OptimizeRx Corp 10-Q

Item 1. Financial Statements Our condensed consolidated financial statements included in this Form 10-Q are as follows: 2 Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024; 3 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited); 4 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited); 6 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited); 7 Notes to Condensed Consolidated Financial Statements (unaudited). 1 Table of Contents OPTIMIZERX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) September 30, 2025 December 31, 2024 ASSETS (unaudited) Current assets Cash and cash equivalents $ 19,519 $ 13,380 Accounts receivable, net of allowance for credit losses of $ 260 and $ 335 at September 30, 2025 and December 31, 2024, respectively 32,227 38,212 Taxes receivable 1,747 — Prepaid expenses and other assets 2,827 2,379 Total current assets 56,320 53,971 Property and equipment, net 119 150 Other assets Goodwill 70,869 70,869 Patent rights, net 5,013 5,517 Technology assets, net 7,382 8,180 Tradename and customer relationships, net 30,042 31,819 Operating lease right of use assets 481 366 Security deposits and other assets 95 296 Total other assets 113,882 117,047 TOTAL ASSETS $ 170,321 $ 171,168 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current portion of long-term debt $ 3,300 $ 2,000 Accounts payable 2,037 2,156 Accrued expenses 10,198 8,486 Revenue share payable 2,329 5,053 Taxes payable — 318 Current portion of lease liabilities 207 168 Deferred revenue 395 473 Total current liabilities 18,466 18,654 Non-current liabilities Long-term debt, net 24,801 30,816 Lease liabilities, net of current portion 300 209 Deferred tax liabilities, net 4,491 4,491 Total liabilities 48,058 54,170 Commitments and contingencies (See Note 12) Stockholders’ equity Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, none issued and outstanding at September 30, 2025 and December 31, 2024 — — Common stock, $ 0.001 par value, 166,666,667 shares authorized, 20,333,839 and 20,194,697 shares issued at September 30, 2025 and December 31, 2024, respectively 20 20 Treasury stock, $ 0.001 par value, 1,741,397 shares held at September 30, 2025 and December 31, 2024 ( 2 ) ( 2 ) Additional paid-in-capital 206,501 201,348 Accumulated deficit ( 84,256 ) ( 84,368 ) Total stockholders’ equity 122,263 116,998 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 170,321 $ 171,168 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents OPTIMIZERX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data, unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Net revenue $ 26,067 $ 21,309 $ 77,190 $ 59,811 Cost of revenues, exclusive of depreciation and amortization presented separately below 8,551 7,862 27,695 22,456 Gross profit 17,516 13,447 49,495 37,355 Operating expenses General and administrative expenses 14,386 13,425 43,122 43,971 Goodwill impairment — 7,489 — 7,489 Depreciation and amortization 1,080 1,095 3,249 3,235 Total operating expenses 15,466 22,009 46,371 54,695 Income (loss) from operations 2,050 ( 8,562 ) 3,124 ( 17,340 ) Other income (expense) Interest expense ( 1,154 ) ( 1,524 ) ( 4,053 ) ( 4,597 ) Other income 62 38 139 113 Interest income 91 107 269 231 Total other expenses, net ( 1,001 ) ( 1,379 ) ( 3,645 ) ( 4,253 ) Income (loss) before provision for income taxes 1,049 ( 9,941 ) ( 521 ) ( 21,593 ) Income tax benefit (expense) ( 270 ) 817 633 1,561 Net income (loss) $ 779 $ ( 9,124 ) $ 112 $ ( 20,032 ) Weighted average number of shares outstanding – basic 18,576,199 18,323,542 18,519,665 18,250,775 Weighted average number of shares outstanding – diluted 19,459,877 18,323,542 19,021,905 18,250,775 Income (loss) per share – basic $ 0.04 $ ( 0.50 ) $ 0.01 $ ( 1.10 ) Income (loss) per share – diluted $ 0.04 $ ( 0.50 ) $ 0.01 $ ( 1.10 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents OPTIMIZERX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 (in thousands, except share data, unaudited) Common Stock Treasury Stock Additional Paid in Capital Accumulated Deficit Total Shares Amount Shares Amount Balance January 1, 2025 20,194,697 $ 20 ( 1,741,397 ) $ ( 2 ) $ 201,348 $ ( 84,368 ) $ 116,998 Stock based compensation expense Options — — — — 579 — 579 Restricted stock — — — — 979 — 979 Issuance of common stock For restricted stock units vested 39,489 — — — ( 87 ) — ( 87 ) Net loss — — — — — ( 2,199 ) ( 2,199 ) Balance March 31, 2025 20,234,186 $ 20 ( 1,741,397 ) $ ( 2 ) $ 202,819 $ ( 86,567 ) $ 116,270 Stock based compensation expense Options — — — — 573 — 573 Restricted stock — — — — 915 — 915 Issuance of common stock For restricted stock units vested 63,202 — — — ( 6 ) — ( 6 ) Net income — — — — — 1,532 1,532 Balance June 30, 2025 20,297,388 $ 20 ( 1,741,397 ) $ ( 2 ) $ 204,301 $ ( 85,035 ) $ 119,284 Stock based compensation expense Options — — — — 819 — 819 Restricted stock — — — — 1,137 — 1,137 Issuance of common stock — — — — — — For options exercised 22,028 — — — 338 — 338 For restricted stock units vested 14,423 — — — ( 94 ) — ( 94 ) Net income — — — — — 779 779 Balance September 30, 2025 20,333,839 $ 20 ( 1,741,397 ) $ ( 2 ) $ 206,501 $ ( 84,256 ) $ 122,263 4 Table of Contents OPTIMIZERX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 (in thousands, except share data, unaudited) Common Stock Treasury Stock Additional Paid in Capital Accumulated Deficit Total Shares Amount Shares Amount Balance January 1, 2024 19,899,679 $ 20 ( 1,741,397 ) $ ( 2 ) $ 190,793 $ ( 64,258 ) $ 126,553 Stock based compensation expense Options — — — — 1,353 — 1,353 Restricted stock — — — — 1,671 — 1,671 Issuance of common stock For restricted stock units vested 22,200 — — — ( 140 ) — ( 140 ) Net loss — — — — — ( 6,900 ) ( 6,900 ) Balance March 31, 2024 19,921,879 $ 20 ( 1,741,397 ) $ ( 2 ) $ 193,677 $ ( 71,158 ) $ 122,537 Stock based compensation expense Options — — — — 1,149 — 1,149 Restricted stock — — — — 1,753 — 1,753 Issuance of common stock For restricted stock units vested 140,028 — — — ( 415 ) — ( 415 ) Net loss — — — — — ( 4,008 ) ( 4,008 ) Balance June 30, 2024 20,061,907 $ 20 ( 1,741,397 ) $ ( 2 ) $ 196,164 $ ( 75,166 ) $ 121,016 Stock based compensation expense Options — — — — 992 — 992 Restricted stock — — — — 1,612 — 1,612 Issuance of common stock — For restricted stock units vested 7,525 — — — ( 31 ) — ( 31 ) Net loss — — — — — ( 9,124 ) ( 9,124 ) Balance September 30, 2024 20,069,432 $ 20 ( 1,741,397 ) $ ( 2 ) $ 198,737 $ ( 84,290 ) $ 114,465 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents OPTIMIZERX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) For the Nine Months Ended September 30, 2025 2024 OPERATING ACTIVITIES: Net income (loss) $ 112 $ ( 20,032 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 3,249 3,235 Stock-based compensation 5,002 8,530 Goodwill impairment — 7,489 Bad debt expense — 131 Amortization of debt issuance costs 785 547 Changes in: Accounts receivable 5,985 9,795 Prepaid expenses and other assets ( 448 ) ( 1,200 ) Accounts payable ( 119 ) 527 Revenue share payable ( 2,724 ) ( 2,296 ) Accrued expenses and other liabilities 1,913 ( 1,997 ) Operating lease liabilities 15 — Deferred tax liabilities — ( 1,625 ) Taxes receivable and payable ( 2,065 ) 972 Deferred revenue ( 78 ) 615 NET CASH PROVIDED BY OPERATING ACTIVITIES 11,627 4,691 INVESTING ACTIVITIES: Purchase of property and equipment ( 47 ) ( 95 ) Capitalized software development costs ( 91 ) ( 235 ) NET CASH USED IN INVESTING ACTIVITIES ( 138 ) ( 330 ) FINANCING ACTIVITIES: Cash paid for employee withholding taxes related to the vesting of restricted stock units ( 188 ) ( 587 ) Proceeds from exercise of stock options 338 — Repayment of long-term debt ( 5,500 ) ( 1,500 ) NET CASH USED IN FINANCING ACTIVITIES ( 5,350 ) ( 2,087 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 6,139 2,274 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 13,380 13,852 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 19,519 $ 16,126 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 3,268 $ 4,081 Cash paid for income taxes $ 1,007 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION The accompanying condensed consolidated financial statements include OptimizeRx Corporation and its wholly owned subsidiaries (collectively, the “Company”, “we”, “our”, or “us”). We are a digital 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. The condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024 have been prepared by us without audit pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments necessary to present fairly our financial position at September 30, 2025, and our results of operations, changes in stockholders’ equity for the three and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024, have been made. Those adjustments consist of normal and recurring adjustments. The condensed consolidated balance sheet as of December 31, 2024, has been derived from the audited consolidated balance sheet as of that date. We operate a single reporting segment and, accordingly, use our consolidated net income (loss) as our measure of profit and loss and it is not presented separately here. Certain information and note disclosures, including a detailed discussion about the Company’s significant accounting policies, normally included in our annual consolidated financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with a reading of the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 20, 2025 (“Form 10-K”). The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for the full year. Segment Reporting We operate in one reportable segment and use consolidated net income (loss) as our measure of segment profit and loss. Overall, our business involves connecting life science companies to patients and providers. We have a common customer base of life sciences customers geographically located in the U.S. for all of our solutions, which primarily focus on all communications between our life sciences customers and with healthcare providers or patients. 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. Our chief operating decision maker (“CODM”) is our Chief Executive Officer (“CEO”). 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 Condensed Consolidated Statement of Operations as consolidated net income (loss). The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as total assets. The CODM uses consolidated net income (loss) to evaluate the 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 Condensed Consolidated Statement of Operations for segment expenses, of which the significant expenses are related to cost of revenues, exclusive of depreciation and amortization, and operating expenses. Since we operate as one reportable segment, all required segment financial information is found in the condensed consolidated financial statements. 7 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION (CONTINUED) Fair Value of Financial Instruments Fair value is defined as the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk. In addition to defining fair value, the disclosure requirements around fair value establish a fair value hierarchy for valuation inputs, which is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 – Inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined by using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The Company’s stock options and warrants are valued using Level 3 inputs. The Company's carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities, approximate their fair values due to their short maturities. NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09. We expect to adopt ASU 2023-09 for the annual period ending December 31, 2025, and the adoption will not materially affect our financial position or our results of operations, but the Company expects the adoption to result in additional disclosures. 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. In July 2025, the FASB issued ASU No. 2025-05 (“ASU 2025-05”), ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides (1) all entities with a practical expedient and (2) entities other than public business entities, with an accounting policy election when estimating credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. This authoritative guidance is effective for annual periods beginning after December 15, 8 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED) 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2025-05. In September 2025, the FASB issued ASU No. 2025-06 (“ASU 2025-06”), ASU No. 2025-06, Intangibles—Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 updates the cost capitalization threshold for internal-use software development costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. This authoritative guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements. NOTE 3 – CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 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 September 30, 2025 and December 31, 2024, we recorded $ 8,572 and $ 8,300 , respectively, of money market funds at approximate fair value. NOTE 4 – CAPITALIZED SOFTWARE COSTS The Company capitalizes certain development costs incurred in connection with software development for internal-use software platforms used in operations and for providing services to our customers. Costs incurred in the preliminary stages of development are expensed as incurred. Once the software has reached the development stage, internal and external costs, if direct, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized internal use software development costs are included in intangible assets and are amortized on a straight-line basis over the estimated useful life of the software platforms and are included in depreciation and amortization within operating expenses in the condensed consolidated statements of operations. Amortization of capitalized internal use software expense for the three and nine months ended September 30, 2025 and 2024 was $ 80 and $ 244 and $ 91 and $ 233 , respectively. The Company accumulates capitalizable costs related to current projects in a construction in process (“CIP”) software account, the balance of which was $ 217 and $ 320 at September 30, 2025 and December 31, 2024, respectively. NOTE 5 – LONG-TERM DEBT Long-term debt, net comprised of the following at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Term loan, due in 2027 $ 28,790 $ 34,290 Less: current portion of long-term debt ( 3,300 ) ( 2,000 ) Less: unamortized issuance costs ( 689 ) ( 1,474 ) Long-term debt, net $ 24,801 $ 30,816 On October 11, 2023, the Company entered into 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. In connection with the Term Loan the Company incurred issuance costs of approximately $ 2,270 , which were 9 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 5 - LONG-TERM DEBT (CONTINUED) capitalized and are being amortized to interest expense over the life of the Term Loan. Amortization of debt issuance costs for the three and nine months ended September 30, 2025 and 2024 was $ 174 and $ 785 and $ 182 and $ 547 , 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 of its subsidiaries). The Term Loan is repayable in quarterly installments on the last business day of each fiscal quarter, beginning December 31, 2023, in an amount equivalent to 1.25 %, of the original principal amount. 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 Agreement. The Company may prepay, subject to an Applicable Premium, 3 % if the prepayment is made on a date that is up to and including the first anniversary of closing, 2 %, if the prepayment is made up to and including the second anniversary, 1 % if the prepayment is made up to and including the third anniversary and zero thereafter, 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 Term Loan is required to make mandatory prepayments of the principal balance. If the prepayment occurs within 12 months of the date of the loan, the Company is also required to pay lost interest from the prepayment date to one year from the loan funding date. In addition, the Company is required to make a mandatory prepayment on March 31, of each year, commencing with 2025, equivalent to Excess Cash Flow multiplied by a percentage factor of 25 %, if the leverage ratio is 3.60 to 1.00 or less, 50 % if the leverage ratio is greater than 3.60 to 1.00 or less than or equal; to 4.10 to 1.00 and 75 %, if the leverage ratio is greater than 4.10 to 1.00. Excess Cash Flow is defined in the Financing Agreement as Consolidated EBITDA for the previous fiscal year less scheduled principal and interest payments, capital expenditure, cash taxes and any cash expenses/gains added back to net income (loss) in the calculation of Consolidated EBITDA, adjusted for any increase/decrease in working capital during the fiscal year. During the three and nine months ended September 30, 2025 and 2024, the Company made total principal repayments of $ 0.5 million and $ 5.5 million and $ 0.5 million and $ 1.5 million, respectively. At the Company’s option the Term Loan, or any portion thereof bears interest at either: a. The greater of (a) 4.00 % per annum, (b) the Federal Funds Rate plus 0.50 % per annum, (c) the one month Secured Overnight Financing Rate (“SOFR”), plus an adjustment of 26 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 %; or b. Three-month SOFR plus an adjustment of 26 basis points and an Applicable Margin of 8.5 % As of September 30, 2025, the Term Loan bears interest at 12.9 %, with an effective interest rate of 15.9 % for the three months ended September 30, 2025 and an effective interest rate of 16.8 % for the nine months ended September 30, 2025, including the impact of the amortization of debt issuance costs. 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 September 30, 2025. 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. 10 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 5 - LONG-TERM DEBT (CONTINUED) Payments due on the Term Loan in each of the next three years subsequent to September 30, 2025, are as follows: As of September 30, 2025 2025 (remainder) $ 500 2026 2,000 2027 26,290 $ 28,790 NOTE 6 – LEASES We had operating leases with terms greater than 12 months for office space in four multi-tenant facilities, which are recorded as Operating lease right-of-use assets and Operating lease liabilities. For the three and nine months ended September 30, 2025 and 2024, the Company’s lease cost consists of the following components, each of which is included in operating expenses within the Company’s condensed consolidated statements of operations: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating lease cost $ 60 $ 62 $ 182 $ 186 Short-term lease cost — 1 — 2 Total lease cost $ 60 $ 63 $ 182 $ 188 The table below presents the future minimum lease payments to be made under operating leases in each of the remainder of the current and next three fiscal years: As of September 30, 2025 2025 (remainder) $ 62 2026 214 2027 170 2028 107 Total 553 Less: discount 46 Total lease liabilities $ 507 The weighted average remaining lease term at September 30, 2025 for the operating leases is 2.61 years, and the weighted average discount rate used in calculating the operating lease asset and liability is 6.90 %. Cash paid for amounts included in the measurement of lease liabilities was $ 145 and $ 168 for the nine months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, payments on lease obligations were $ 168 and $ 193 , respectively, and amortization on the right of use assets was $ 182 and $ 175 , respectively. 11 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 7 – STOCKHOLDERS’ EQUITY Preferred Stock The Company had 10,000,000 shares of preferred stock, $ 0.001 par value per share, authorized as of September 30, 2025. No shares were issued or outstanding in either 2025 or 2024. Common Stock The Company had 166,666,667 shares of common stock, $ 0.001 par value per share, authorized as of September 30, 2025. There were 18,592,442 and 18,453,300 shares of common stock outstanding, net of shares held in treasury of 1,741,397 and 1,741,397 at September 30, 2025 and December 31, 2024, respectively. During each of the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025, the Company issued 0 , 0 and 22,028 shares of our common stock, respectively, and received $ 0 , $ 0 and $ 338 proceeds, respectively, in connection with the exercise of options under our 2013 Incentive Plan (the “2013 Plan”) and our 2021 Equity Incentive Plan (“2021 Plan”). The Company issued 39,489 , 63,202 and 14,423 shares of common stock, respectively, in the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025, in connection with the vesting of restricted stock units under our 2013 Plan and our 2021 Plan. Some of the participants utilized a net withhold settlement method, in which shares were surrendered to cover payroll withholding taxes. Of the shares issued to participants during the nine months ended September 30, 2025, 21,134 shares, valued at $ 187 , were surrendered and subsequently cancelled. During the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, the Company issued no shares of our common stock and received no proceeds in connection with the exercise of options under our 2013 Plan and our 2021 Plan. The Company issued 22,200 , 140,028 and 7,525 shares of common stock, respectively, in the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, in connection with the vesting of restricted stock units under our 2013 Plan and our 2021 Plan. Some of the participants utilized a net withhold settlement method, in which shares were surrendered to cover payroll withholding taxes. Of the shares issued to participants during the nine months ended September 30, 2024, 52,092 shares, valued at $ 586 , were surrendered in connection with the net withhold settlement method, and were subsequently cancelled. Treasury Stock During the quarter ended March 31, 2023, the Company's Board of Directors (the “ Board ”) authorized a share repurchase program, under which the Company could repurchase up to $ 15.0 million of its outstanding common stock. This stock repurchase authorization expired on March 12, 2024. During the three and nine months ended September 30, 2025 and 2024, the Company did not repurchase any of its outstanding shares of common stock . NOTE 8 – STOCK BASED COMPENSATION The Company sponsors two stock-based incentive compensation plans. In June 2013, the Board approved and adopted, and the Company’s stockholders approved, the OptimizeRx Corporation 2013 Incentive Plan, which was subsequently amended and approved in 2016, 2018, 2019, and 2020 (the “2013 Incentive Plan”). The 2013 Incentive Plan, as amended, authorized the issuance of 3,000,000 shares of Company common stock. In connection with the adoption of a new incentive plan in 2021, the Company froze the 2013 Incentive Plan. A total of 167,845 shares of common stock underlying options and 4,000 shares of common stock underlying restricted stock unit awards were outstanding under the 2013 Incentive Plan at September 30, 2025. At September 30, 2025, there were no shares available for grant under the 2013 Incentive Plan. In 2021, the Board approved and adopted the OptimizeRx Corporation 2021 Equity Incentive Plan (the “2021 Incentive Plan”). The 2021 Incentive Plan was approved by stockholders in August 2021. On June 5, 2024, at the 2024 Annual Meeting of Stockholders, the Company's stockholders approved an amendment to the 2021 Incentive Plan to increase the number of shares of common stock available for awards under the 2021 Incentive Plan by 1,950,000 shares for a total of 12 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 8 – STOCK BASED COMPENSATION (CONTINUED) 4,450,000 shares. A total of 2,237,345 shares of common stock underlying options and 941,729 shares of common stock underlying restricted stock unit awards were outstanding under the 2021 Incentive Plan at September 30, 2025. At September 30, 2025, 1,272,283 shares were available for grant under the 2021 Incentive Plan. Stock Options The compensation expense that has been charged against income related to options for the three and nine months ended September 30, 2025 and 2024 was $ 819 and $ 1,971 and $ 992 and $ 3,494 , respectively. A total of $ 8,489 remains to be recognized at September 30, 2025 over a weighted average period of 2.66 years. The total intrinsic value of outstanding options at September 30, 2025 was $ 18,519 . The fair value of these instruments was calculated using the Black-Scholes option pricing model. From time to time, the Company grants performance based stock options, the expense for which will be recorded over time once the achievement of the performance is deemed probable. There was $ 8 and $ 25 in expense related to these options recorded during the three and nine months ended September 30, 2025, respectively. There was $ 8 and $ 16 in expense related to these options for the three and nine months ended September 30, 2024. The fair value of these instruments was calculated using the Black-Scholes option pricing model. Restricted Stock Units The Company recorded $ 1,137 and $ 3,031 and $ 1,612 and $ 5,036 in compensation expense related to restricted stock units for the three and nine months ended September 30, 2025 and 2024, respectively. A total of $ 8,163 remains to be recognized at September 30, 2025 over a weighted average period of 1.24 years. The fair value of these instruments is based on the closing price of our common stock as reported on the Nasdaq Capital Market on the date of grant. From time to time, the Company grants performance based restricted stock units, the expense for which will be recorded over time once the achievement of the performance is deemed probable. There was $ 8 and $ 25 in expense related to these restricted stock units recorded during the three and nine months ended September 30, 2025, respectively. There was $ 8 and $ 16 in expense related to these restricted stock units recorded for the three and nine months ended September 30, 2024. The fair value of these instruments is based on the closing price of our common stock as reported on the Nasdaq Capital Market on the date of grant. Non-employee Director's Compensation The director's compensation program calls for the grant of restricted stock units with a one year vesting period. There was $ 189 and $ 525 and $ 189 and $ 591 included in the compensation expense discussed above related to director's compensation for the three and nine months ended September 30, 2025 and 2024, respectively. Equity Award Modification On April 16, 2023, the Compensation Committee 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 stock units. The forfeiture and accompanying grant were 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 upon their forfeiture at the departure of the CEO. 13 OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 9 – REVENUES Under ASC 606, Revenue from Contracts with Customers (“ASC 606”), 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 revenue. 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. Revenues are primarily generated from content delivery activities in which the Company delivers financial, clinical, or brand messaging through a distribution network of ePrescribers and electronic health record technology providers (channel partners), directly to consumers, or from reselling services that complement the business. This content delivery for a customer is referred to as a program. Unless otherwise specified, revenue is recognized based on the selling price to customers. The Company also generates revenue through data subscriptions. Data subscriptions can be contracted on a stand-alone basis or as a complement to content delivery. Additional services include set up and reporting. We consider these services to be complimentary to the primary performance obligation and recognized through performance of delivery of content or data. We have certain contracts which are satisfied at a point in time, primarily for consulting projects or NPI data target lists. For such contracts, we recognize revenue upon delivery of the related data, study or report. The Company’s contracts are generally all 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. The net contract balance for contracts in progress at September 30, 2025 and December 31, 2024, was $ 25,098 and $ 4,288 , respectively. The outstanding performance obligations are expected to be satisfied during the year ending 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's 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 December 31, 2024 and during the first nine months of 2025, there were two contracts with customers that included a rebate clause. As the content is distributed through the platform and network of channel partners (a transaction), these transactions are recorded, and revenue is recognized over time as the distributions 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 contract. Should a program be cancelled before completion, the balance of set up revenue is recognized at the time of cancellation, as set up fees are nonrefundable. Additionally, the Company also recognizes revenue for providing program performance reporting and maintenance. This reporting revenue is recognized over time as the messages are delivered. Program design, which is the design of the content delivery program, and related consulting services are recognized as services are performed. In some instances, we 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 include 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 14 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 9 – REVENUES (CONTINUED) that the Company receives. In instances where the Company resells these messaging solutions and has all financial risks 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 as an agent on a net basis was $ 9,216 and $ 8,370 for the nine months ended September 30, 2025 and 2024, respectively. The Company has several signed contracts with customers for the distribution of messaging, or other services, which include payment in advance. The payments are not recorded as revenue until the revenue is earned under its revenue recognition policy. Deferred revenue was $ 395 and $ 473 as of September 30, 2025 and December 31, 2024, respectively. The contracts are all short term in nature and all revenue is expected to be recognized within 12 months, or less. The following is a summary of activity for the deferred revenue account for the nine months ended September 30, 2025 and 2024, respectively: 2025 2024 Balance January 1 $ 473 $ 172 Revenue recognized ( 2,989 ) ( 3,229 ) Amount collected 3,027 3,961 Balance March 31 $ 511 $ 904 Revenue recognized ( 5,416 ) ( 1,853 ) Amount collected 5,389 2,002 Balance June 30 $ 484 $ 1,053 Revenue recognized ( 3,935 ) ( 2,721 ) Amount collected 3,846 2,454 Balance September 30 $ 395 $ 786 Disaggregation of Revenue Consistent with ASC 606, we have disaggregated our revenue by timing of revenue recognition. The majority of our revenue is recognized over time as solutions are provided. A small portion of our revenue related to program development, solution architect design, and other solutions is recognized at a point in time upon delivery to customers. A break down is set forth in the table below. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue recognized over time $ 26,067 $ 20,441 $ 77,017 $ 54,189 Revenue recognized at a point in time — 868 173 5,622 Total revenue $ 26,067 $ 21,309 $ 77,190 $ 59,811 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. The Company 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 in order to identify issues which may impact the collectability of these receivables or reserve estimates. If current or expected future economic trends, events, or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances, and the allowance is adjusted accordingly. Past-due receivable balances are written off when the Company’s collection efforts have been exhausted. The following is a summary of changes in the allowance for credit losses for the nine months ended September 30,: 15 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 9 – REVENUES (CONTINUED) 2025 2024 Balance at January 1, $ 335 $ 239 Provision for credit losses — 132 Write-offs — — Balance at March 31, $ 335 $ 371 Provision for credit losses — — Write-offs ( 75 ) — Balance at June 30, $ 260 $ 371 Provision for credit losses — ( 1 ) Write-offs — ( 31 ) Balance at September 30, $ 260 $ 339 From time to time, we may record revenue based on our revenue recognition policies in advance of being able to invoice the customer, or we may invoice the customer prior to being able to recognize the revenue. Included in accounts receivable are unbilled amounts of $ 3,722 and $ 3,241 at September 30, 2025 and December 31, 2024, respectively. Amounts billed in advance of revenue recognition are presented as deferred revenue on the condensed consolidated balance sheets. NOTE 10 – RELATED PARTY TRANSACTIONS Related party transactions include transactions between the Company and its stockholders, management, or affiliates. The following transactions were in the normal course of operations and were measured and recorded at the exchange amount, which is the amount of consideration established and agreed to by the parties. During the 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 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 Rights on the condensed consolidated balance sheet as of September 30, 2025 and December 31, 2024. 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 from which we generate revenue, such as agencies or resellers. During the three and nine months ended September 30, 2025 and 2024, we have recognized $ 250 and $ 735 and $ 200 and $ 272 , 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. NOTE 11 – INCOME (LOSS) PER SHARE Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. The number of shares related to options and restricted stock units included in diluted EPS is based on the “Treasury Stock Method” prescribed in ASC 260-10, Earnings per Share . This method assumes the theoretical repurchase of shares using proceeds of the respective stock options exercised, and for restricted stock units, the amount of compensation cost attributed to future services which have not yet been recognized, and the amount of current and deferred tax benefit, if any, that would be credited to additional paid in capital upon the vesting of the restricted stock units, at a price equal to the issuer’s average stock price during the related earnings period. Accordingly, the number of shares that could be included in the calculation of EPS in respect of the stock options and restricted stock units is dependent on this average stock price and will increase as the average stock price increases. 16 Table of Contents OPTIMIZERX CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 11 – INCOME (LOSS) PER SHARE (CONTINUED) The following table sets forth the computation of basic and diluted net income (loss) per share. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator Net income (loss) $ 779 $ ( 9,124 ) $ 112 $ ( 20,032 ) Denominator Weighted average shares outstanding used in computing net income (loss) per share Basic 18,576,199 18,323,542 18,519,665 18,250,775 Effect of dilutive stock options, warrants, and stock grants 883,678 — 502,240 — Diluted 19,459,877 18,323,542 19,021,905 18,250,775 Net income (loss) per share Basic $ 0.04 $ ( 0.50 ) $ 0.01 $ ( 1.10 ) Diluted $ 0.04 $ ( 0.50 ) $ 0.01 $ ( 1.10 ) The number of common shares potentially issuable upon the exercise of certain options and the vesting of certain restricted stock units that were excluded from the diluted loss per common share calculation are reflected in the table below. Three Months Ended September 30, Nine Months Ended September 30, Weighted average number of shares for the periods ended 2025 2024 2025 2024 Options 407,275 2,645 229,490 8,850 Unvested restricted stock unit awards 476,403 73,938 272,750 138,074 Total 883,678 76,583 502,240 146,924 NOTE 12 – COMMITMENTS AND CONTINGENCIES Litigation 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. Commitments From time to time, the Company enters into arrangements with partners to acquire minimum amounts of media, data or messaging capabilities. As of September 30, 2025, the Company had commitments for future minimum payments of $ 9,609 that will be reflected in cost of revenues during the years from 2025 through 2029. Minimum payments are due in the remainder of 2025 and fiscal 2026 and 2027 in the amounts of $ 4,151 , $ 3,833 and $ 1,625 , respectively. NOTE 13 – INCOME TAXES The Company reported a provision for income taxes of $ 270 and a benefit from income taxes of $ 633 , respectively, for the three and nine months ended September 30, 2025, representing an effective tax rate of 25.7 % and 121.5 %, respectively. The effective tax rate for the three and nine months ended September 30, 2025 reflects the impact of certain permanent 17 Table of Contents OPTIMIZERx CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, excepts share and per share data, unaudited) NOTE 13 – INCOME TAXES (CONTINUED) items and discrete items for the quarter related to projected decreases in our valuation allowance and to stock based compensation. The Company reported a benefit from income taxes of $ 817 and $ 1,561 for the three and nine months ended September 30, 2024, representing an effective tax rate of 8.2 % and 7.2 %. The effective tax rate for the three and nine months ended September 30, 2024 reflects the impact of certain permanent items, projected increases in our valuation allowance during the year and discrete items for the quarter related to stock based compensation. The Company recognizes deferred tax assets to the extent it believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies and recent results of operations. On the basis of this evaluation, as of the quarter ended March 31, 2025, the valuation allowance has been reduced to $ 1,900 to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law which is considered the enactment date under the accounting principles generally accepted in the United States (“GAAP”). OBBBA introduces significant changes to the Internal Revenue Code, including the permanent extension of many provisions of the 2017 Tax Cuts and Jobs Act (“TCJA”) and various new tax incentives and adjustments. In accordance with ASC 740, Inc o me Taxes , the effects of the new tax law will be recognized in the period of enactment. The Company has completed its initial assessment of the OBBBA corporate tax provisions. The OBBBA contained a number of U.S. corporate tax provisions of which the Company elected to expense U.S. incurred research or experimental expenditures immediately, full bonus depreciation for certain assets placed into service after January 19, 2025 and changes to Section 163(j) interest limitations. The Company has completed its initial assessment of the OBBBA corporate tax provisions in the current quarter and have determined that there is no material impact on the Company's estimated effective tax rate in 2025. The Company continues to evaluate the impact of the new legislation on its consolidated financial statements. As discussed in our annual report on Form 10-K for the year ended December 31, 2024, we had net operating loss carry-forwards for federal income tax purposes of approximately $ 11,600 as of December 31, 2024. NOTE 14 – SUBSEQUENT EVENTS Subsequent to quarter end, on October 29, 2025, the Company repaid approximately $ 2,000 of its Term Loan, reducing the outstanding balance to $ 26,790 . 18 Table of Contents