What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-20 compared with 2024-04-15 · 1023 added, 824 removed, 430 unchanged (81% of the section changed)

Financial Statements and Supplementary Data

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

Financial Statements and Supplementary

Index to Financial Statements Required by Article

8 of Regulation S-X:

Audited Financial Statements:

F-1 Report of Independent Registered Public Accounting Firm (PCAOB id 1195 );

F-4 Consolidated Balance Sheets as of December 31, 2023 and 2022;

F-5 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022;

F-6 Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2023;

F-7 Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2022;

F-8 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022;

F-9 Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Stockholders and Board of Directors of OptimizeRx Corporation

Report of Independent Registered Public Accounting Firm;

Consolidated Balance Sheets as of December 31, 2024 and 2023;

Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023;

Consolidated Statement of Stockholders’ Equity for the Year Ended December 31, 2024;

Consolidated Statement of Stockholders’ Equity for the Year Ended December 31, 2023;

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023;

Notes to Consolidated Financial Statements

Independent Registered Public Accounting Firm

To the Stockholders and Board

of Directors of

OptimizeRx Corporation

on the Financial Statements

13 unchanged sentences

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

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

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

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

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

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

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

our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable

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

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

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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

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

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

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

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used

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

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

the Stockholders and Board of Directors of OptimizeRx Corporation

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements

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

(1) relate to accounts or disclosures that are

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

The communication

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

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

or disclosures to which they related.

audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were

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

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

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

The communication of

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

by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures

to which they related.

To the Stockholders and Board

of Directors of OptimizeRx Corporation

Audit Matter - Revenue Recognition

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

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

principal considerations for our determination that performing procedures relating to revenue recognition is a critical audit matter

is that significant judgment is exercised by the Company in determining revenue recognition for customer agreements and includes the

(1) determining whether services are considered distinct performance obligations that should be accounted for separately versus

together, (2) the pattern and timing of delivery for each distinct performance obligation, and (3) identification and treatment of contract

terms that may impact the timing and amount of revenue recognized.

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

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

The principal

considerations for our determination that performing procedures relating to revenue recognition is a critical audit matter is that significant

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

(1) determining whether services

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

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

amount of revenue recognized.

the Critical Audit Matter Was Addressed in the Audit

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

(1) obtaining an understanding of the design

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

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

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

(1) obtaining an understanding of the design and

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

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

and treatment of contract terms, (3) testing the mathematical accuracy of management’s calculations of revenue and the associated

2 unchanged sentences

the contract terms and conditions of agreements and completion of the Company’s performance obligations under the contract.

Audit Matter – Business Combination and Valuation of Intangible Assets

disclosed in Notes 3 and 7 to the consolidated financial statements, on October 24, 2023, the Company completed the acquisition of Healthy

(d/b/a Medicx Health or “Medicx”) for total consideration of approximately $95.9 million.

Of the acquired intangible

assets, $34 million of customer relationships and $8.3 million of technology solutions were recorded.

The valuation methods used to determine

the estimated fair value of these intangible assets included the multi-period excess earnings approach for customer relationships and

the relief from royalty method for technology solutions.

Several significant assumptions and estimates were involved in the application

of these valuation methods, including forecasted revenues, royalty rates, gross margins, discount rates, and attrition rates.

principal considerations for our determination that performing procedures relating to the valuation of customer relationships and developed

technology acquired in the acquisition of Medicx is a critical audit matter are (i) the significant judgment used by management when

developing the fair value estimate of the customer relationships and developed technology acquired, (ii) a high degree of auditor judgment,

subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the forecasted

revenues, gross margins, discount rate, and attrition rate for customer relationships and forecasted revenues, royalty rate, and discount

rate for developed technology acquired, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

the Stockholders and Board of Directors of OptimizeRx Corporation

Audit Matter – Valuation of Goodwill

in Notes 2 and 7 to the consolidated financial statements, the Company evaluates goodwill for impairment on an annual basis as of December

31 or more frequently if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

goodwill balance as of December 31, 2024, was $70.9 million.

The Company’s goodwill impairment assessment involves comparing the

fair value of each reporting unit to its carrying value.

The Company estimates the fair value of its reporting units using a weighting

of fair values derived from the income and market approaches.

The determination of fair value using the income approach is based on the

present value of estimated future cash flows, which requires management to make significant estimates and assumptions of revenue growth

rates and operating margins, and selection of the discount rate.

The determination of the fair value using the market approach requires

management to make significant assumptions related to market multiples of earnings derived from comparable publicly traded companies with

similar operating and investment characteristics as the reporting unit.

quarter ended September 30, 2024, the Company identified circumstances that would be indicative of possible impairment and recorded impairment

expense of $7.5 million.

Based on the results of the Company’s annual impairment testing as of December 31, 2024, no impairment

was recognized as the fair value of the Company’s reporting units exceeded their carrying value.

We identified

the Company’s goodwill impairment assessments as a critical audit matter because of the significant estimates and assumptions used

by management to estimate the fair value of the reporting unit.

This required a high degree of auditor judgment and an increased extent

of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of

management’s estimates and assumptions of future cash flows based on estimates of revenue growth rates and gross profit margins

and selection of the discount rate for the income approach, and multiples of earnings for the market approach.

To the Stockholders and Board

of Directors of OptimizeRx Corporation

the Critical Audit Matter Was Addressed in the Audit

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

These procedures included (i) obtaining an understanding of the design and implementation of controls relating

to the acquisition accounting, including controls over management’s valuation of the customer relationships and developed technology

acquired, (ii) reading the purchase agreement, (iii) testing management’s process for developing the fair value estimate of the

customer relationships and developed technology acquired, (iv) evaluating the appropriateness of the multi-period excess earnings and

relief from royalty methods used by management, (v) testing the completeness and accuracy of the underlying data used in the multi-period

excess earnings and relief from royalty methods, and (vi) evaluating the reasonableness of the significant assumptions used by management

related to forecasted revenues, gross margins, discount rate, and attrition rate for customer relationships and forecasted revenues,

royalty rate, and discount rate for developed technology acquired.

the reasonableness of the significant assumptions used by management related to the forecasted revenues and gross margins for customer

relationships and developed technology involved considering (i) the current and past performance of the Medicx business and (ii) whether

the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge

were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings and relief from royalty methods and (ii)

the reasonableness of the discount rate, royalty rate, and attrition rate assumptions for customer relationships and the royalty rate

assumptions for developed technology acquired.

have served as the Company’s auditor since 2020.

Heights, Michigan

Balance Sheets

procedures related to the Company’s goodwill impairment assessments included the following, among others:

(1) Obtaining an understanding of the design and implementation of controls

relating to management’s assessment of goodwill for potential impairment, including management’s controls over forecasts of future

cash flows based upon estimates of revenue growth rates and operating margins and the selection of the discount rate for the income approach,

and determination of multiples of earnings for the market approach.

(2) We evaluated the reasonableness of management’s forecasts

of future cash flows based on revenue growth rates and operating margins by comparing the forecasts to historical revenues and operating

We performed procedures to verify the mathematical accuracy of the calculations used by management.

Furthermore, we assessed

the appropriateness of the disclosures in the financial statements.

(3) With the assistance of our fair value specialists:

● We evaluated the reasonableness of the valuation methodologies.

● We evaluated the reasonableness of the discount rates used in the

income approach by developing an independent range of estimated discount rates and comparing that range to the discount rate used in the

Company’s valuation.

● We evaluated the multiples of earnings used in the market approach,

including testing the underlying source information and mathematical accuracy of the calculations.

served as the Company’s auditor since 2020.

Sterling Heights, Michigan

March 20, 2025

Firm ID # 1195

OPTIMIZERx CORPORATION

Consolidated Balance Sheets

(in thousands, except share and per share data)

Current Assets

and cash equivalents

Cash and cash equivalents

Accounts receivable, net of allowance for credit losses of $ 335 and $ 239 at December 31, 2024 and 2023, respectively

expenses and other

Current Assets

and equipment, net

and customer relationships, net

lease right-of-use assets

deposits and other assets

$ 183,373,898

$ 134,651,185

AND STOCKHOLDERS’ EQUITY

portion of long-term debt

payable – trade

Revenue share payable

portion of lease liabilities

Taxes receivable

Prepaid expenses and other

Total Current Assets

Property and equipment, net

Patent rights, net

Technology assets, net

Tradename and customer relationships, net

Operating lease right-of-use assets

Security deposits and other assets

Total Other Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

liabilities, net of current portion

tax liabilities, net

and contingencies (See Note 16)

Stockholders’

Current portion of long-term debt

Accounts payable – trade

Accrued expenses

Revenue share payable

Taxes payable

Current portion of lease liabilities

Deferred revenue

Total Current Liabilities

Non-current Liabilities

Long-term debt, net

Lease liabilities, net of current portion

Deferred tax liabilities, net

Total Liabilities

Commitments and contingencies (See Note 16)

Stockholders’ Equity

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

Common stock, $ 0.001 par value, 166,666,667 shares authorized, 20,194,697 and 19,899,679 shares issued at December 31, 2024 and 2023, respectively

Treasury stock, $ 0.001 par value, 1,741,397 and 1,214,398 purchased at December 31, 2023 and 2022, respectively

paid-in-capital

( 64,257,964 )

( 46,692,098 )

Stockholders’ Equity

LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 183,373,898

$ 134,651,185

accompanying notes are an integral part of these financial statements.

Statements of Operations

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

Additional paid-in-capital

Accumulated deficit

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

Consolidated Statements of Operations

(in thousands, except share and per share data)

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

7 unchanged sentences

Loss from operations

( 26,401,714 )

( 12,290,738 )

Other income (expense)

Interest expense

( 1,453,764 )

Interest income

1 unchanged sentence

Loss before provision for income taxes

( 25,163,788 )

( 11,438,440 )

Income tax benefit

$ ( 17,565,866 )

$ ( 11,438,440 )

Income tax (expense) benefit

Weighted average number of shares outstanding – basic

2 unchanged sentences

Loss per share – diluted

accompanying notes are an integral part of these financial statements.

Statement of Stockholders’ Equity for the Year

December 31, 2023

January 1, 2023

( 1,214,398 )

$ 172,785,800

$ ( 46,692,098 )

$ 126,110,777

compensation expense

of common stock:

stock options exercised

restricted stock units vested, net of cancelled units

of common stock

( 7,521,899 )

( 7,522,426 )

loss for the year

( 17,565,866 )

December 31, 2023

( 1,741,397 )

$ 190,792,980

$ ( 64,257,964 )

$ 126,553,174

accompanying notes are an integral part of these financial statements.

Statement of Stockholders’ Equity for the Year

December 31, 2022

January 1, 2022

$ 166,615,514

$ ( 35,253,658 )

$ 131,379,717

compensation expense

of common stock:

stock options exercised

restricted stock units vested, net of cancelled units

of common stock

( 1,214,398 )

( 20,023,044 )

( 20,024,258 )

loss for the year

( 11,438,440 )

December 31, 2022

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

Consolidated Statement of Stockholders’

Equity for the Year

Ended December 31, 2024

(in thousands, except share and per share data)

Treasury Stock

Balance, January 1, 2024

( 1,741,397 )

Stock-based compensation expense

Restricted stock

Issuance of common stock:

For restricted stock units vested, net of cancelled units

Net loss for the year

Balance, December 31, 2024

( 1,741,397 )

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

Consolidated Statement of Stockholders’

Equity for the Year

Ended December 31, 2023

(in thousands, except share and per share data)

Treasury Stock

Balance, January 1, 2023

$ ( 1,214,398 )

Stock-based compensation expense

Restricted stock

Issuance of common stock:

For stock options exercised

For acquisition

For restricted stock units vested, net of cancelled units

Repurchase of common stock

Net loss for the year

Balance, December 31, 2023

( 1,741,397 )

accompanying notes are an integral part of these financial statements.

Statements of Cash Flows

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 17,565,866 )

$ ( 11,438,440 )

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

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

Depreciation and amortization

Asset impairment charges

Impairment charges

Loss on disposal of business

Increase in bad debt expense

Bad debt expense

Stock-based compensation

Amortization of debt issuance costs

Change in operating assets and liabilities, net of the effects of acquisitions:

Accounts receivable

( 8,712,954 )

Prepaid expenses and other assets

Accounts payable

( 1,320,150 )

Revenue share payable

1 unchanged sentence

Deferred tax liabilities

( 7,695,374 )

Deferred loan fees

Deferred revenue

( 1,225,598 )

NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES

( 7,239,153 )

NET CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES

CASH FLOWS USED IN INVESTING ACTIVITIES:

2 unchanged sentences

Cash paid for acquisitions, net of cash acquired

( 82,947,264 )

( 2,000,000 )

Proceeds from sale of business

Purchase of short-term investments

( 162,777,510 )

( 55,931,821 )

Redemptions of short-term investments

1 unchanged sentence

NET CASH USED IN INVESTING ACTIVITIES

( 25,336,865 )

( 58,176,386 )

CASH FLOWS (USED IN) / PROVIDED BY FINANCING ACTIVITIES:

1 unchanged sentence

Repayment of long-term debt

( 1,710,000 )

Repurchase of common stock

( 7,522,426 )

( 20,024,258 )

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

Proceeds from exercise of stock options, net of cash paid for withholding taxes

NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES

( 18,950,777 )

NET CASH (USED IN) / PROVIDED BY FINANCING ACTIVITIES

NET DECREASE IN CASH AND CASH EQUIVALENTS

( 4,356,229 )

( 66,473,085 )

CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD

3 unchanged sentences

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

accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of

these financial statements.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

1 – ORGANIZATION AND NATURE OF BUSINESS

is a digital health technology company enabling care-focused engagement between life sciences organizations, healthcare providers, and

patients at critical junctures throughout the patient care journey.

Connecting over 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.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States

of America and are presented in US dollars.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenses during the reporting period.

Estimates and assumptions have been made in determining the allowance for credit

losses, carrying value of assets, fair values assigned to acquired long-lived assets, depreciable and amortizable lives of tangible and

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

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

Actual results could differ from

these estimates.

of Consolidation

financial statements reflect the consolidated results of OptimizeRx Corporation, a Nevada corporation, and its wholly owned subsidiaries:

OptimizeRx Corporation, a Michigan corporation, Healthy Offers, Inc., a Nevada corporation, CareSpeak Communications, Inc., a New Jersey

corporation, Cyberdiet, a controlled foreign corporation incorporated in Israel, and CareSpeak Communications D.O.O., a controlled foreign

corporation incorporated in Croatia.

Together, these companies are referred to as “OptimizeRx” and “the Company.”

All material intercompany transactions have been eliminated.

(in thousands, excepts share and per share

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

OptimizeRx Corporation (the “Company”

or “OptimizeRx”) is a digital healthcare technology company that connects over two million HCPs and millions of their patients

through an intelligent technology platform embedded within a proprietary omnichannel network.

OptimizeRx helps life science organizations

engage and support their customers through our combined HCP and DTC marketing strategies.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The financial statements of the Company have been

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

Use of Estimates

The preparation of financial statements in conformity

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

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

Estimates and assumptions have been made in determining the allowance for credit losses, carrying value of assets, fair values

assigned to acquired long-lived assets, depreciable and amortizable lives of tangible and intangible assets, the carrying value of liabilities,

the valuation allowance for deferred tax assets, the timing of revenue recognition and related revenue-share expenses, and inputs used

in the calculation of stock based compensation.

Actual results could differ from these estimates.

Principles of Consolidation

The financial statements reflect the consolidated

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

Healthy Offers, Inc., a Nevada corporation,

and CareSpeak Communications d.o.o., a controlled foreign corporation incorporated in Croatia.

Together, these companies are referred

to as “OptimizeRx” and “the Company.” All material intercompany transactions have been eliminated.

Segment Reporting

We operate in one reportable segment and use consolidated

3 unchanged sentences

patients on behalf of life science customers.

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

located internationally.

We do not prepare separate internal income statements by solution as our focus is on selling enterprise arrangements

covering multiple solutions that span the entire patient journey with a specific brand.

Reclassifications

items in the previous year financial statements have been reclassified to match the current year presentation.

Our customers are geographically located in the U.S, although we have one (1) technology

center located internationally.

We do not prepare separate internal income statements by solution as our focus is on selling enterprise

arrangements covering multiple solutions that span the entire patient journey with a specific brand.

The Company’s chief operating decision maker

(“CODM”) is its Chief Executive Officer.

The CODM allocates resources and assesses performance of the business and other activities

at the operating segment level.

The CODM assesses performance for the operating segment and decides how to allocate resources based on

net income (loss) that is also reported on the Consolidated Statement of Operations as consolidated net income (loss).

The measure of

segment assets is reported on the Consolidated Balance Sheets as total assets.

The CODM uses consolidated net income (loss) to

evaluate income generated in deciding whether to reinvest profits into the segment or to use such profits for other purposes, such as

for acquisitions or share repurchases.

Consolidated net income (loss) is used to monitor budget versus actual results.

The CODM also uses

consolidated net income (loss) in competitive analyses by benchmarking to the Company’s competitors.

The competitive analysis along

with the monitoring of budget versus actual results are used in assessing performance of the segment, and in establishing management and

variable compensation.

The CODM also regularly reviews the Consolidated Statement of Operations for segment expenses, of which the significant

expenses are related to cost of revenues and compensation, including stock-based compensation and other expenses.

Since the Company operates

as one reportable segment, all required segment financial information is found in the consolidated financial statements and notes to the

consolidated financial statements.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(in thousands, excepts share and per share

Reclassifications

Certain items in the previous year financial statements

have been reclassified to match the current year presentation.

Foreign Currency

The Company’s functional currency is the

4 unchanged sentences

Statement of Operations due to any fluctuations in the exchange rate.

and Cash Equivalents

purposes of the accompanying financial statements, the Company considers all highly liquid instruments, consisting of money market accounts,

with an initial maturity of three months or less to be cash equivalents.

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.

Value of Financial Instruments

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

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

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.

Cash and Cash Equivalents

Cash equivalents include items almost as liquid

as cash comprised of investments in AAA rated money market funds that invest in first-tier only securities, which primarily include domestic

commercial paper and securities issued or guaranteed by the U.S.

government or its agencies.

We account for marketable equity securities

in accordance with ASC 321-10, “Investments - Equity Securities”, as the shares have a readily determinable fair value quoted

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

At December 31, 2024 and 2023, we have

recorded $ 8,300 and none , respectively, of money market funds at approximate fair value.

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

held-to-maturity, available-for-sale, or trading securities, and depending upon the classification, value the security at

amortized cost or fair market value.

Fair Value of Financial Instruments

Fair value is defined as the price that would

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

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

The fair value should be calculated based on assumptions

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

In addition, the fair

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

These levels are:

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.

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.

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.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Receivable and Allowance for Credit Losses

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.

The Company does not seek collateral to secure its accounts receivable and amounts billed are 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.

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.

Company’s customers are primarily large well-capitalized companies, and historically there has been very little bad debt expense.

Bad debt expense was $ 665,973 and $ 363,512 for the years ended December 31, 2023 and 2022, respectively.

The allowance for credit

losses was $ 239,172 and $ 352,043 as of December 31, 2023 and 2022, respectively.

changes in the allowance for credit losses in each of the years ended December 31, 2023 and 2022, were as follows:

(in thousands, excepts share and per share

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.

Accounts Receivable and Allowance for Credit

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 credit losses.

In addition, the Company regularly assesses

the state of its billing operations 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 Company’s customers are primarily large

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

Bad debt expense was $ 208 and $ 666 for the years

ended December 31, 2024 and 2023, respectively.

The allowance for credit losses was $ 335 and $ 239 as of December 31, 2024 and

2023, respectively.

The changes in the allowance for credit losses

in each of the years ended December 31, 2024 and 2023, were as follows:

Balance at beginning of year

1 unchanged sentence

Balance at end of year

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

Included in accounts receivable are unbilled amounts of $ 4,198,312 , and $ 3,582,735 , at December 31, 2023, and 2022, respectively.

and Equipment

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

and three years for computer equipment using the straight-line method of depreciation for book purposes.

Maintenance and repair charges

are expensed as incurred.

Lease-related

assets, or Operating lease right-of-use (“ROU”) 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

The Company reviews all options to extend, terminate, or purchase its ROU assets at the commencement of the lease and on an ongoing

basis and accounts for these options when they are reasonably certain of being exercised.

From time to time, we may record revenue based

on our revenue recognition policies described below in advance of being able to invoice the customer.

Included in accounts receivable

are unbilled amounts of $ 3,241 , and $ 6,077 , at December 31, 2024 and 2023, respectively.

Property and Equipment

Property and equipment are stated at cost and

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

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

Maintenance and repair charges are expensed as incurred.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

Lease-related assets, or Operating lease right-of-use

(“ROU”) 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.

The Company reviews all options

to extend, terminate, or purchase its ROU assets at the commencement of the lease and on an ongoing basis and accounts for these options

when they are reasonably certain of being exercised.

Operating lease expense is recognized on a straight-line

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

short-term lease recognition exemption is applied for leases with terms at commencement of not greater than 12 months.

The short-term lease recognition exemption is

applied for leases with terms at commencement of not greater than 12 months .

Intangible Assets

Intangible assets are stated at cost.

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

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

the straight-line method.

These assets are evaluated when there is a triggering event.

Long-lived assets, such as property and equipment

and amortizing intangible assets are reviewed whenever events or changes in circumstances indicate that the related carrying amounts

may not be recoverable.

Impairment of assets with definite-lives is generally determined by comparing projected undiscounted cash flows

expected to be generated by the asset, or asset groups, to its carrying value.

If the carrying value of the long-lived asset or asset

group is not recoverable on an undiscounted basis, an impairment is recognized to the extent fair value exceeds carrying value.

the extent of impairment, if any, typically requires various estimates and assumptions including cash flows directly attributable to

the asset, the useful life of the asset and residual value, if any.

When necessary, the Company uses internal cash flow estimates, quoted

market prices and appraisals, as appropriate, to determine fair value.

Actual results could vary from these estimates.

In addition, the

remaining useful life of the impaired asset is revised, if necessary.

We recorded impairment charges of $ 0 and $ 6,738

against the value of our intangible assets during the years ended December 31, 2024 and 2023, respectively.

Goodwill represents the excess of the purchase

price over the fair value assigned to the net tangible and identifiable intangible assets of an acquired business.

Goodwill is assessed for impairment at least annually

as of December 31, of each year, or more frequently if an event occurs or circumstances change that would reduce the fair value of a reporting

unit below its carrying value.

An entity is permitted to first assess qualitative

factors to determine if a quantitative impairment test is necessary.

If we choose to use qualitative factors and determine that it is

more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment

test would be required.

The goodwill impairment test requires the Company to estimate the fair value of the reporting unit and to compare

the fair value of the reporting unit with its carrying amount.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

assets are stated at cost.

Finite-lived assets are being amortized over their estimated useful lives of fifteen to seventeen years for

patents, eight years for customer relationships, fifteen years for tradenames, two to four years for covenants not to compete, and three

to ten years for software and websites, all using the straight-line method.

These assets are evaluated when there is a triggering event.

assets, such as property and equipment and amortizing intangible assets are reviewed whenever events or changes in circumstances indicate

that the related carrying amounts may not be recoverable.

Impairment of assets with definite-lives is generally determined by comparing

projected undiscounted cash flows expected to be generated by the asset, or asset groups, to its carrying value.

If the carrying value

of the long-lived asset or asset group is not recoverable on an undiscounted basis, an impairment is recognized to the extent fair value

exceeds carrying value.

Determining the extent of impairment, if any, typically requires various estimates and assumptions including

cash flows directly attributable to the asset, the useful life of the asset and residual value, if any.

When necessary, the Company uses

internal cash flow estimates, quoted market prices and appraisals, as appropriate, to determine fair value.

Actual results could vary

from these estimates.

In addition, the remaining useful life of the impaired asset is revised, if necessary.

We recorded impairment charges of $ 6.7 million

against the value of our intangible assets during the year ended December 31, 2023.

No events or circumstances were noted that would

be indicative of any potential impairment during the year ended December 31, 2022.

represents the excess of the purchase price over the far value assigned to the net tangible and identifiable intangible assets of an

acquired business.

is assessed for impairment at least annually as of December 31, of each year, or more frequently if an event occurs or circumstances

change that would reduce the fair value of a reporting unit below its carrying value.

qualitative assessment can be performed to determine whether it is more likely than not that the fair value of the reporting unit is

less than its carrying value.

If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying

value is compared to its fair value.

fair value of a reporting unit is calculated using the income approach (including Discounted Cash Flow (“DCF”) and validated

using a market approach with the involvement of a third-party valuation specialist.

The income approach uses expected future cash flows

for the reporting unit and discounts those cash flows to present value.

Expected future cash flows are estimated using management assumptions

of growth rates, including long-term growth rates, capital expenditures and cost efficiencies.

Future acquisitions or divestitures are

not included in the expected future cash flows.

(in thousands, excepts share and per share

The fair value of a reporting unit is calculated

using the income approach (including Discounted Cash Flow (“DCF”)) and validated using a market approach with the involvement

of a third-party valuation specialist.

The income approach uses expected future cash flows for the reporting unit and discounts those

cash flows to present value.

Expected future cash flows are estimated using management assumptions of growth rates, including long-term

growth rates, capital expenditures and cost efficiencies.

The judgments made in determining the expected future cash flows used to estimate

the fair value can materially impact the Company’s financial condition and results of operations.

Future acquisitions or divestitures

are not included in the expected future cash flows.

The Company uses a discount rate based on a calculated weighted average cost of capital

9 unchanged sentences

carrying value exceeds the fair value.

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

We use a 5-step model to recognize revenue.

We recorded impairment charges of $ 7,489 and $ 0

against the value of our goodwill during the years ended December 31, 2024 and 2023, respectively.

Revenue Recognition

Recognition of revenue requires evidence of a

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

We use a 5-step model to recognize

These steps are:

identify the contract with a customer, identify the performance obligations

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

recognize revenue when or as the performance obligations are satisfied.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

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

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

obligations are satisfied.

Revenues are primarily generated from content

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.

Unless otherwise specified, revenue is recognized based

on the selling price to customers.

The Company’s contracts are generally all

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

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

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

of the delivery of content.

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

delivery of messages.

The net contract balance for contracts in progress at December 31, 2023 and 2022 was $ 2.0 million and $ 5.4 million,

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 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

For the year ended 2023, there were three contracts with customers that included a rebate clause.

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

revenue is recognized over time as the distributions occur.

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

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

The Company recognizes setup fees that are required for integrating client offerings and campaigns into the rule-based content delivery

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

in the specific situation.

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

cancellation, as set up fees are nonrefundable.

Additionally, the Company also recognizes revenue for providing program performance reporting

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

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.

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.

less than one year and the primary performance obligation is delivery of messages, or our forms of 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

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 the design of the programs and related consulting services to be performance obligations

separate from the delivery of messages.

Performance obligations which are recognized at a point in time upon delivery to the client include

the development and delivery of NPI target data lists and custom analytic and consulting projects.

The net contract balance for contracts

in progress at December 31, 2024 and 2023 was $ 4.3 million and $ 2.0 million, respectively.

The outstanding performance obligations

are expected to be satisfied during the year ended December 31, 2025.

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 2024, there

were two contracts with customers that included a rebate clause.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

As the content is distributed through the platform

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

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

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

The Company recognizes setup fees that are required for

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

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

Should a program be cancelled

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

Additionally,

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

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

This reporting revenue is recognized over time

as the messages are delivered.

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

recognized as services are performed.

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, NPI data lists, and other solutions is recognized at a point in time upon delivery to customers.

A break down is set forth in the table below.

Revenue recognized over time

Revenue recognized at

a point in time

Revenue recognized at a point in time

Total Revenue

In some instances, we license certain of our software

applications in arrangements that do not include other performance obligations.

In those instances, we record license revenue when the

software is delivered for use to the licensee.

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

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

In some instances, the Company also resells messaging

solutions that are available through channel partners that are complementary to the HCP marketing business and customer 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 the Company sells solutions on a commission basis, net revenue is recognized based on the commission-based revenue

split that the Company receives.

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

operation input and risk, the Company records the revenue based on the gross amount sold and the amount paid to the channel partner as

a cost of sales.

The amount of revenue recognized on a net basis was $ 10,999 and $ 3,471 for the years ended December 31, 2024 and 2023,

respectively.

Cost of Revenues

Cost of revenues includes revenue-share expense

and costs associated with licensing data from third parties.

Cost of revenues does not include depreciation and amortization which is

listed separately on the statements of operations.

Based on the volume of transactions that are delivered through the channel partner

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

Revenue-shares

are a negotiated percentage of the transaction fees and can also be specific to special considerations and campaigns.

In addition, we

pay revenue-share to ConnectiveRx as a result of a 2014 legal settlement in an amount equal to the greater of 10 % of financial messaging

distribution revenues generated through our integrated network, or $ 0.37 per financial message distributed through our integrated network.

Data acquisition costs consist primarily of the costs to acquire data through flat-fee data licensing agreements.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

some instances, we license certain of our software applications in arrangements that do not include other performance obligations.

those instances, we record license revenue when the software is delivered for use to the license.

In instances where our contracts included

Software as a Service, the revenue is recognized over the subscription period as services are delivered to the customer.

In some instances, the Company also resells messaging

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

These partner specific

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

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

Company receives.

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

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

of Revenues include revenue-share expense and costs associated with licensing data from third parties.

Cost of revenues does not include

depreciation and amortization which is listed separately on the statements of operations.

Based on the volume of transactions that are

delivered through the channel partner network, the Company provides a revenue-share to compensate the partner, or others, for their promotion

of the campaign.

Revenue-shares are a negotiated percentage of the transaction fees and can also be specific to special considerations

and campaigns.

taxes are computed using the asset and liability method.

Under the asset and liability method, deferred income tax assets and liabilities

are determined based on the differences between the financial reporting and tax basis of assets and liabilities and are measured using

the currently enacted tax rates and laws.

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

evidence, are not expected to be realized.

judgments are required in order to determine the realizability of these deferred tax assets.

In assessing the need for a valuation allowance,

the Company evaluates all significant available positive and negative evidence, including historical operating results, estimates of

future taxable income and the existence of prudent and feasible tax planning strategies.

Changes in the expectations regarding the realization

of deferred tax assets could materially impact income tax expense in future periods.

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

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

The tax benefit is measured based on the largest

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

It is the Company’s policy to include

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

Concentration

of Credit Risks

Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits.

has not experienced any losses in such accounts;

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

experiences financial difficulties.

As of December 31, 2023 and 2022 the Company had $ 13,260,816 and $ 15,669,837 , respectively,

in cash balances in excess of federally insured limits, primarily at Bank of America.

(in thousands, excepts share and per share

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 year ended December 31, 2024, but may become material in future periods.

Income taxes are computed using the asset and

liability method.

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

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

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

Significant judgments are required in order to

determine the realizability of these deferred tax assets.

In assessing the need for a valuation allowance, the Company evaluates all significant

available positive and negative evidence, including historical operating results, estimates of future taxable income and the existence

of prudent and feasible tax planning strategies.

Changes in the expectations regarding the realization of deferred tax assets could materially

impact income tax expense in future periods.

The Company recognizes the tax benefit from uncertain

tax positions if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the

technical merits of the position.

The tax benefit is measured based on the largest benefit that has a greater than 50 % likelihood of being

realized upon ultimate settlement.

It is the Company’s policy to include interest and penalties related to tax positions as a component

of income tax expense.

Concentration of Credit Risks

The Company maintains its cash and cash equivalents

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

The Company has not experienced any losses in such accounts;

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

As of December 31,

2024 and 2023, the Company had $ 12,973 and $ 13,261 , respectively, in cash balances in excess of federally insured limits, primarily at

Bank of America.

Research and Development

The Company expenses research and development

expenses as incurred.

There was no research and development expense for the years ended December 31, 2024 and 2023.

Advertising Costs

The Company expenses advertising costs as incurred.

Advertising costs, included in Other general and administrative expenses were $ 1,049 and $ 776 , for the years ended December 31, 2024

and 2023, respectively.

Stock-based Compensation

The Company uses the fair value method to account

for stock-based compensation.

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

capital over the period during which services are rendered.

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

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

and Development

Company expenses research and development expenses as incurred.

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

2023 and 2022.

Company expenses advertising costs as incurred.

Advertising costs, included in Other general and administrative expenses were $ 775,548

and $ 743,975 , for the years ended December 31, 2023 and 2022, respectively.

Company uses the fair value method to account for stock-based compensation.

The fair value of the equity instrument is charged directly

to compensation expense and additional paid-in capital over the period during which services are rendered.

The fair value of each award

is estimated on the date of each grant.

restricted stock awards, the fair value is based on the market value of the Company’s common stock on the date of grant.

based restricted stock units, the fair value was estimated using a Monte Carlo simulation model.

This valuation technique included estimating

the movement of stock prices and the effects of volatility, interest rates and dividends.

At the year ended December 31, 2023 there

are no market based restricted stock units outstanding.

options, fair value is estimated using the Black-Scholes option pricing model that uses the following assumptions.

Estimated volatilities

are based on the historical volatility of the Company’s common stock over the same period as the expected term of the options.

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

The Company uses

historical data to estimate option exercise behavior and to determine this term.

(in thousands, excepts share and per share

For restricted stock awards, the fair value is

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

For market based restricted stock units, the fair

value is estimated using a Monte Carlo simulation model.

This valuation technique included estimating the movement of stock prices and

the effects of volatility, interest rates and dividends.

At the year ended December 31, 2024 there are no market based restricted

stock units outstanding.

For options, fair value is estimated using the

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

Estimated volatilities are based on the historical volatility

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

The expected term of options granted represents

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

The Company uses historical data to estimate option exercise behavior

and to determine this term.

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

yield curve in effect at the time of the grant using a time period equal to the expected option term.

The Company has never paid dividends

and do not expect to pay any dividends in the future.

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

a time period equal to the expected option term.

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

Expected dividend yield

6 unchanged sentences

Weighted average grant date fair value

Black-Scholes option valuation model and other existing models were developed for use in estimating the fair value of traded options

that have no vesting restrictions and are fully transferable.

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

to, subjective assumptions including the expected stock price volatility.

The Company’s stock options have characteristics significantly

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

Per Common and Common Equivalent Share

computation of basic (loss) earnings per common share is computed using the weighted average number of common shares outstanding during

The computation of diluted (loss) earnings per common share is based on the basic weighted average number of shares outstanding

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

stock method and the average market price per share during the year.

The number of common shares potentially issuable upon the exercise

of certain awards that were excluded from the diluted loss per common share calculation in 2023 and 2022 was 31,727 and 93,626 related

to options, and 52,607 and 170,859 related to restricted stock units, for a total of 84,334 and 264,485 , respectively, because they are

anti-dilutive, as a result of the net losses incurred in each of the years ended December 31, 2023 and 2022.

The Black-Scholes option valuation model has limitations

on its effectiveness, including that it was developed for use in estimating the fair value of traded options which have no vesting restrictions

and are fully transferable and it requires the use of highly subjective assumptions, such as expected stock price volatility.

The Company’s

stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions

could materially affect the fair value estimate.

Loss Per Common and Common Equivalent Share

The computation of basic (loss) earnings per common

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

The computation of diluted (loss) earnings

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

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

during the year.

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

loss per common share calculation in 2024 and 2023 was 212,798 and 31,727 related to options, and 78,203 and 52,607 related to restricted

stock units, for a total of 291,001 and 84,334 , respectively, because they are anti-dilutive, as a result of the net losses incurred in

each of the years ended December 31, 2024 and 2023.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

computation of weighted average shares outstanding and the basic and diluted earnings per common share for the years ended December 31,

2023 and 2022 consisted of the following:

ended December 31, 2023

$ ( 17,565,866 )

(in thousands, excepts share and per share

The computation of weighted average shares outstanding

and the basic and diluted earnings per common share for the years ended December 31, 2024 and 2023 consisted of the following:

Year ended December 31, 2024

Effect of dilutive securities

$ ( 17,565,866 )

ended December 31, 2022

$ ( 11,438,440 )

Year ended December 31, 2023

Effect of dilutive securities

$ ( 11,438,440 )

Issued Accounting Guidance

Recently Issued Accounting Guidance

ASU Topic 2021-08 Business Combinations (Topic

2 unchanged sentences

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.

November 2023, the FASB issued ASU No.

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.

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 ASU 2023-07.

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 standard was effective for the Company’s fiscal year beginning January 1, 2024.

The requirements of this ASU are

disclosure-related and the adoption of this standard did not have a material effect on our financial position, results of operations,

or cash flows.

Not Yet Adopted

In December 2023, the FASB issued ASU No.

(“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.

We are currently evaluating the impact of adopting ASU 2023-09.

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 CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

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 is a healthcare consumer-focused omnichannel marketing and analytics company.

The acquisition

of Medicx Health is expected to enhance and expand the Company’s technology offerings, providing additional opportunities for revenue

acquisition date fair value of consideration transferred was calculated as follows:

(in thousands, excepts share and per share

In November 2024, the FASB issued ASU 2024-03

(“ASU 2024-03”), Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

ASU 2024-03 requires that public business entities disclose additional information about specific expense categories in the notes to financial

statements at interim and annual reporting periods.

The prescribed categories include purchases of inventory, employee compensation, depreciation,

intangible asset amortization, and depletion.

This authoritative guidance is effective for annual periods beginning after December 15,

2026 and interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effect

of this new guidance on its consolidated financial statements.

NOTE 3 - ACQUISITIONS

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

is a healthcare consumer-focused omnichannel marketing and analytics company.

We completed the acquisition of Medicx Health to enhance

and expand the Company’s technology offerings.

The acquisition date fair value of consideration

transferred was calculated as follows:

Net cash transferred

Fair value of common

stock transferred

Fair value of consideration

goodwill balance reflects the benefits associated with future iterations of the technology platforms, new customer relationships anticipated

as a result of the transaction and market participant synergies from economies of scale and is not deductible for tax purposes.

addition, the Company is required to remit, upon collection from the appropriate authorities, approximately $ 1.0 million related to certain

state and federal income tax receivables which were included on Medicx Health’s balance sheet at the date of acquisition.

has recorded $ 1.0 million in Taxes receivable, to reflect the receivables due to the Company and $ 1.0 million in Accrued expenses, to

reflect the total amount due to the former stockholders of Medicx Health.

following table summarizes the estimated fair value of assets acquired and liabilities assumed at the acquisition date:

Fair value of common stock transferred

Fair value of consideration transferred

The goodwill balance reflects the benefits associated

with future iterations of the technology platforms, new customer relationships anticipated as a result of the transaction and market participant

synergies from economies of scale and is not deductible for tax purposes.

In addition, the Company is required to remit,

upon collection from the appropriate authorities, approximately $ 1,000 related to certain state and federal income tax receivables which

were included on Medicx Health’s balance sheet at the date of acquisition.

The Company has recorded $ 1,000 in Taxes receivable, to reflect

the receivables due to the Company and $ 1,000 in Accrued expenses, to reflect the total amount due to the former stockholders of Medicx

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

The following table summarizes the estimated fair

value of assets acquired and liabilities assumed at the acquisition date:

Assets Acquired

15 unchanged sentences

Fair value of consideration transferred

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

ACQUISITIONS (CONTINUED)

Company used a third-party valuation specialist to value the intangible assets acquired.

The identifiable intangibles are being amortized

on a straight line basis over the following estimated useful lives:

The Company used a third-party valuation specialist

to value the intangible assets acquired.

The identifiable intangibles are being amortized on a straight line basis over the following

estimated useful lives:

Customer relationship intangible

2 unchanged sentences

4 to 10 years

The Company recognized $ 4.3 million of acquisition

related costs that were expensed in the current period.

These costs are included in the consolidated statement of operations in the line

item entitled “Other sales, general and administrative expenses.”

results of operations of Medicx Health have been included in the consolidated statement of operations since the date of acquisition.

amounts of revenue and net income of Medicx Health included in the Company’s consolidated statement of operations for the period

from the acquisition date until December 31, 2023, are as follows:

following represents the pro-forma consolidated statement of operations as if Medicx Health had been included in the consolidated results

of the Company for the full years ended December 31, 2023, and 2022:

The Company recognized $ 4,272 of acquisition related

costs that were expensed in the current period.

These costs are included in the consolidated statement of operations in the line item

entitled “Other sales, general and administrative expenses.”

The results of operations of Medicx Health have

been included in the consolidated statement of operations since the date of acquisition.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

The amounts of revenue and net income of Medicx

Health included in the Company’s consolidated statement of operations for the period from the acquisition date until December 31,

2023, are as follows:

The following represents the pro-forma consolidated

statement of operations as if Medicx Health had been included in the consolidated results of the Company for the full years ended December

Year ended December 31,

Pro-forma consolidated statement of operations

( 18,616,303 )

( 16,157,521 )

These amounts have been calculated after applying

2 unchanged sentences

the Term Loan and elimination of interest income on short-term investments that were used to fund the acquisition, one time transaction

related items, including the amounts incurred by the Company, discussed above and $ 9.6 million in transaction related expenses incurred

by Medicx Health.

April 14, 2022, we completed the acquisition of substantially all of the assets of EvinceMed Corp., a privately held leading provider

of delivering end-to-end automation for specialty pharmaceutical transactions.

We completed the acquisition to expand the breadth of

the solutions we offer our customers, particularly where specialty medications are involved, The acquisition included the full Market

Access Management Platform for supporting pharma manufacturers, hub providers and pharmacies to improve patient access, speed to therapy

and activation of affordability programs.

consideration was comprised of $ 2.0 million in cash, the issuance of 240,741 shares of common stock valued at $ 9,374,455 , and $ 708,334

of amounts previously paid.

The total purchase price was $ 12,082,789 .

Of the 240,741 shares of common stock, 185,185 were issued at closing

and 55,556 were issued but held back to secure potential adjustments to the purchase price that may result from the indemnification obligations

of and the EvinceMed shareholder indemnitors.

The holdback amount will be released twelve months from the closing, subject to any adjustments

for the payment by EvinceMed and the shareholder indemnitors for its and their indemnification obligations.

The purchase price was allocated

to acquired technology totaling $ 4,149,000 with an estimated useful life of 8 years and the remaining $ 7,933,789 was allocated to goodwill.

Goodwill represents the processes and synergies expected by integrating those processes with our own.

The full amount of goodwill will

be deductible for tax purposes using a 15 year life.

The increase in goodwill for the period is fully accounted for by this acquisition.

We determined pro forma data was immaterial for financial reporting purposes.

costs of approximately $ 19,739 were expensed as incurred.

related items, including the amounts incurred by the Company, discussed above and $ 9,600 in transaction related expenses incurred by Medicx

During the year ended December 31, 2023, the Company

disposed of its non-core Access business - See Item 8.

Financials Statements and Supplementary Data;

Note 7 - Goodwill and Intangible

Assets for additional information regarding this transaction.

A pro forma statement of operations for the twelve months ended December

31, 2024 is not presented for this transaction as the pro forma impacts were not material to the Company’s consolidated results.

Revenue presented in the pro forma financial consolidated

statement of operations data above includes $ 4,169 for the year ended December 31, 2023, to the Access and other non-core solutions for

which no revenue was recorded in the year ended December 31, 2024 (see also the discussion under Net Revenues in Results of Operations

for the twelve months ended December 31, 2024 in Part I, Item 2.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations).

NOTE 4 - INVESTMENT SECURITIES

There were no investment securities held at December 31,

2024 and 2023.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

INVESTMENT SECURITIES

were no investment securities held at December 31, 2023.

December 31, 2022 the Company held $ 55.9 million in U.S.

government and agency securities.

All securities had maturity dates of

less than one year.

The Company reported these securities at amortized cost.

The amortized cost approximates fair value at December 31,

2022 due to the short nature of the securities.

from the maturities of these securities during 2023 were used to partially fund the acquisition of Medicx Health.

See Note 3 - Acquisitions.

5 – PREPAID EXPENSES

expenses consisted of the following as of December 31, 2023 and 2022:

(in thousands, excepts share and per share

NOTE 5 – PREPAID EXPENSES

Prepaid expenses consisted of the following as

of December 31, 2024 and 2023:

Revenue share and exclusivity payments

Total prepaid expenses

6 – PROPERTY AND EQUIPMENT

Company owned equipment recorded at cost, which consisted of the following as of December 31, 2023 and 2022:

NOTE 6 – PROPERTY AND EQUIPMENT

The Company owned equipment recorded at cost,

which consisted of the following as of December 31, 2024 and 2023:

Computer equipment

1 unchanged sentence

Less accumulated depreciation

and equipment, net

expense was $ 99,849 and $ 85,725 for the years ended December 31, 2023 and 2022, respectively.

7 – GOODWILL AND INTANGIBLE ASSETS

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

in 2019 and CareSpeak Communications

Goodwill is not amortizable for financial statement purposes.

The Company performed its annual goodwill impairment

review in the fourth quarters of each of the years ended December 31, 2023 and 2022, and also performed an interim impairment review

as of November 30, 2023, following the completion of the transaction with Mercalis, Inc., which is discussed below.

In both cases it was

determined that the fair value of the Company’s single reporting unit was greater than its carrying value.

Property and equipment, net

Depreciation expense was $ 111 and $ 100 for the

years ended December 31, 2024 and 2023, respectively.

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

Our goodwill is related to the acquisitions of

Medicx Health in 2023, EvinceMed in 2022, RMDY Health, Inc.

in 2019 and CareSpeak Communications in 2018.

Goodwill is not amortizable

for financial statement purposes.

Goodwill is 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

During 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.

The Company estimated the implied fair value of its goodwill

using a combination of a market approach and income approach.

It was determined that the fair value of the Company’s single reporting

unit was less than its carrying value.

A noncash charge of $ 7,489 , representing the amount by which the Company’s book value exceeds

its estimated fair value, was recorded as a goodwill impairment in the year ended December 31, 2024.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

7 – GOODWILL AND INTANGIBLE ASSETS (CONTINUED)

fair value of any reporting units, used in the annual assessments in 2023 and 2022, is classified as Level 3 measurements within the

fair value hierarchy due to significant unobservable inputs such as discount rates, projections of revenue, cost of revenue and operating

expense growth rates, long-term growth rates and income tax rates.

in the carrying amount of goodwill on the consolidated balance sheet consist of the following:

Balance at January 1, 2022

(in thousands, excepts share and per share

The Company performed the annual goodwill impairment

test as of December 31, 2024.

The Company performed its annual goodwill impairment test on a quantitative basis for its single reporting

In estimating the reporting unit’s fair value, the Company performed a valuation analysis, utilizing a discounted cash flow

income approach and a guideline public company market approach.

We assigned a probability weighting to each approach of 50 %.

The determination

of the fair value of the reporting unit requires the Company to make significant estimates and assumptions about the reporting unit’s

expected future cash flows.

These estimates and assumptions primarily include, but are not limited to, the discount rate, revenue growth

rates, operating margins and multiples of earnings.

These estimates and assumptions were determined in connection with support from a

third-party valuation specialist.

The discount rate used is based on the estimated weighted-average cost of capital for companies with

profiles similar to our profile and based on an assessment of the risk inherent in those future cash flows.

To forecast the reporting

unit’s cash flows, the Company takes into consideration economic conditions and trends, historical results and recent performance,

estimated future operating results, management’s and a market participant’s view of growth rates, management’s ability

to execute on planned future strategic initiatives and anticipates future economic conditions.

Macroeconomic factors such as changes

in economies, changes in the competitive landscape, changes in government legislation, industry consolidations and other changes beyond

the Company’s control could have a positive or negative impact on achieving its targets.

Due to the inherent uncertainty involved

in making these estimates, actual results could differ from those estimates.

In addition, changes in underlying assumptions, especially

as they relate to the key assumptions detailed, could have a significant impact on the fair value of the reporting unit.

The market approach

compares the valuation multiples of similar companies to that of the associated reporting unit.

The Company then reconciles the calculated

fair values to its market capitalization.

After completing testing, it was determined that the fair value of the Company’s single reporting

unit was exactly equal to its carrying value and no further impairment to goodwill was recorded for the year ended December 31, 2024.

Any amount of negative change to the above disclosed key assumptions could result in future impairment to goodwill.

The fair value of any reporting units, used in

the annual assessments in 2024 and 2023, is classified as Level 3 measurements within the fair value hierarchy due to significant unobservable

inputs, such as discount rates, projections of revenue, cost of revenue and operating expense growth rates, long-term growth rates and

income tax rates.

Changes in the carrying amount of goodwill on

the consolidated balance sheet consist of the following:

Balance January 1, 2023

Disposal of business

( 1,310,004 )

Balance January 1, 2024

Balance December 31, 2024

During the year ended December 31, 2023,

we entered into various agreements, including a Product License Agreement and Platform Assets Purchase Agreement, with Mercalis, Inc.(“Mercalis”),

During the year ended December 31, 2023, we entered

into various agreements, including a Product License Agreement and Platform Assets Purchase Agreement, with Mercalis, Inc.(“Mercalis”),

collectively the “Transaction”.

1 unchanged sentence

assets and liabilities related to the Company’s Access and Patient Engagement technologies.

In addition, Mercalis was granted a

perpetual license to the Access products and a non-exclusive two-year term license to the Patient Engagement products.

Total consideration

due for the Transaction was $ 3,740,000 including $ 2,540,000 related to the Access products.

Access products portion of the Transaction was deemed to be the disposal of a business for accounting purposes and accordingly the Company

recorded a loss on disposal of $ 2,142,319 including the allocation of a portion of the Company’s goodwill balance of $ 1,310,004

and the net book value of the underlying technology assets of $ 3,327,844 .

assets included on the consolidated balance sheets consist of the following:

In addition, Mercalis was granted a perpetual

license to the Access products and a non-exclusive two-year term license to the Patient Engagement products.

Total consideration due for

the Transaction was $ 3,740 including $ 2,540 related to the Access products.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

The Access products portion of the Transaction

was deemed to be the disposal of a business for accounting purposes and accordingly the Company recorded a loss on disposal of $ 2,142

including the allocation of a portion of the Company’s goodwill balance of $ 1,310 and the net book value of the underlying technology

assets of $ 3,328 .

Intangible Assets

Intangible assets included on the consolidated

balance sheets consist of the following:

December 31, 2024

Amount Accumulated

Amortization Net Weighted

Patent rights $ 7,164 $ 1,647 $ 5,517 7.7

1 unchanged sentence

Other intangible assets

Tradename 134 12 122 9.7

Non-compete agreements 1,093 1,093 —

relationships

Total Tradename and customer

relationships

Customer relationships 34,923 3,226 31,697 13.6

Total other 36,150 4,331 31,819

Total intangible assets $ 53,025 $ 7,509 $ 45,516

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

7 – GOODWILL AND INTANGIBLE ASSETS (CONTINUED)

Amount Accumulated

Amortization Net Weighted

Patent rights $ 7,164 $ 979 $ 6,185 8.8

1 unchanged sentence

Other intangible assets

Tradename 134 —

Non-compete agreements 1,093 1,093 —

relationships

Customer relationships 34,923 859 34,064 14.6

Total other 36,150 1,952 34,198

Total intangible assets $ 55,702 $ 6,306 $ 49,396

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

During the year ended December 31, 2023,

we recorded asset impairment charges of $ 6,737,580 relating to Technology assets patent rights and tradenames that were not considered

to be core solutions on a go forward basis, resulting in lower projected revenues for these solutions, as well as the outcome of the disposal

we recorded asset impairment charges of $ 6,738 relating to Technology assets patent rights and tradenames that were not considered to

be core solutions on a go forward basis, resulting in lower projected revenues for these solutions, as well as the outcome of the disposal

of the Access products discussed above.

are being amortized on a straight-line basis over the following estimated useful lives.

Intangibles are being amortized on a straight-line

basis over the following estimated useful lives.

15 – 17 years

2 unchanged sentences

Technology assets

Company recorded amortization expense of $ 2,301,779 and $ 1,936,304 in the years ended December 31, 2023 and 2022, respectively.

Expected future amortization expense of the intangibles assets as of December 31, 2023 is as follows:

The Company recorded amortization expense of $ 4,218

and $ 2,302 in the years ended December 31, 2024 and 2023, respectively.

Expected future amortization expense of the intangibles assets

as of December 31, 2024 is as follows:

Year ended December 31,

NOTE 8 – DEFERRED REVENUE

The Company has several signed contracts with

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

The payments are not recorded

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

Deferred revenue was $ 473 and $ 172 as

of December 31, 2024 and 2023, respectively.

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

within 12 months, or less.

Following is a summary of activity in the deferred revenue account for the year ended December 31, 2024.

Balance January 1, 2024

Revenue recognized

Amount collected

Balance December 31, 2024

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

8 – DEFERRED REVENUE

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

The payments are not recorded as revenue until the revenue is earned under its revenue recognition policy discussed in Note

Deferred revenue was $ 171,841 and $ 164,309 as of December 31, 2023 and 2022, respectively.

These contracts are all short term

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

(in thousands, excepts share and per share

Following is a summary of activity in the deferred

2 unchanged sentences

Revenue recognized

( 12,358,640 )

Amount collected

1 unchanged sentence

Balance December 31, 2023

is a summary of activity in the deferred revenue account for the year ended December 31, 2022.

Balance January 1, 2022

Revenue recognized

( 13,455,253 )

Amount collected

Balance December 31, 2022

9 – RELATED PARTY TRANSACTIONS

the year ended December 31, 2010, the Company acquired the technical contributions and assignment of all exclusive rights to and for

a key patent in process at the time from a former Chief Executive Officer (“CEO”), in exchange for a total payment in shares

of common stock and options valued at $ 930,000 at the time of the acquisition and recorded the patent at that cost.

That patent remains

in Patents on the consolidated balance sheet as of December 31, 2023.

Lang, one of our Board Members, is the CEO of Eversana, a leading global provider of services to the life sciences industry.

is similar to other customers we generate revenue from, such as agencies or resellers.

During the years ended December 31, 2023

and 2022, we have recognized $ 335,897 and $ 401,972 , respectively, in revenue from contracts engaged with Eversana.

These contracts were

sourced by Eversana on behalf of life science customers of theirs.

The contracts are at market rates and were generated in the normal

course of business.

10 – STOCKHOLDERS’ EQUITY

Company had 10,000,000 shares of preferred stock, $ 0.001 par value per share, authorized as of December 31, 2023.

No shares were

issued or outstanding in either 2022 or 2023.

Company had 166,666,667 shares of common stock, $ 0.001 par value per share, authorized as of December 31, 2023.

There were 18,158,282

and 17,074,173 shares of common stock outstanding, net of shares held in treasury, at December 31, 2023 and 2022, respectively.

issued 24,668 shares of common stock and received proceeds of $ 181,106 in 2023 in connection with the exercise of options under our 2013

Equity Incentive Plan.

We also issued 156,910 shares of common stock and received proceeds of $ 1,205,881 in 2022 in connection with the

exercise of options under our 2013 Equity Incentive Plan.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – STOCKHOLDERS’ EQUITY (CONTINUED)

We issued 141,859 shares of common stock in 2023

and 29,945 shares of common stock in 2022 in connection with the vesting of restricted stock units under our 2013 and 2021 Equity Incentive

Plans and discussed in greater detail in Note 11, Stock Based Compensation.

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 year ended

December 31, 2023 and 2022, respectively, 42,489 and 8,416 shares, valued at $ 458,892 and $ 132,400 , were surrendered and subsequently

NOTE 9 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2010, the Company

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

Chief Executive Officer (“CEO”), in exchange for a total payment in shares of common stock and options valued at $ 930 at the

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

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

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

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

Eversana is similar to other customers we generate revenue

from, such as agencies or resellers.

During the years ended December 31, 2024 and 2023, we have recognized $ 375 and $ 336 , respectively,

in revenue from contracts engaged with Eversana.

These contracts were sourced by Eversana on behalf of life science customers of theirs.

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

Febbo, former Chief Executive Officer

of OptimizeRx was appointed to LifeMD’s board of directors during Q2 2023.

During the year ended December 31, 2024, there was revenue

in the amount of $ 434 from contracts engaged with LifeMD.

The contracts were sourced by LifeMD on behalf of their customers and are at

market rates and generated in the normal course of business.

NOTE 10 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company had 10,000,000 shares of preferred

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

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

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

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

There were 18,453,300 and 18,158,282 shares of common stock outstanding,

net of shares held in treasury, at December 31, 2024 and 2023, respectively.

The Company issued 0 shares of common stock and

received proceeds of $ 0 in 2024 in connection with the exercise of options under our 2013 Equity Incentive Plan.

We issued 24,668 shares

of common stock and received proceeds of $ 181 in 2023 in connection with the exercise of options under our 2013 Equity Incentive Plan.

The Company issued 295,018 shares of common stock

in 2024 and 141,859 shares of common stock in 2023 in connection with the vesting of restricted stock units under our 2013 and 2021 Equity

Incentive Plans.

See Note 11, Stock Based Compensation.

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 year ended December 31, 2024

and 2023, respectively, 101,381 and 42,489 shares, valued at $ 911 and $ 459 , were surrendered and subsequently cancelled.

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.

Through December 31, 2023, the Company repurchased 526,999 shares of our common stock for a total of $ 7,522,426 ,

including commissions paid on repurchases.

At December 31, 2022, the Company repurchased 1,214,398 shares of our common stock for

a total of $ 20,021,830 , including commissions paid on repurchases.

These shares were recorded as Treasury Shares using the par value method.

During the year ended December 31, 2022, the Board

authorized a share repurchase program, under which the Company may repurchase up to $ 20.0 million of its outstanding common stock.

December 31, 2022, we repurchased 1,214,398 shares of our common stock for a total of $ 20,024,258 , including commissions paid on repurchases.

These shares were recorded as Treasury Shares using the par value method.

During the quarter ended March 31, 2023, the

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

This stock repurchase authorization expired on March 12, 2024.

There were no shares repurchased

in 2024 prior to the expiration.

During the year ended December 31, 2023,

the Company repurchased 526,999 shares of our common stock for a total of $ 7,522 , including commissions paid on repurchases.

The repurchased

shares were recorded as Treasury Shares using the par value method.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

NOTE 11 – STOCK BASED COMPENSATION

7 unchanged sentences

A total of 234,512

shares of common stock underlying options and 111,628 shares of common stock underlying restricted stock unit awards were outstanding

at December 31, 2023.

shares of common stock underlying options and 8,000 shares of common stock underlying restricted stock unit awards were outstanding at

December 31, 2024.

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

5 unchanged sentences

in August 2021.

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

A total of 1,209,626 shares of common stock

underlying options and 631,581 shares of common stock underlying restricted stock unit awards were outstanding at December 31, 2023.

At December 31, 2023, 276,844 shares were available for grant under the 2021 Plan.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – 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.

A total of 1,611,338 shares of common stock underlying options and 686,326 shares of common stock

underlying restricted stock unit awards were outstanding at December 31, 2024.

At December 31, 2024, 1,161,064 shares were available

for grant under the 2021 Plan.

The 2021 Plan allows the Company to grant incentive

12 unchanged sentences

income related to options for the years ended December 31, 2024 and 2023, was $ 4,783 and $ 5,925 , respectively.

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

During the year ended December 31, 2023, we granted certain performance based options, the expense for which will be recorded over

time once the achievement of the performance is deemed probable.

No income tax benefit

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

year ended December 31, 2024, we granted certain performance based options, the expense for which will be recorded over time once

the achievement of the performance is deemed probable.

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

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

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.

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

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 $ 25 in expense related to these options recorded during the year ended December 31,

The Company had the following option activity

during the year ended December 31, 2024 and 2023:

exercise price

Options Weighted

exercise price Weighted

life (years) Aggregate

Outstanding at January 1, 2023 1,306,870 $ 31.14

Granted 426,703 $ 12.50

Exercised ( 24,668 ) $ 7.34

Expired or forfeited ( 153,844 ) $ 30.70

Outstanding at December 31, 2023 1,555,061 $ 26.38 3.4 $ 1,046

Granted 716,297 $ 5.56

Exercised — $ —

Expired or forfeited ( 425,508 ) $ 26.31

1 unchanged sentence

Exercisable, December 31, 2024 813,397 $ 30.55 2.2 $ —

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – STOCK BASED COMPENSATION

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

The table below reflects information for the total options outstanding

at December 31, 2024

Range of Exercise Prices

Range of Exercise Prices Number of

Options Weighted

life (years) Weighted

exercise price

$ 4.83 to $ 10.00 780,600 4.7 $ 5.62

3 unchanged sentences

$ 60.00 to $ 96.70 99,201 1.7 $ 75.42

Total 1,845,850 3.4 $ 18.32

The table below reflects information for the vested options outstanding

at December 31, 2024.

Range of Exercise Prices

Range of Exercise Prices Number of

Options Weighted

life (years) Weighted

exercise price

$ 4.83 to $ 10.00 47,761 2.8 $ 7.82

3 unchanged sentences

$ 60.00 to $ 96.70 97,822 1.7 $ 75.59

Total 813,397 2.2 $ 30.55

A summary of the status of the Company’s non-vested options as

1 unchanged sentence

Nonvested Options

exercise price

Nonvested at January 1, 2024

Nonvested at December 31, 2024

There is $ 8,956,198 of expense remaining to be

recognized over a period of approximately 1.77 years related to options outstanding at December 31, 2023.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – STOCK BASED COMPENSATION

There is $ 3,651 of expense remaining to be recognized

over a period of approximately 2.1 years related to options outstanding at December 31, 2024.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

Restricted Stock Units

1 unchanged sentence

unit (“RSU”) activity during the years ended December 31, 2024 and 2023:

RSUs Weighted

fair value Weighted

Outstanding at January 1, 2023 789,074 $ 36.95

Shares issued

Granted 383,406 $ 12.30

Forfeited ( 244,923 ) $ 58.18

Vested and issued ( 141,859 ) $ 31.38

Withheld and cancelled ( 42,489 ) $ 32.47

Outstanding at December 31, 2023 743,209 $ 18.62 1.7

Granted 545,772 $ 7.56

Forfeited ( 198,256 ) $ 17.76

Vested and issued ( 295,018 ) $ 17.84

3 unchanged sentences

545,772 and 383,406 units in 2024 and 2023, respectively, and valued at $ 4,128 and $ 4,715 , respectively.

These restricted stock

units vest over a period of 1 year to 5 years.

The Company recognized expense of $7,791,917 and $10,789,203 in 2023 and 2022, respectively,

related to these restricted stock units.

A total of $ 11,106,405 remains to be recognized at December 31, 2023 over a period of 1.95

These restricted stock units

vest over a period of 1 year to 5 years.

The Company recognized expense of $ 6,683 and $ 7,792 in 2024 and 2023, respectively, related to

these restricted stock units.

A total of $ 5,260 remains to be recognized at December 31, 2024 over a period of 1.88 years.

In the year ended December 31, 2024, certain

3 unchanged sentences

and $ 459 , were surrendered and subsequently cancelled.

During 2022, the Company granted certain performance

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

There was no expense related to these restricted stock units recorded during the period.

the 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 $ 25 in expense related to these restricted stock units recorded during the year

ended December 31, 2024 .

Non-employee Directors Compensation

1 unchanged sentence

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

The Company granted 26,470 restricted stock units to its non-employee

directors, valued at $ 750,130 in 2022.

The Company granted 50,305 restricted stock units, valued at $ 750

granted to the non-employee directors in 2023.

These restricted stock units vested in 2024.

There were 50,305 restricted stock units, valued at

$ 750,050 granted to the non-employee directors in 2023 that will vest in 2024, 12 months from the grant dates.

The Company granted 64,896 restricted stock

units, valued at $ 750 granted to the non-employee directors in 2024 that will vest in 2025, 12 months from the grant dates.

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

TO THE CONSOLIDATED FINANCIAL STATEMENTS

approved a grant to the Company’s then CEO of 86,685 restricted stock units and 161,698 stock options with a grant date fair value of

$ 2,500 to vest over a three year period.

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

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

( “ASC 718”).

The additional compensation value created by the termination and issuance of new equity awarded, as measured

using a Monte Carlo simulation, was approximately $ 1,900 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 above.

At December 31, 2024 the remaining expense of $ 1,556 related to the October 2021 grant of market-based

restricted stock units was accelerated upon the departure of the CEO.

The expense for unvested stock-options and restricted stock units

related to the April 2023 grant was reversed.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

NOTE 12 – LONG-TERM DEBT

3 unchanged sentences

current portion of long-term debt

( 2,000,000 )

unamortized issuance costs

( 2,059,263 )

Long-term debt, net

On October 11, 2023, the Company entered into

a Financing Agreement (the “Financing”) which provided for a term loan (the “Term Loan”) of $ 40 million, the net

proceeds of which were used to partially finance the Medicx Health transaction described in Note 3 “Acquisitions”.

In connection

with the Financing the Company incurred issuance costs of approximately $ 2.3 million, which were capitalized and are being amortized to

interest expense over the life of the Term Loan.

Amortization of debt issuance costs for the year ended December 31, 2023, was $ 210,737 .

The Company’s obligations under the Financing

a Financing Agreement (the “Financing Agreement”) which provided for a term loan (the “Term Loan”) of $ 40 million,

the net proceeds of which were used to partially finance the Medicx Health transaction described in Note 3 “Acquisitions”.

In connection with the Term Loan the Company incurred issuance costs of approximately $ 2,270 , which were capitalized and are being amortized

to interest expense over the life of the Term Loan.

Amortization of debt issuance costs for the year ended December 31, 2024 and

December 31, 2023 was $ 835 and $ 211 , respectively.

The Company’s obligations under the Term Loan

are secured by all of the Company’s and its subsidiaries’ assets (including a pledge of all of the capital stock and equity interests

1 unchanged sentence

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.

on the last business day of each fiscal quarter, beginning December 31, 2023, in an amount equivalent to 1.25 %, of the original principal

The outstanding unpaid principal amount and all accrued but unpaid interest thereon, shall be 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.

The Company may prepay, subject to an Applicable

2 unchanged sentences

all or a portion of the Term Loan and, under certain circumstances, including certain asset disposals and the raising of indebtedness

not permitted under the Financing is required to make mandatory prepayments of the principal balance.

not permitted under the Term Loan is required to make mandatory prepayments of the principal balance.

If the prepayment occurs within

5 unchanged sentences

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

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

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – LONG-TERM DEBT (CONTINUED)

During the year ended December 31, 2024,

the Company made total principal repayments of $ 1.7 million, including a mandatory prepayment of $ 1.2 million as a result of an asset

sale completed during the year.

the Company made total principal repayments of $ 4.0 million, including a voluntary prepayment of $ 2.0 million.

During the year ended December 31,

2023, the Company made total principal repayments of $ 1.7 million, including a mandatory prepayment of $ 1.2 million as a result of an

asset sale completed during the year.

At the Company’s option the Term Loan, or

1 unchanged sentence

The greater of (a) 4.00 % per annum, (b) the Federal Funds Rate plus 0.50 % per annum, (c) the one month

Secured Funds Overnight Rate (“SOFR”), plus an adjustment of 26.161 basis point and 1.00 % per annum, and (d) the rate last

quoted by The Wall Street Journal as the “Prime Rate”, plus an Applicable Margin of 7.5 %;

Secured Overnight Financing Rate (“SOFR”), plus an adjustment of 26.161 basis point and 1.00 % per annum, and (d) the rate

last quoted by The Wall Street Journal as the “Prime Rate”, plus an Applicable Margin of 7.5 %;

Three-month SOFR plus an adjustment of 26.161 basis points and an Applicable Margin of 8.5 %

3 unchanged sentences

2024 was 16.5 %.

The Financing requires the Company to maintain

the following financial covenants:

A maximum leverage ratio, as defined in the Financing as

Fiscal Quarter End

March 31, 2024

June 30, 2024

September 30, 2024

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

March 31, 2025

June 30, 2025

September 30, 2025, and thereafter

Liquidity, as defined in the Financing, of at least $ 5.0 million.

(in thousands, excepts share and per share

The Term Loan requires the Company to maintain

certain maximum leverage ratios and Liquidity (as defined in the Financing Agreement), of at least $ 5.0 million.

The Company was in compliance with its financial

covenants as of December 31, 2023, and received a waiver from its lender to extend the date for providing the Company's audited financial

statements from March 31, 2024, to April 15, 2024.

The Financing contains customary events of default,

covenants as of December 31, 2024.

The Term Loan contains customary events of default,

which include, (subject to, in certain circumstances to grace and cure periods), non-payment of principal and interest, non-compliance

with certain covenants, commencement of bankruptcy proceedings and a change in control.

Payments due on the Loan in each of the next four

years subsequent to December 31, 2023, are as follows:

Payments due on the Term Loan in each of the next

three years subsequent to December 31, 2024, are as follows:

For the year ending December 31,

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – LEASES

In February 2016, the Financial Accounting Standards

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

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

all leases to be recognized on the balance sheet.

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

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

In February 2016, the FASB issued new accounting

guidance on leases.

The accounting standard, effective January 1, 2019, requires virtually all leases to be recognized on the balance

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

liabilities, as well as the related lease expense.

We had operating leases with terms greater than

13 unchanged sentences

Total lease liabilities

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

The weighted average remaining lease term for

1 unchanged sentence

paid for amounts included in the measurement of lease liabilities was $ 227 .

For the year ended December 31, 2023, payments on

lease obligations were $ 91,228 and amortization on the right of use assets was $ 94,564 .

For the year ended December 31, 2022, payments

on lease obligations were $ 101,405 and amortization on the right of use assets was $ 101,433 .

TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2024, payments on lease

obligations were $ 260 and amortization on the right of use assets was $ 237 .

For the year ended December 31, 2023, payments on lease

obligations were $ 91 and amortization on the right of use assets was $ 95 .

NOTE 14 – MAJOR CUSTOMERS AND VENDORS

2 unchanged sentences

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

Our accounts receivable included two agencies,

Our accounts receivable included three agencies,

that represented multiple customers, that individually made up more than 10% of our accounts receivable at December 31, 2024 in the

percentages of 32.0 %, 21.1 % and 11.2 %.

As of December 31, 2022, our accounts receivable included two entities, including one agency that

represented multiple customers that individually made up more than 10 % of our accounts receivable in the percentages of 13.3 % and 10.8 %.

As of December 31, 2023, our accounts receivable included two agencies, that represented multiple

customers, that individually made up more than 10% of our accounts receivable in the percentages of 28.3 % and 14.1 %.

The Company generates a portion of its revenues

through its EHR and ePrescribe partners.

There were three key partners and/or vendors through which 10 % or greater of its revenue was

generated in either 2023 or 2022 as set forth below.

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

through its EHR and eRx channel partners.

There were three key channel partners and/or vendors through which 10% or greater of its revenue

was generated in either 2024 or 2023 as set forth below.

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

those channel partners.

* Less than 10% of revenue

NOTE 15 – INCOME TAXES

As of December 31, 2024, the Company had

net operating loss (“NOLs”) carry-forwards for federal income tax purposes of approximately $16.7 million, consisting of pre-2018

losses in the amount of approximately $3.3 million that expire from 2033 through 2037, and post-2017 losses in the amount of approximately

$13.4 million that will never expire.

net operating loss (“NOLs”) carry-forwards for federal income tax purposes of approximately $ 11.6 million, consisting of post-2017

losses that will never expire.

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

The Company was formed

in 2008 as a Nevada Corporation.

The Company was formed in 2008

as a Nevada Corporation.

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

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

due to timing differences between book and tax reporting.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 – INCOME TAXES (CONTINUED)

In the future,

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

timing differences between book and tax reporting.

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

The provision for Federal income tax consists

4 unchanged sentences

Option exercise benefits (expenses), net of Section 162M limitations

( 3,100,000 )

Transaction costs

Goodwill impairment

Stock compensation

Other adjustments

Valuation allowance

( 2,900,000 )

Income tax benefit

Income tax (expense) benefit

Current tax benefit (expense) - Federal

1 unchanged sentence

Total current (expense)

Deferred tax benefit (expense) - Federal

Deferred tax benefit (expense) - State

Total deferred benefit

Total tax benefit on loss

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 – INCOME TAXES (CONTINUED)

Deferred tax (expense) benefit - Federal

Deferred tax (expense) benefit - State

Total deferred (expense) benefit

Income tax (expense) benefit

The cumulative tax effect of significant items

5 unchanged sentences

Section 174 capitalized expenses

Section 163 (J) interest limitation

Deferred tax assets

Deferred tax liabilities attributable to:

$ ( 12,393,000 )

$ ( 2,102,000 )

Operating lease right-of-use assets

Deferred tax liabilities

( 12,701,424 )

( 2,330,000 )

Net deferred tax (liability) asset

$ ( 981,424 )

Valuation allowance

( 3,356,000 )

( 8,162,000 )

Net deferred tax liabilities

$ ( 4,337,424 )

The valuation allowance decreased $ 4,806,000 ,

during the year ended December 31, 2023, as we determined that a portion of the deferred tax assets associated with historical NOL's

were realizable.

The ultimate realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient

taxable income during the periods in which the net operating losses expire and the temporary differences become deductible.

has determined that there is significant uncertainty that the results of future operations and the reversals of existing taxable temporary

differences will generate sufficient taxable income to realize the deferred tax assets;

OPTIMIZERx CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(in thousands, excepts share and per share

The ultimate realization of deferred tax assets

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

expire and the temporary differences become deductible.

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

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

deferred tax assets;

therefore, a valuation allowance has been recorded.

In making this determination, the Company considered historical levels of income, projections for future periods, and the significant

amount of tax deductions to be generated from the future exercise of stock options.

In making this determination, the Company considered historical

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

of stock options.

The tax years 2021 to 2024 remain open for potential

16 unchanged sentences

have been fully released.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 – 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 us.

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.

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.

From time to time, the Company enters into arrangements

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

As of December 31, 2023, the Company had commitments

for future minimum payments of $ 24.7 million that will be reflected in cost of revenues during the years from 2024 through 2028.

Minimum payments are due in 2024, 2025, 2026, 2027 and 2028 in the amounts of $ 10.6 million, $ 8.3 million, $ 3.3 million, $ 2.4 million

and $ 0.1 million, respectively.

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

As of December 31, 2024, the Company had

commitments with channel partners for future minimum payments of $ 19,737 that will be reflected in cost of revenues during the years from

2025 through 2029.

Minimum payments are due in 2025, 2026 and 2027 in the amounts of $ 14,396 , $ 3,716 and $ 1,625 , respectively.

NOTE 17 – RETIREMENT PLAN

4 unchanged sentences

of an employee’s payroll.

There was expense of $ 726,660 and $ 489,780 recorded in 2023 and 2022, respectively, for the Company’s

contributions to the plan.

There was expense of $ 837 and $ 727 recorded in 2024 and 2023, respectively, for the Company’s contributions

NOTE 18 – SUBSEQUENT EVENTS

2 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data