investors.

A portion of the cash purchase price was funded

through debt financing.

The financing agreement provides for a term loan in the aggregate principal amount of $ 40,000,000 .

The term loan

is repayable in quarterly installments on the last business day of each fiscal quarter commencing on December 31, 2023 in an amount equal

to 1.25 % of the principal amount.

The outstanding unpaid principal amount of the term loan, and all accrued and unpaid interest thereon,

shall be due and payable on the earliest of (i) the fourth (4th) anniversary of the closing of the financing agreement and funding of

the term loan and (ii) the date on which the term loan is declared due and payable pursuant to the terms of the finance agreement.

was $ 300,000 of fees paid in loan origination fees during the three and nine months ending September 30, 2023.

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