What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-15 · 460 added, 477 removed, 143 unchanged (87% of the section changed)

Financial Statements

Our condensed consolidated financial statements included in this Form

10-Q are as follows:

Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023 (unaudited);

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023 (unaudited);

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months June 30, 2024 and 2023 (unaudited);

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited);

Notes to Condensed Consolidated Financial Statements (unaudited).

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data,

Our condensed

consolidated financial statements included in this Form 10-Q are as follows:

Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 (unaudited);

Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited);

Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months September 30, 2024 and 2023 (unaudited);

Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited);

to Condensed Consolidated Financial Statements (unaudited).

CONSOLIDATED BALANCE SHEETS

thousands, except share and per share data, unaudited)

September 30,

Current assets

Cash and cash equivalents

Accounts receivable, net of allowance for credit losses of $ 371 and $ 480 at June 30, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 339 and $ 239 at September 30, 2024 and December 31, 2023, respectively

Taxes receivable

2 unchanged sentences

Property and equipment, net

Other intangibles, net

Technology assets, net

Patent rights, net

Tradename and customer relationships, net

8 unchanged sentences

Revenue share payable

Taxes payable

Current portion of lease liabilities

8 unchanged sentences

Stockholders’ equity

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2024 or December 31, 2023

Common stock, $ 0.001 par value, 166,666,667 shares authorized, 20,061,907 and 19,899,679 shares issued at June 30, 2024 and December 31, 2023, respectively

Treasury stock, $ 0.001 par value, 1,741,397 shares held at June 30, 2024 and December 31, 2023

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at September 30, 2024 or December 31, 2023

Common stock, $ 0.001 par value, 166,666,667 shares authorized, 20,069,432 and 19,899,679 shares issued at September 30, 2024 and December 31, 2023, respectively

Treasury stock, $ 0.001 par value, 1,741,397 shares held at September 30, 2024 and December 31, 2023

Additional paid-in-capital

2 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

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,

accompanying notes are an integral part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

thousands, except share and per share data, unaudited)

For the Three Months Ended

For the Six 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

Goodwill impairment

Depreciation and amortization

6 unchanged sentences

Loss before provision for income taxes

Benefit (expense) from income taxes

Benefit from income taxes

Weighted average number of shares outstanding – basic

2 unchanged sentences

Loss per share – diluted

The accompanying notes are an integral part of

these condensed consolidated financial statements.

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

(in thousands, except share data, unaudited)

Treasury Stock

Additional Paid in

accompanying notes are an integral part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

thousands, except share data, unaudited)

January 1, 2024

based compensation expense

of common stock

restricted stock units vested

March 31, 2024

based compensation expense

of common stock

restricted stock units vested

June 30, 2024

based compensation expense

of common stock

restricted stock units vested

of common stock

September 30, 2024

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

thousands, except share data, unaudited)

Balance January 1, 2023

4 unchanged sentences

For options exercised

For restricted stock units vested

restricted stock units vested

Balance March 31, 2023

( 1,214,398 )

Stock based compensation expense

based compensation expense

Restricted stock

Issuance of common stock

of common stock

For options exercised

For restricted stock units vested

restricted stock units vested

of common stock

Balance June 30, 2023

( 1,741,397 )

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

FOR THE THREE SIX MONTHS ENDED JUNE 30,

(in thousands, except share data, unaudited)

Treasury Stock

Additional Paid in

Balance January 1, 2023

( 1,214,398 )

Stock based compensation expense

Restricted stock

Issuance of common stock

For options exercised

For restricted stock units vested

Balance March 31, 2023

( 1,214,398 )

Stock based compensation expense

based compensation expense

Restricted stock

Issuance of common stock

of common stock

For options exercised

For restricted stock units vested

Repurchase of common stock

Balance June 30, 2023

restricted stock units vested

of common stock

Balance September 30, 2023

( 1,741,397 )

The accompanying notes are an integral part of

these condensed consolidated financial statements.

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

For the Six Months Ended

accompanying notes are an integral part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

thousands, unaudited)

For the Nine Months Ended

September 30,

OPERATING ACTIVITIES:

2 unchanged sentences

Stock-based compensation

Goodwill impairment

Deferred income taxes

Bad debt expense

5 unchanged sentences

Accrued expenses and other liabilities

Taxes payable

Tax receivable

Deferred revenue

11 unchanged sentences

Repurchase of common stock

Loan origination costs

Repayment of long-term debt

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

NET CASH USED IN FINANCING ACTIVITIES

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

3 unchanged sentences

Cash paid for interest

ROU assets obtained in exchange for lease obligations

Cash paid for income taxes

The accompanying notes are an integral part of

these condensed consolidated financial statements.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

NOTE 1 – NATURE OF BUSINESS AND BASIS OF

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.

accompanying notes are an integral part of these condensed consolidated financial statements.

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

accompanying condensed consolidated financial statements include OptimizeRx Corporation and its wholly owned subsidiaries (collectively,

the “Company”, “we”, “our”, or “us”).

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 two million U.S.

healthcare providers and millions of their patients through an intelligent technology platform

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.

We operate a single reporting segment and, accordingly, the consolidated statements of profit or loss

provide this information and it is not presented separately here.

The condensed consolidated financial statements

for the three and six months ended June 30, 2024 and 2023 have been prepared by us without audit pursuant to the rules and regulations

healthcare providers and millions

of their patients through an intelligent technology platform 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.

condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023 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, 2024, and our results of operations, changes in stockholders’ equity, and cash flows for

the six months ended June 30, 2024 and 2023, have been made.

Those adjustments consist of normal and recurring adjustments.

The condensed

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

Certain information and note disclosures, including

a detailed discussion about the Company’s significant accounting policies, normally included in our annual consolidated 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 consolidated financial statements and notes thereto included

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 and six

months ended June 30, 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.

In the opinion

of management, all adjustments necessary to present fairly our financial position at September 30, 2024, and our results of operations,

changes in stockholders’ equity, and cash flows for the nine months ended September 30, 2024 and 2023, have been made.

adjustments consist of normal and recurring adjustments.

The condensed consolidated balance sheet as of December 31, 2023, has been

derived from the audited consolidated condensed balance sheet as of that date.

We operate a single reporting segment and, accordingly,

use our consolidated net income as our measure of profit and loss and it is not presented separately here.

information and note disclosures, including a detailed discussion about the Company’s significant accounting policies, normally

included in our annual consolidated 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 consolidated

financial statements and notes thereto included 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 10-K”).

results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the results to be

expected for the full year.

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 and six months

ended June 30, 2023:

Three Months Ended

Six Months Ended

3 - Acquisitions in our Form 10-K for additional information regarding this transaction.

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 and nine months ended September 30, 2023:

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 business - 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 and six

months ended June 30, 2024, is not presented for this transaction as the pro forma impacts were not material to the Company’s consolidated

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

Revenue presented in the pro forma financial consolidated

statement of operations data above includes $ 1,213 and $ 3,080 , respectively related to the Access and other non-core solutions for which

no revenue was recorded in the three and six months ended June 30, 2024, (see also the discussion under Net Revenues in Results of

Operations for the three and six months ended June 30, 2024 in Part I, Item 2.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations).

Change in Accounting Estimate

In accordance with its policy, the Company periodically

reviews the stand-alone selling prices of its performance obligations under ASC 606 for use in allocating the contract prices.

effective April 1, 2024, the Company updated the methodology for determining the value of program design and consulting services from

the residual method to using an adjusted market assessment approach.

The effect of this change in estimate was immaterial to the results

for the three and six months ended June 30, 2024, but may become material in future periods.

Fair Value of Financial Instruments

Fair value is defined as the price that would

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

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

The fair value should be calculated

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

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

In addition to defining fair value, the disclosure

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

The hierarchy prioritizes the

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

Each fair value

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

measurement in its entirety.

September 30,

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

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

the year ended December 31, 2023, the Company disposed of its non-core Access business - 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.

pro forma statement of operations for the three and nine months ended September 30, 2024 is not presented for this transaction as

the pro forma impacts were not material to the Company’s consolidated results.

presented in the pro forma financial consolidated statement of operations data above includes $ 1,088 and $ 4,169 , respectively related

to the Access and other non-core solutions for which no revenue was recorded in the three and nine months ended September 30, 2024

(see also the discussion under Net Revenues in Results of Operations for the three and nine months ended September 30, 2024 in Part

Management’s Discussion and Analysis of Financial Condition and Results of Operations).

in Accounting Estimate

In accordance with its policy, the Company periodically reviews the

stand-alone selling prices of its performance obligations under Revenue from Contracts with Customers (“ASC Topic 606”)

for use in allocating the contract prices.

As a result, effective April 1, 2024, the Company updated the methodology for determining the

value of program design and consulting services from the residual method to using an adjusted market assessment approach.

The effect of

this change in estimate was immaterial to the results for the three and nine months ended September 30, 2024, but may become material

in future periods.

Value of Financial Instruments

value is defined as the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly

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

The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on

assumptions specific to the entity.

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

our own credit risk.

addition to defining fair value, the disclosure requirements around fair value establish a fair value hierarchy for valuation inputs,

which is expanded.

The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair

value are observable in the market.

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

level input that is significant to the fair value measurement in its entirety.

These levels are:

Level 1 – Inputs are based upon unadjusted

quoted prices for identical instruments traded in active markets.

Level 2 – Inputs are based upon significant

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

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

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

Level 3 – Inputs are generally unobservable

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

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

and similar techniques.

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

The Company’s carrying amounts of financial instruments,

including cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities, approximate their fair values

due to their short maturities.

NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued ASU No.

1 – Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

2 – Inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for

identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions

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

3 – Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants

would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques that include option

pricing models, discounted cash flow models, and similar techniques.

The Company’s stock options and warrants are valued using

Level 3 inputs.

Company’s carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable,

and other current liabilities, approximate their fair values due to their short maturities.

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

NEW ACCOUNTING PRONOUNCEMENTS

November 2023, the FASB issued ASU No.

2023-07 (“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.

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 ASU 2023-07.

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 information.

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.

currently evaluating the impact of adopting ASU 2023-09.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

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

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 information.

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.

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash equivalents include items almost as liquid

5 unchanged sentences

on the national stock exchange and are classified within Level 1 of the fair value hierarchy.

At June 30, 2024 and December 31, 2023,

we have recorded $ 8.1 million and none , respectively, of money market funds at cost.

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.

At September 30, 2024 and December 31, 2023,

we have recorded $ 8.2 million and none , respectively, of money market funds at approximate fair value.

CAPITALIZED SOFTWARE COSTS

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

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 use.

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 three and six months ended June 30, 2024 and 2023 was $ 71 and $ 141 and $ 48 and

The Company also capitalizes

costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality.

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.

Amortization of capitalized internal use software expense for the three and nine months ended September 30,

2024 and 2023 was $ 91 and $ 233 and $ 48 and $ 143 , respectively.

The Company accumulates capitalizable costs related to current projects

in a construction in process (“CIP”) software account, the balance of which was $ 217 and $ 696 at September 30, 2024

and December 31, 2023, respectively.

Company has a single reporting segment.

The goodwill is related to the acquisitions of Medicx Health in 2023, EvinceMed in 2022, RMDY

in 2019 and CareSpeak Communications in 2018.

Goodwill is not amortizable for financial statement purposes.

tested for impairment at a reporting segment level at least annually, as of December 31, or on an interim basis if an event occurs or

circumstances change (a “Triggering Event”).

the third quarter of 2024, the Company experienced a Triggering Event due to a sustained decline in its stock price and overall market

capitalization.

Accordingly, the Company conducted a quantitative impairment test of its goodwill at September 30, 2024.

estimated the implied fair value of its goodwill using a combination of a market approach and income approach.

At September 30, 2024 and December 31, 2023, the

carrying amounts of goodwill were $ 70.9 million and $ 78.4 million, respectively.

A noncash charge of $ 7.5 million, representing the amount

by which the Company’s book value exceeds its estimated fair value, was recorded as a goodwill impairment in the three months ended

September 30, 2024.

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

LONG-TERM DEBT

11, 2023, in connection with the acquisition of Medicx Health, we entered into a financing agreement that provided for a $ 40 million

term loan (the “Term Loan”).

debt, net comprised the following at September 30, 2024 and December 31, 2023:

Term Loan, due in 2027

current portion

unamortized issuance

Long-term debt, net

of September 30, 2024, the Term Loan bears interest at 14.0 %, with an effective rate of 16.1 %, including the impact of the amortization

of debt issuance costs of $ 182 and $ 547 for the three and nine months ended September 30, 2024, respectively.

September 30, 2024, we entered into Amendment No.

2 to the financing agreement, which extended the test period for measurement of the

leverage ratio and qualified cash measurements from September 30, 2024 to October 15, 2024.

of September 30, 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 $ 0.5 million, 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 agreement.

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 4.10 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 agreement 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 year.

of the Term Loan due under the terms of the financing agreement, 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 September 30, 2024

2024 (remainder)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, excepts share and per share data, unaudited)

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 liabilities.

the three and nine months ended September 30, 2024 and 2023, the Company’s lease costs consist of the following components,

each of which is included in operating expenses within the Company’s condensed consolidated statements of operations:

September 30,

Operating lease cost

Short-term lease cost

Total lease cost

table below presents the future minimum lease payments to be made under operating leases in each of the remainder of the current and

next four fiscal years and thereafter:

As of September 30, 2024

2024 (remainder)

Total lease liabilities

weighted average remaining lease term at September 30, 2024 for the operating leases is 2.7 years, and the weighted average discount

rate used in calculating the operating leases assets and liabilities is 6.96 %.

Cash paid for amounts included in the measurement of lease

liabilities was $ 168 and $ 53 for the nine months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30,

2024 and 2023, payments on lease obligations were $ 193 and $ 60 , respectively, and amortization on the right of use assets was $ 175 and

$ 61 , respectively.

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

software account, the balance of which was $ 393 and $ 696 at June 30, 2024 and December 31, 2023, respectively.

NOTE 5 – REVENUES

Under ASC 606, Revenue from Contracts with

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 $ 4,134 and $ 3,288 at June 30, 2024, and December 31,

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

STOCKHOLDERS’ EQUITY

Company had 10,000,000 shares of preferred stock, $ 0.001 par value per share, authorized as of September 30, 2024.

No shares were

issued or outstanding in either 2024 or 2023.

Company had 166,666,667 shares of common stock, $ 0.001 par value per share, authorized as of September 30, 2024.

There were 18,328,035

and 18,158,282 shares of common stock outstanding, net of shares held in treasury of 1,741,397 at September 30, 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.

each of the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, no shares of our common stock were issued, and

no proceeds were received in connection with the exercise of options under our 2013 Incentive Plan and our 2021 Equity Incentive Plan.

the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, 22,200 , 140,028 and 7,525 shares of common stock, respectively,

were issued 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, 2024, a total of 52,092 shares, valued at $ 585,571 ,

were surrendered and subsequently cancelled.

the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, the Company issued 9,668 , 10,000 and 0 shares of our common

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

the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, the Company issued 33,272 , 35,260 and 10,149 shares of

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

28,157 shares valued at $ 121 were surrendered in connection with the net withhold settlement method, and were subsequently cancelled.

the 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.

There were no shares repurchased in 2024

prior to the expiration.

During the three and nine months ended September 30, 2023, the

Company repurchased none and 526,999 shares of common stock, respectively, under this program for a total of $ 7,522 , including commissions

paid on repurchases.

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

STOCK BASED COMPENSATION

June 5, 2024, at the 2024 Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to the 2021 Equity Incentive

Plan to increase the number of shares of common stock available for awards under the 2021 Equity Incentive Plan by 1,950,000 shares for

a total of 4,450,000 shares.

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

compensation expense related to options for the nine months ended September 30, 2024 and 2023 was $ 3,494 and $ 4,720 , respectively.

The fair value of these instruments was calculated using the Black-Scholes option pricing model.

There is $ 4,115 of remaining expense

related to unvested options to be recognized in the future over a weighted average period of 1.57 years.

The total intrinsic value of

outstanding options at September 30, 2024 was $ 8 .

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 $ 8 and $ 16 in expense

related to these options recorded during the three and nine months ended September 30, 2024.

Company recorded $ 5,036 and $ 6,370 in compensation expense related to restricted stock units for the nine months ended September 30,

2024 and 2023, respectively.

A total of $ 6,793 remains to be recognized at September 30, 2024 over a weighted average period of

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 $ 8 and $ 16 in expense related to these restricted stock units recorded during

the three and nine months ended September 30, 2024.

director’s compensation program calls for the grant of restricted stock units with a one year vesting period.

There was $ 591 and

$ 541 included in the compensation expense discussed above related to director’s compensation for the periods ended September 30,

2024 and 2023, respectively.

Under 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 $ 6,002 and $ 3,288 at September 30, 2024, and December 31, 2023, respectively.

Amounts billed in advance

of revenue recognition are presented as deferred revenue on the condensed consolidated balance sheets.

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 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.

Revenue is recognized at

the point in time when the work product is delivered to the customer.

The net contract balance for contracts in progress at June 30,

2024 and December 31, 2023, was $ 26,766 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 half of 2024, there were two contracts with customers that included a rebate clause.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

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

the gross amount sold and the amount paid to the channel partner as

a cost of sales.

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.

Unless otherwise

specified, revenue is recognized based on the selling price to customers.

The Company’s contracts are generally less than one year

and the primary performance obligation is delivery of messages, or content, but the contract may contain additional services.

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

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

Revenue is recognized at the point in time when the work product is delivered to the customer.

The net contract balance

for contracts in progress at September 30, 2024 and December 31, 2023, was $ 23,191 and $ 2,021 , respectively.

The outstanding

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

certain circumstances, the Company will offer sales rebates to customers based on spend volume.

Rebates are contracted based on a quarterly

or annual spend amount and 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.

ended 2023 and during the first nine months of 2024, there were two contracts with customers that included a rebate clause.

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

the content is distributed through the platform and network of channel partners (a transaction), these transactions are recorded, and

transaction revenue is recognized over time as the distributions occur.

Revenue for transactions can be realized based on a price per

message, a price per redemption, as a flat fee occurring over a period of time, or upon completion of the program, depending on the client

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.

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.

In instances 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.

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 $ 786

$ 1,053 and $ 172 as of June 30, 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 six months ended June 30:

and $ 172 as of September 30, 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

nine months ended September 30:

Balance January 1 $ 172 $ 164

5 unchanged sentences

Balance June 30 $ 1,054 $ 451

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

Disaggregation of Revenue

Consistent with ASC Topic 606, we have disaggregated

our revenue by timing of revenue recognition.

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.

Revenue recognized ( 2,721 ) ( 3,043 )

Amount collected 2,453 2,780

Balance September 30 $ 786 $ 188

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

Disaggregation

with ASC Topic 606, we have disaggregated our revenue by timing of revenue recognition.

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.

A break down is set forth in the table below.

Three Months Ended

Six Months Ended

September 30,

Revenue recognized over time

Revenue recognized at a point in time

Revenue recognized at

a point in time

Total Revenue

6 unchanged sentences

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 six months ended June 30,:

experience is an integral part of the estimation process related to allowances for credit losses.

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 nine months ended September 30,:

Balance at January 1, $ 239 $ 352

5 unchanged sentences

Balance at June 30, $ 371 $ 591

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

NOTE 6 – LONG-TERM DEBT

debt, net comprised the following at June 30, 2024 and December 31, 2023:

Term loan, due in 2027

current portion

unamortized issuance costs

Long-term debt, net

As of June 30, 2024, the Term loan bears

interest at 14.1 %, with an effective rate of 16.2 %, including the impact of the amortization of debt issuance costs of $ 182 and $ 365 for

the three and six months ended June 30, 2024, respectively.

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:

of June 30, 2024

2024 (remainder)

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

NOTE 7 – LEASES

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 and six months ended June 30,

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:

Three months ended

Six Months Ended

Operating lease cost

Short-term lease cost

Total lease cost

The table below presents the future minimum lease

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

of June 30, 2024

2024 (remainder)

Total lease liabilities

The weighted average remaining lease term at June 30,

2024 for the operating lease is 2.8 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 $ 109 and $ 45 for the six months ended June 30,

2024 and 2023, respectively.

For the six months ended June 30, 2024 and 2023, payments on lease obligations were $ 127 and $ 49 , respectively,

and amortization on the right of use assets was $ 113 and $ 49 , respectively.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

NOTE 8 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company had 10,000,000 shares of preferred

stock, $ 0.001 par value per share, authorized as of June 30, 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 June 30, 2024.

There were 18,320,510 and 18,158,282 shares of common stock outstanding,

net of shares held in treasury of 1,741,397 and 1,741,397 at June 30, 2024 and December 31, 2023, respectively.

During each of the quarters ended March 31, 2024

and June 30, 2024, no shares of our common stock were issued, and no proceeds were received in connection with the exercise of options

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

During the quarters ended March 31, 2024 and June 30,

2024, 22,200 and 140,028 shares of common stock, respectively, were issued 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 six months ended June 30,

2024, a total of 48,281 shares, valued at $ 555,007 , were surrendered and subsequently cancelled.

During the quarters ended March 31, 2023 and June 30,

2023, the Company issued 9,668 and 10,000 shares of our common stock and received proceeds of $ 40 and $ 105 , respectively, in connection

with the exercise of options under our 2013 Incentive Plan.

During the quarters ended March 31, 2023 and June 30,

2023, the Company issued 33,272 and 35,260 shares of common stock in connection with the vesting of restricted stock units under our 2013

Incentive Plan and our 2021 Equity Incentive Plan.

23,217 shares valued at $ 244 were surrendered in connection with the net withhold settlement

method, and were subsequently cancelled.

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.

quarter and six months ended June 30, 2024 the

Company did not repurchase any of its outstanding shares of common stock.

During the quarter and six months

ended June 30, 2023 the Company repurchased 526,999 shares of common stock under this program for a total of $ 7,522 , including

commissions paid on repurchases.

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

NOTE 9 – STOCK BASED COMPENSATION

On June 5, 2024, at the 2024 Annual Meeting of

Stockholders, the Company’s stockholders approved an amendment to the 2021 Equity Incentive Plan to increase the number of shares of common

stock available for awards under the 2021 Equity Incentive Plan by 1,950,000 shares for a total of 4,450,000 shares.

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

Stock Options

The compensation expense related to options for

the six months ended June 30, 2024 and 2023 was $ 2,502 and $ 3,122 , respectively.

The fair value of these instruments was calculated

using the Black-Scholes option pricing model.

There is $ 5,031 of remaining expense related to unvested options to be recognized in the

future over a weighted average period of 1.57 years.

The total intrinsic value of outstanding options at June 30, 2024 was $ 214 .

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 $ 8 in expense related to these options recorded during the three and six months ended June 30, 2024.

Restricted Stock Units

The Company recorded $ 3,424 and $ 4,762 in compensation

expense related to restricted stock units for the six months ended June 30, 2024 and 2023, respectively.

A total of $ 8,337 remains

to be recognized at June 30, 2024 over a weighted average period of 1.52 years.

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 $ 8 in expense related to these restricted stock units recorded during the three and six months ended June 30, 2024.

The director’s compensation program calls for

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

There was $ 402 and $ 352 included in the compensation expense discussed

above related to director’s compensation for the periods ended June 30, 2024 and 2023, respectively.

NOTE 10 – 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 that

could be included 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

Six Months Ended

Weighted average shares outstanding used in computing net loss per share

Effect of dilutive stock options, warrants, and stock grants

Bad debt expense ( 1 ) 239

Write-offs 31 9

Balance at September 30, $ 339 $ 821

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

Party Transactions

party transactions include transactions between the Company and its shareholders, management, or affiliates.

The following transactions

were in the normal course of operations and were measured and recorded at the exchange amount, which is the amount of consideration established

and agreed to by the parties.

During the three months ended September 30, 2024 we sold to Eversana and LifeMD resulting in $ 0.2 million

recognized revenue where one or more of our executive officers or members of our Board of Directors were, during the periods presented,

an executive officer or a board member.

All of the related party transactions were made at current market rates.

LOSS PER SHARE

earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding

during the period.

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

Accordingly, the number of shares that could be included 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.

following table sets forth the computation of basic and diluted net loss per share.

September 30,

Weighted average

shares outstanding used in computing net loss per share

of dilutive stock options, warrants, and stock grants

Net loss per share

OPTIMIZERX CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

(in thousands, excepts

share and per share data, unaudited)

The number of common shares potentially issuable

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.

number of common shares potentially issuable 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

September 30,

Nine Months Ended

September 30,

Weighted average number of shares for the periods ended

Unvested restricted stock unit awards

NOTE 11 – 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 June 30, 2024, the Company had commitments

for future minimum payments of $ 18.5 million that will be reflected in cost of revenues during the years from 2024 through 2028.

payments are due in the remainder of 2024 and fiscal 2025, 2026, 2027 and 2028 in the amounts of $ 3.9 million, $ 8.5 million, $ 3.6 million,

$ 2.4 million and $ 0.1 million, respectively.

NOTE 12 – INCOME TAXES

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, excepts share and per share data, unaudited)

COMMITMENTS AND CONTINGENCIES

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 us.

time to time, the Company enters into arrangements with partners to acquire minimum amounts of media, data or messaging capabilities.

As of September 30, 2024, the Company had commitments for future minimum payments of $ 16.7 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 $ 1.8 million, $ 8.8 million, $ 3.6 million, $ 2.4 million and $ 0.1 million, respectively.

The Company reported a benefit from income taxes

of $ 1,088 and $ 744 for the three and six months ended June 30, 2024, representing an effective tax rate of 21.4 % and 6.4 %.

The effective

tax rate for the three and six months ended June 30, 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 and six months ended June 30, 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

for the year ended December 31, 2023, we had net operating loss carry-forwards for federal income tax purposes of approximately $ 16.7

million as of December 31, 2023.

NOTE 13 – SUBSEQUENT EVENTS

of $ 817 and $ 1,561 for the three and nine months ended September 30, 2024, representing an effective tax rate of 8.2 % and 7.2 %.

effective tax rate for the three and nine months ended September 30, 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.

was no provision for or benefit from taxes in the three and nine months ended September 30, 2023, as we carried a full valuation

allowance against our net deferred tax assets due to our history of losses.

discussed in our annual report on Form 10-K for the year ended December 31, 2023, we had net operating loss carry-forwards for federal

income tax purposes of approximately $ 16.7 million as of December 31, 2023.

SUBSEQUENT EVENTS

to September 30, 2024, we made a voluntary principal payment of $ 2 million on our Term Loan balance.

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