OPRX OptimizeRx Corporation

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

  

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): August 8, 2024

 

OptimizeRx Corporation

(Exact name of registrant as specified in charter)

 

Nevada		001-38543		26-1265381
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

260 Charles Street, Suite 302, Waltham, MA		02453
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: 248.651.6568

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 Par Value		OPRX		The Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 8, 2024, OptimizeRx Corporation issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

 

The information in this Item 2.02 and Exhibit 99.1 attached hereto are furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

Exhibit Number		Description
99.1		Press Release, dated August 8, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	OPTIMIZERX CORPORATION
Date: August 8, 2024	By:	/s/ Edward Stelmakh
	Name:	Edward Stelmakh
	Title:	Chief Financial Officer

 

 

2

 

Exhibit 99.1

 

 

OptimizeRx Reports Second Quarter 2024 Financial Results

 

- Q2 revenue of $18.8 million, increasing 36% year-over-year

- Q2 gross profit increased 50% year-over-year to $11.7 million with a gross margin of 62%

- Won 8 DAAP deals during Q2

 

WALTHAM, Mass. – August 8, 2024 – OptimizeRx Corp. (the “Company”) (Nasdaq: OPRX), the leading provider of healthcare technology solutions helping life sciences companies reach and engage healthcare professionals (HCPs) and patients, reported results for the three months ended June 30, 2024. Quarterly comparisons are to the same year-ago period.

 

Financial Highlights 

 

●

Revenue in the second quarter of 2024 increased 36% to $18.8 million, as compared to $13.8 million in the same year ago period.

 

●

Gross profit in the second quarter of 2024 increased 50% year-over-year to $11.7 million, from $7.8 million during the second quarter of 2023.

 

●

GAAP net loss totaled $(4.0) million or $(0.22) per basic and diluted share in the second quarter, as compared to $(4.1) million or $(0.24) during the second quarter of 2023.

 

●

Non-GAAP net income in the second quarter totaled $0.3 million, or $0.02 per diluted share, as compared to non-GAAP net loss of $(0.2) million or $(0.01) per diluted share during the second quarter of 2023 (see definition of these non-GAAP measures and reconciliation to GAAP below).

 

●

Adjusted EBITDA for the second quarter of 2024 came in at $0.5 million compared to $(0.8) million in the same year ago period (see definition of this non-GAAP measure and reconciliation to GAAP below).

 

●

Cash, cash equivalents and short-term investments totaled $15.0 million as of June 30, 2024 as compared to $13.9 million as of December 31, 2023.

 

Will Febbo, OptimizeRx CEO commented, “In the second quarter, revenue came in short of our expectations and consensus midpoint while adjusted EBITDA came in above consensus. This was primarily a result of a timing issue with closing one of our largest DAAP deals. We are having success in converting our DAAP pipeline into closed deals; however, because DAAP is a new, innovative solution in the market, there are additional approvals at the pharma customer level required to close out all the items that would allow us to take the revenue in the quarter. To be more specific, one of our long-standing customers committed to moving forward with an approximately $6 million multi-brand DAAP program that was due to launch in the second quarter of 2024 and got slightly delayed in their internal approval process. Without this delay, I believe we would have exceeded consensus expectations both on the top and bottom lines.”

 

 

“In the meantime, we’ve observed a significant distinction among our top 3 pharma clients, with an average revenue per client at approximately $9.7 million, compared to an average revenue of $2.7 million for our top 20 pharma clients. This highlights the value our top clients see in our DAAP solutions, as they continue to allocate larger portions of their commercial budgets to OptimizeRx. The strong performance with our top 3 customers signals robust market adoption of our evolving solutions, which we are leveraging across other accounts.”

 

Key Performance Indicators (KPIs)*		Rolling Twelve Months Ended 6/30/2024				Rolling Twelve Months Ended 6/30/2023
		(in thousands, except percentages)
Average revenue per top 20 pharmaceutical manufacturer		$	2,699			$	1,804
Percent of top 20 pharmaceutical manufacturers that are customers			100	%			100	%
Top 20 pharmaceutical manufacturers as percent of total net revenues			65	%			59	%
Net revenue retention			124	%			89	%
Revenue per averages full-time employee (FTE)		$	658			$	565

  

2024 Financial Outlook

 

For the full year 2024, the Company is reiterating its 2024 guidance and expects revenue to be at least $100 million with an Adjusted EBITDA of at least $11 million.

 

Conference Call

 

Date: Thursday, August 8, 2024

 

Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time)

 

Toll Free: 1-800-343-4849

 

International: 1-203-518-9848

 

Conference ID: “OPRXQ2”

 

Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1679004&tp_key=4b22d66114

 

Definition and Use of Non-GAAP Financial Measures

 

This earnings release includes a presentation of non-GAAP net loss and non-GAAP net loss per diluted share or non-GAAP EPS, and Adjusted EBITDA, all of which are non-GAAP financial measures.

 

The Company defines non-GAAP net loss as GAAP net loss with an adjustment, as applicable, to add back depreciation, amortization, amortization of debt issuance costs, stock-based compensation, acquisition expenses, severance expenses, income or loss related to the fair value of contingent consideration, gain or loss from the disposal of a business, asset impairment charges, other income (loss), and deferred income taxes. Non-GAAP EPS is defined as non-GAAP net loss divided by the number of weighted average shares outstanding on a diluted basis. Adjusted EBITDA is defined as GAAP net loss with an adjustment, as applicable, to add back depreciation, amortization, interest, stock-based compensation, acquisition expenses, severance expenses, income or loss related to the fair value of contingent consideration, gain or loss from the disposal of a business, asset impairment charges, other income (loss), and deferred income taxes. The Company has provided non-GAAP financial measures to aid investors in better understanding its performance. Management believes that these non-GAAP financial measures provide additional insight into the operations and cash flow of the Company.

 

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a Company’s non-cash operating expenses, management believes that providing non-GAAP financial measures that exclude non-cash expenses allows for meaningful comparisons between the Company’s business operating results and those of other companies, as well as provides an important tool for financial and operational decision making and for evaluating the Company’s business operating results over different periods of time.

 

The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate such non-GAAP financial results differently. The Company’s non-GAAP net loss, non-GAAP EPS and Adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. The Company does not consider these non-GAAP measures to be substitutes for or superior to the information provided by its GAAP financial results.

 

 

The table, “Reconciliation of Non-GAAP to GAAP Financial Measures,” included below, provides a reconciliation of Non-GAAP net (loss), Non-GAAP EPS and Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023. Although the Company provides guidance for Adjusted EBITDA, it is not able to provide guidance to the most directly comparable GAAP measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, acquisition expenses, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

 

Definition of Key Performance Indicators*

 

Top 20 pharmaceutical manufacturers: We have updated the definition of “top 20 pharmaceutical manufacturers” in our key performance indicators to be based upon Fierce Pharma’s most updated list of “The top 20 pharma companies by 2023 revenue”. We previously used “The top 20 pharma companies by 2022 revenue”. As a result of this change, prior periods have been restated for comparative purposes.

 

Net revenue retention: Net revenue retention is a comparison of revenue generated from all clients in the previous period to total revenue generated from the same clients in the following year (i.e., excludes new client relationships for the most recent year).

 

Revenue per average Full Time Employee: We define revenue per average full-time employee (FTE) as total revenue over the last 12 months (LTM) divided by the average number of employees over the LTM, which is calculated by taking our total number of FTEs at the end of the prior year period by our total FTE headcount at the end of the most recent.

 

About OptimizeRx

 

OptimizeRx provides best-in-class health technology that enables care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey. Connecting over 2 million U.S. healthcare providers and millions of their patients through an intelligent technology platform embedded within a proprietary digital point-of-care network, as well as mass digital communication channels, OptimizeRx helps life sciences organizations engage and support their customers.

 

For more information, follow the Company on Twitter, LinkedIn or visit www.optimizerx.com. 

 

Important Cautions Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “intends”, “plans”, “projects”, “targets”, “designed”, “could”, “may”, “should”, “will” or other similar words and expressions are intended to identify these forward-looking statements. All statements that reflect the Company’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to the Company’s growth, business plans, future performance. These forward-looking statements are based on the Company’s current expectations and assumptions regarding the Company’s business, the economy, and other future conditions. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise, except as required by applicable law. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, seasonal trends, our ability to maintain our contracts with electronic prescription platforms, competition, and other risks summarized in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its subsequent Quarterly Reports on Form 10-Q, and its other filings with the Securities and Exchange Commission.

 

OptimizeRx Contact

Andy D’Silva, SVP Corporate Finance

adsilva@optimizerx.com

 

Investor Relations Contact

Ashley Robinson

LifeSci Advisors, LLC

arr@lifesciadvisors.com

 

 

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands except share and per share data)

(UNAUDITED)

		June 30, 2024				December 31, 2023
ASSETS
Current assets
Cash and cash equivalents		$	14,959			$	13,852
Accounts receivable, net			24,521				36,253
Taxes receivable			1,842				1,036
Prepaid expenses and other			4,647				3,190
Total current assets			45,969				54,331
Property and equipment, net			171				149
Other assets
Goodwill			78,357				78,357
Other intangibles, net			14,470				15,198
Tradename and customer relationships, net			33,003				34,198
Operating lease right of use assets, net			472				573
Security deposits and other assets			435				568
Total other assets			126,736				128,894
TOTAL ASSETS		$	172,876			$	183,374
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt		$	3,300			$	2,000
Accounts payable – trade			2,980				2,227
Accrued expenses			5,310				7,706
Revenue share payable			2,094				5,506
Taxes payable			—				49
Current portion of lease liabilities			219				222
Deferred revenue			1,053				172
Total current liabilities			14,956				17,881
Non-current liabilities
Long-term debt, net			32,296				34,231
Lease liabilities, net of current portion			271				371
Deferred tax liabilities, net			4,337				4,337
Total liabilities			51,860				56,821
Stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2024 or December 31, 2023			—				—
Common stock, $0.001 par value, 166,666,667 shares authorized, 20,061,907 and 19,899,679 shares issued at June 30, 2024 and December 31, 2023, respectively			20				20
Treasury stock, $0.001 par value, 1,741,397 shares held at June 30, 2024 and December 31, 2023.			(2	)			(2	)
Additional paid-in-capital			196,164				190,793
Accumulated deficit			(75,166	)			(64,258	)
Total stockholders’ equity			121,016				126,553
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	172,876			$	183,374

 

 

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except share and per share data)

(UNAUDITED)

 

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2024				2023				2024				2023
Net revenue		$	18,812			$	13,818			$	38,502			$	26,821
Cost of revenues, exclusive of depreciation and amortization presented separately below			7,108				5,993				14,595				11,563
Gross profit			11,704				7,825				23,907				15,258
Operating expenses
General and administrative expenses			14,380				12,242				30,545				26,274
Depreciation and amortization			1,073				465				2,140				929
Total operating expenses			15,453				12,707				32,685				27,203
Loss from operations			(3,749	)			(4,882	)			(8,778	)			(11,945	)
Other income (expense)
Interest expense			(1,528	)			—				(3,074	)			—
Other income			75				—				75				—
Interest income			105				721				125				1,386
Total other income (expense), net			(1,347	)			721				(2,874	)			1,386
Loss before provision for income taxes			(5,097	)			(4,161	)			(11,652	)			(10,559	)
Expense (benefit) from  income taxes			1,088				33				744				66
Net loss		$	(4,008	)		$	(4,128	)		$	(10,908	)		$	(10,493	)
Weighted average number of shares outstanding – basic			18,257,879				16,992,100				18,213,992				17,043,493
Weighted average number of shares outstanding – diluted			18,257,879				16,992,100				18,213,922				17,043,493
Loss per share – basic		$	(0.22	)		$	(0.24	)		$	(0.60	)		$	(0.62	)
Loss per share – diluted		$	(0.22	)		$	(0.24	)		$	(0.60	)		$	(0.62	)

 

 

OPTIMIZERX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

 

		For the Six Months Ended June 30,
		2024				2023
OPERATING ACTIVITIES:
Net loss		$	(10,908	)		$	(10,493	)
Adjustments to reconcile net loss to net cash  provided by (used in) operating activities:
Depreciation and amortization			2,140				929
Stock-based compensation			5,926				7,884
Increase in bad debt reserve			132				239
Amortization of debt issuance costs			365				—
Changes in:
Accounts receivable			11,600				3,635
Prepaid expenses and other assets			(1,457	)			(1,772	)
Accounts payable			752				(732	)
Revenue share payable			(3,412	)			(1,269	)
Accrued expenses and other liabilities			(2,264	)			(1,097	)
Taxes payable			(855	)			—
Deferred revenue			881				287
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			2,900				(2,389	)
INVESTING ACTIVITIES:
Purchase of property and equipment			(77	)			(49	)
Purchases of held-to-maturity investments			—				(109,501	)
Redemptions of held-to-maturity investments			—				112,501
Acquisition of intangible assets, including intellectual property rights			—				(3	)
Capitalized software development costs			(162	)			(1,274	)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES			(239	)			1,674
FINANCING ACTIVITIES:
Cash paid for employee withholding taxes related to the vesting of restricted stock units			(555	)			(244	)
Proceeds from exercise of stock options			—				145
Repurchase of common stock			—				(7,522	)
Repayment of long-term debt			(1,000	)			—
NET CASH USED IN FINANCING ACTIVITIES			(1,555	)			(7,621	)
NET  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			1,106				(8,335	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			13,852				18,209
CASH AND CASH EQUIVALENTS - END OF PERIOD		$	14,958			$	9,874
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest		$	2,710			$	—
Cash paid for income taxes		$	110			$	—

 

 

OPTIMIZERX CORPORATION

RECONCILIATION of GAAP to NON-GAAP FINANCIAL MEASURES

(in thousands, except share and per share data)

(UNAUDITED)

 

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2024				2023				2024				2023
Net loss		$	(4,008	)		$	(4,128	)		$	(10,908	)		$	(10,493	)
Depreciation and amortization			1,073				465				2,140				929
Stock-based compensation			2,903				3,503				5,926				7,884
Severance expenses			241				—				660				—
Other Income			(75	)			—				(75	)			—
Amortization of debt issuance costs			182				—				365				—
Acquisition expenses			—				—				243				—
Non-GAAP net income (loss)		$	316			$	(160	)		$	(1,649	)		$	(1,681	)
Non-GAAP net income (loss) per share
Diluted		$	0.02			$	(0.01	)		$	(0.09	)		$	(0.10	)
Weighted average shares outstanding:
Diluted			18,358,543				16,992,100				18,213,922				17,043,793

 

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2024				2023				2024				2023
Net loss		$	(4,008	)		$	(4,128	)		$	(10,908	)		$	(10,493	)
Depreciation and amortization			1,073				465				2,140				929
Expense (benefit) from  income taxes			(1,088	)			33				(744	)			66
Stock-based compensation			2,903				3,503				5,926				7,884
Severance expenses			241				—				660				—
Acquisition expenses			—				—				243				—
Other Income			(75	)			—				(75	)			—
Interest (income) expense, net			1,422				(721	)			2,949				(1,386	)
Adjusted EBITDA		$	468			$	(848	)		$	191			$	(3,000	)

 

 

7

 

v3.24.2.u1

Cover	Aug. 08, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 08, 2024
Entity File Number	001-38543
Entity Registrant Name	OptimizeRx Corporation
Entity Central Index Key	0001448431
Entity Tax Identification Number	26-1265381
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	260 Charles Street
Entity Address, Address Line Two	Suite 302
Entity Address, City or Town	Waltham
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02453
City Area Code	248
Local Phone Number	651.6568
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 Par Value
Trading Symbol	OPRX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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