Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $13.7 million, an increase of 22% from $11.2 million in Q1 2021 [32] - Gross margin increased from 55% in Q1 2021 to 59% in Q1 2022, attributed to a favorable mix of solutions and network partners [33] - Net loss for Q1 2022 was $3.8 million, or $0.21 per share, compared to a net loss of $0.6 million in Q1 2021 [36] - Cash and cash equivalents totaled $89 million as of March 31, 2022, up from $84.7 million at the end of 2021 [37] Business Line Data and Key Metrics Changes - The company reported growth in sales from messaging and access solutions, contributing to the overall revenue increase [32] - Average revenue per top manufacturer grew by 20% year-over-year to $2.5 million in 2022 [38] - Net revenue retention rate was 124% for Q1 2022, indicating strong client engagement and satisfaction [39] Market Data and Key Metrics Changes - The digital health market is experiencing increased spending, with estimates rising from approximately $4 billion in 2019 to over $10 billion currently [19] - The company is expanding partnerships with 95% of the top 20 largest pharma manufacturers, indicating strong market presence [20] Company Strategy and Development Direction - The company aims to be a leading tech-enabled partner for the life science industry, focusing on scalable solutions and strategic M&A opportunities [12][44] - The acquisition of EvinceMed is expected to enhance the company's capabilities in specialty medications, improving margins and expanding the addressable market [22][24] - The company is committed to enhancing its platform capabilities, particularly in artificial intelligence and data-centric solutions [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite macroeconomic headwinds, including labor market challenges and inflation [14][19] - The company is well-positioned to capitalize on opportunities arising from the digital transformation in healthcare, particularly in the specialty drug market [9][42] - Management noted that pharma clients are increasingly focused on digital solutions, which aligns with the company's offerings [8][64] Other Important Information - The company released its first environmental, social, and governance report, aligning its mission with stakeholder capitalism metrics [30] - The company is focused on maintaining a strong balance sheet and generating positive operating cash flow, which positions it favorably for future growth [10][44] Q&A Session Summary Question: Sales conversion rate and pipeline in the context of reopening - Management indicated that traditional marketing methods are not disrupting digital strategies, and clients are increasing their digital spend [50][53] Question: Impact of market turmoil on private market multiples - Management acknowledged potential opportunities in the private market due to recent adjustments in valuations, but emphasized a selective approach to acquisitions [55][56] Question: Investment cadence for the year - Management confirmed a focus on strategic partnerships and investments that align with long-term contracts, without significant changes expected in operational expenses [58][68] Question: Contracted revenue guidance for 2022 - Management expressed confidence in the revenue guidance range of $80 million to $85 million, citing strong visibility into renewals [75][76] Question: G&A expenses and EBITDA outlook - Management indicated that G&A expenses would not grow faster than revenue, maintaining a focus on profitability [67][71] Question: Inflation impact on pricing power and costs - Management noted that inflation could enhance pharma's pricing power, potentially increasing the commercial budget available for the company [98][99]

PART I [Business](index=4&type=section&id=Item%201.%20Business) OptimizeRx is a digital health technology company connecting life sciences, healthcare providers, and patients to improve medication adherence [Overview](index=4&type=section&id=Item%201.%20Business_Overview) OptimizeRx operates a digital health platform integrated into point-of-care networks to enhance medication access and adherence for patients - The company's core business is a digital health platform that connects life sciences organizations, healthcare providers (HCPs), and patients at the point of care[20](index=20&type=chunk) - The platform reaches over **60% of U.S. HCPs** and is designed to help patients start and stay on their medications[20](index=20&type=chunk) - Operations are conducted through wholly-owned subsidiaries in the U.S. (Michigan, Delaware, New Jersey), Croatia, and Israel[21](index=21&type=chunk) [2021 Company Highlights](index=5&type=section&id=Item%201.%20Business_2021%20Company%20Highlights) In 2021, OptimizeRx achieved record net revenue of $61.3 million, returned to profitability, and expanded its platform capabilities 2021 Financial Highlights | Metric | 2021 Value | Change vs 2020 | | :--- | :--- | :--- | | Net Revenue | $61.3 million | +42% | | Q4 Net Revenue | $20.3 million | +24% | | Net Income | $0.4 million | From $2.2M Loss | | Cash Flow from Operations | $0.7 million | Positive | - Completed a public offering in February 2021, raising an additional **$70.7 million** in capital[24](index=24&type=chunk) - Launched a new Therapy Initiation Workflow to support specialty medications and an Evidence-Based Physician Engagement solution, which was recognized as an innovative product by PM 360 magazine[24](index=24&type=chunk) - The company was added to the S&P SmallCap 600 Index in October 2021[24](index=24&type=chunk) [Principal Solutions and Applications](index=5&type=section&id=Item%201.%20Business_Principal%20Solutions%20and%20Applications) The company's integrated platform offers solutions like financial messaging, patient engagement, and evidence-based physician engagement to support medication access - **Financial Messaging:** A virtual "Patient Support Center" within EMR/e-Prescribe systems for accessing co-pay coupons and vouchers[24](index=24&type=chunk) - **Patient Engagement:** Acquired capabilities from CareSpeak and RMDY Health provide interactive mobile messaging to improve medication adherence and care coordination[26](index=26&type=chunk) - **Evidence-Based Physician Engagement:** Uses AI and real-world data (RWD) to help HCPs identify qualified patients for specific therapies and monitor adherence[26](index=26&type=chunk) - **Therapy Initiation Workflow:** A digital solution to accelerate patient access to specialty medications by simplifying enrollment, benefits verification, and prior authorization[26](index=26&type=chunk) [Sales, Marketing, and Operations](index=6&type=section&id=Item%201.%20Business_Sales%2C%20Marketing%2C%20and%20Operations) The company shifted to enterprise sales, enhanced marketing, expanded its network, and migrated its core technology to AWS for improved scalability - Sales strategy is shifting from individual solutions to enterprise platform deals to increase revenue per customer and predictability[25](index=25&type=chunk) - Marketing strategy focused on strategic content resulted in a **10x increase** in engagement and higher brand visibility through organic channels[27](index=27&type=chunk) - Core technology platforms have been moved to Amazon Web Services (AWS) to support growth and improve efficiency[30](index=30&type=chunk) - The company is pursuing full Enterprise HITRUST Certification in 2022 to enhance security and compliance[31](index=31&type=chunk) [Competition, IP, and Employees](index=7&type=section&id=Item%201.%20Business_Competition%2C%20IP%2C%20and%20Employees) OptimizeRx competes in digital health, holds 3 patents, and employed 97 full-time staff as of December 31, 2021, with a focus on diversity - The primary direct competitor for the financial messaging solution is ConnectiveRx[34](index=34&type=chunk) - As of December 31, 2021, the company held **3 patents** and several pending applications, along with numerous trademarks like OPTIMIZERx, CareSpeak, and RMDY[35](index=35&type=chunk)[36](index=36&type=chunk) - As of December 31, 2021, the company had **82 full-time employees** in the U.S. and **15 full-time international employees** in Israel and Croatia[38](index=38&type=chunk) - In 2021, the company introduced a Diversity, Equity & Inclusion Committee and committed to the Parity Pledge, pledging to interview at least one qualified woman and underrepresented minority for every open role at the VP level or higher[39](index=39&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks including historical losses, customer concentration, regulatory compliance, cybersecurity threats, and stock price volatility [Risks Relating to Our Business](index=9&type=section&id=Item%201A.%20Risk%20Factors_Risks%20Relating%20to%20Our%20Business) Business risks include historical losses, high customer and partner concentration, and exposure to complex healthcare regulatory compliance - While profitable in 2021, the company has a history of incurring losses due to investments in growth and acquisitions[43](index=43&type=chunk) - Revenues are concentrated in fewer than **50 customers**. In 2021, **one customer** represented over **10% of revenues**, compared to three such customers in 2020[50](index=50&type=chunk) - The company is reliant on its contracts with electronic prescribing platforms. In 2021, **53.9% of revenue** was generated through its largest partner, up from 52.7% in 2020[53](index=53&type=chunk) - The company is subject to complex healthcare regulations, including HIPAA and federal/state anti-kickback laws, which could impose significant compliance costs and penalties for violations[57](index=57&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [Risks Related to IP, Technology, and Stock](index=15&type=section&id=Item%201A.%20Risk%20Factors_Risks%20Related%20to%20IP%2C%20Technology%2C%20and%20Stock) Risks include intellectual property protection, cybersecurity, system failures, stock price volatility, and anti-takeover provisions - The business depends on its ability to protect its intellectual property through patents and other measures; failure to do so could adversely affect its competitive position[74](index=74&type=chunk) - Cybersecurity incidents and IT system failures pose significant threats, potentially leading to data loss, business disruption, and reputational damage[76](index=76&type=chunk)[77](index=77&type=chunk) - The common stock (OPRX) has been thinly traded historically and its market price is likely to be highly volatile[79](index=79&type=chunk)[81](index=81&type=chunk) - The company has never paid dividends and does not expect to in the foreseeable future, meaning return on investment depends on stock price appreciation[82](index=82&type=chunk) [Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[87](index=87&type=chunk) [Properties](index=18&type=section&id=Item%202.%20Properties) The company leases its principal executive offices in Michigan and an office in Croatia, with no owned real estate - The company does not own any real estate and leases all its office spaces[87](index=87&type=chunk) - Key leases include the headquarters in Rochester, MI (expires Nov 2023, with renewal option) and an office in Zagreb, Croatia (expires 2024)[88](index=88&type=chunk) [Legal Proceedings](index=18&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no current legal proceedings - No current legal proceedings are reported[89](index=89&type=chunk) [Mine Safety Disclosures](index=18&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[90](index=90&type=chunk) [Information about Our Executive Officers](index=18&type=section&id=Item%204.1%20Information%20about%20Our%20Executive%20Officers) This section provides background and business experience for the company's executive officers as of February 24, 2022 Executive Officers as of Feb 24, 2022 | Name | Age | Position | | :--- | :--- | :--- | | William J. Febbo | 53 | Chief Executive Officer | | Stephen L. Silvestro | 44 | Chief Commercial Officer | | Marion Odence-Ford | 57 | General Counsel and Chief Compliance Officer | | Edward Stelmakh | 56 | Chief Financial Officer and Chief Operations Officer | | Todd Inman | 66 | Chief Technology Officer | PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=20&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "OPRX", with no anticipated cash dividends in the foreseeable future - Common stock is traded on the Nasdaq Capital Market under the symbol "OPRX"[100](index=100&type=chunk) - The company has never declared or paid cash dividends and does not plan to in the foreseeable future[101](index=101&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details the company's 2021 financial performance, including 42% revenue growth, profitability, and liquidity, alongside strategic shifts [Overview and COVID-19 Update](index=21&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis_Overview%20and%20COVID-19%20Update) The company focuses on enterprise engagements and AI solutions, with COVID-19 increasing demand for digital health without adverse financial impact - Strategic focus is on shifting to enterprise-level engagements with recurring revenue streams to generate greater and more consistent revenues[105](index=105&type=chunk) - The COVID-19 pandemic increased demand for digital health solutions and did not negatively impact financial results in 2021[107](index=107&type=chunk)[110](index=110&type=chunk) [Key Performance Indicators](index=22&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis_Key%20Performance%20Indicators) Key performance indicators for 2021 show increased average revenue per top 20 pharma manufacturer and improved revenue per employee Key Performance Indicators (2021 vs. 2020) | KPI | 2021 | 2020 | | :--- | :--- | :--- | | Average revenue per top 20 pharma manufacturer | $2,484,557 | $1,945,650 | | Percent of top 20 pharma manufacturers as customers | 95% | 85% | | Percent of total revenue from top 20 pharma manufacturers | 77% | 76% | | Net revenue retention | 127% | 162% | | Revenue per average full-time employee | $729,674 | $614,378 | [Results of Operations (2021 vs. 2020)](index=24&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis_Results%20of%20Operations) In 2021, net revenue grew 42% to $61.3 million, gross margin improved to 58%, and the company achieved a net income of $0.4 million Annual Financial Performance | Metric | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $61.3M | $43.3M | +42% | | Gross Margin | $35.6M | $24.1M | +48% | | Gross Margin % | 58% | 56% | +2 p.p. | | Operating Expenses | $35.3M | $26.2M | +34% | | Net Income (Loss) | $0.4M | ($2.2M) | N/A | Operating Expense Breakdown (in millions) | Expense Category | 2021 | 2020 | | :--- | :--- | :--- | | Compensation Expense | $17.9 | $13.7 | | Stock-based Compensation | $5.5 | $3.2 | | Depreciation and Amortization | $2.1 | $2.1 | | Data | $1.0 | $0.2 | | Other Expenses | $8.8 | $7.0 | | **Total Operating Expense** | **$35.3** | **$26.2** | - The increase in operating expenses was primarily driven by higher compensation from adding **27 net new employees** and increased stock-based compensation due to a higher stock price and executive hiring[127](index=127&type=chunk)[129](index=129&type=chunk) [Quarterly Financial Information](index=27&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis_Quarterly%20Financial%20Information) Quarterly results for 2021 show consistent sequential revenue growth, culminating in a strong Q4 with over $20.3 million in revenue 2021 Quarterly Results (in thousands) | Quarter | Revenues | Gross Profit | Net Income (Loss) | Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | Q1 | $11,229 | $6,125 | $(637) | $(0.04) | | Q2 | $13,626 | $8,045 | $352 | $0.02 | | Q3 | $16,125 | $9,077 | $40 | $0.00 | | Q4 | $20,313 | $12,392 | $623 | $0.03 | 2020 Quarterly Results (in thousands) | Quarter | Revenues | Gross Profit | Net Income (Loss) | Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | Q1 | $7,585 | $4,343 | $(2,204) | $(0.15) | | Q2 | $8,783 | $5,144 | $(1,077) | $(0.07) | | Q3 | $10,519 | $6,014 | $(283) | $(0.02) | | Q4 | $16,426 | $8,604 | $1,357 | $0.08 | [Liquidity and Capital Resources](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis_Liquidity%20and%20Capital%20Resources) As of December 31, 2021, the company had strong liquidity with $105.7 million in working capital, primarily from a $70.7 million stock offering Cash Flow Summary (in millions) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash from operating activities | $0.7 | $(6.3) | | Net cash used in investing activities | $(0.5) | $(0.1) | | Net cash from financing activities | $73.9 | $(1.9) | | **Net increase (decrease) in cash** | **$74.2** | **$(8.3)** | - Working capital increased to **$105.7 million** at year-end 2021 from $22.9 million at year-end 2020[143](index=143&type=chunk) - Financing activities in 2021 were driven by a **$70.7 million** net proceed from an underwritten stock offering and **$4.9 million** from option exercises, partially offset by a **$1.6 million** payment for contingent consideration from prior acquisitions[147](index=147&type=chunk) [Critical Accounting Policies](index=29&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis_Critical%20Accounting%20Policies) Critical accounting policies involve significant judgment in revenue recognition, cost of revenues, stock-based compensation, and intangible asset impairment - **Revenue Recognition:** Revenue is recognized over time as messages are delivered. Contracts are generally less than one year. Setup fees are recognized over the life of the initial program[152](index=152&type=chunk)[156](index=156&type=chunk) - **Cost of Revenues:** Primarily consists of revenue share paid to network partners, which is expensed at the time a message is distributed[159](index=159&type=chunk) - **Intangible Assets & Goodwill:** Intangibles are amortized on a straight-line basis. Goodwill and intangibles are evaluated for impairment when a triggering event occurs, and goodwill is tested annually. No impairment was recorded in 2020 or 2021[160](index=160&type=chunk)[162](index=162&type=chunk) - **Stock-based Compensation:** Fair value is estimated at the grant date. The Black-Scholes model is used for options, and for market-based restricted stock units (RSUs), a Monte Carlo simulation is used[163](index=163&type=chunk)[166](index=166&type=chunk) [Financial Statements and Supplementary Data](index=32&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2021 and 2020, including the independent auditor's unqualified opinion [Report of Independent Registered Public Accounting Firm](index=33&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data_Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) UHY LLP issued an unqualified opinion on the financial statements and internal controls, identifying revenue recognition as a critical audit matter - The auditor, UHY LLP, provided an unqualified (clean) opinion on the financial statements and the effectiveness of internal controls over financial reporting[174](index=174&type=chunk) - Revenue recognition was identified as a Critical Audit Matter, involving complex judgments regarding performance obligations and timing[182](index=182&type=chunk)[183](index=183&type=chunk) [Consolidated Financial Statements](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data_Consolidated%20Financial%20Statements) Consolidated financial statements show total assets increased to $141.0 million in 2021, with cash rising to $84.7 million and a shift to $0.4 million net income Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $84,682 | $10,517 | | Accounts receivable, net | $24,801 | $17,886 | | Total Current Assets | $115,113 | $32,859 | | Goodwill & Intangibles | $25,387 | $26,861 | | **Total Assets** | **$140,985** | **$60,328** | | **Liabilities & Equity** | | | | Total Current Liabilities | $9,369 | $10,028 | | Total Liabilities | $9,605 | $10,354 | | Total Stockholders' Equity | $131,380 | $49,974 | | **Total Liabilities & Equity** | **$140,985** | **$60,328** | Consolidated Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | Revenue | $61,293 | $43,313 | | Gross margin | $35,638 | $24,105 | | Total operating expenses | $35,277 | $26,241 | | Income (loss) from operations | $361 | $(2,135) | | **Net income (loss)** | **$378** | **$(2,207)** | | **Diluted EPS** | **$0.02** | **$(0.15)** | [Controls and Procedures](index=59&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that both disclosure controls and procedures, and internal control over financial reporting, were effective as of December 31, 2021[320](index=320&type=chunk)[323](index=323&type=chunk) - The company's independent registered public accounting firm, UHY LLP, audited and issued an unqualified opinion on the effectiveness of the internal control over financial reporting[324](index=324&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=61&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 proxy statement - Most information for this section is incorporated by reference from the 2022 Annual Meeting proxy statement[330](index=330&type=chunk) [Executive Compensation](index=61&type=section&id=Item%2011.%20Executive%20Compensation) Information on director and executive compensation is incorporated by reference from the 2022 proxy statement - All information for this section is incorporated by reference from the 2022 Annual Meeting proxy statement[331](index=331&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=62&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) This section details equity compensation plans as of December 31, 2021, with over 1.18 million securities outstanding and 2.13 million available Equity Compensation Plan Information as of December 31, 2021 | Plan Category | Securities to be Issued (Options & RSUs) | Securities Available for Future Issuance | | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 1,183,750 | 2,132,791 | | Equity compensation plans not approved by security holders | - | - | | **Total** | **1,183,750** | **2,132,791** | [Certain Relationships and Related Transactions, and Director Independence](index=63&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2022 proxy statement - All information for this section is incorporated by reference from the 2022 Annual Meeting proxy statement[334](index=334&type=chunk) [Principal Accountant Fees and Services](index=63&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and pre-approval policies is incorporated by reference from the 2022 proxy statement - All information for this section is incorporated by reference from the 2022 Annual Meeting proxy statement[334](index=334&type=chunk) PART IV [Exhibits and Financial Statements Schedules](index=64&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statements%20Schedules) This section lists financial statements and exhibits filed with the Form 10-K, including an index of all filed exhibits - This section provides an index of all financial statements and exhibits filed with the Form 10-K[336](index=336&type=chunk)[337](index=337&type=chunk) [Form 10-K Summary](index=65&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary - None[340](index=340&type=chunk)

OptimizeRx Corporation. (NASDAQ:OPRX) Q4 2021 Earnings Conference Call February 24, 2022 4:30 PM ET Company Participants William Febbo - Chief Executive Officer Ed Stelmakh - Chief Financial Officer Stephen Silvestro - Chief Commercial Officer Andrew D’Silva - Senior Vice President of Corporate Finance Conference Call Participants Ryan Daniels - William Blair Sean Dodge - RBC Capital Markets Marc Wiesenberger - B. Riley Securities Eric Martinuzzi - Lake Street Harvey Poppel - Poptech Capital LLP Operator Go ...

OptimizeRx Corporation (NASDAQ:OPRX) Q3 2021 Earnings Conference Call November 9, 2021 4:30 PM ET Company Participants William Febbo – Chief Executive Officer Ed Stelmakh – Chief Financial Officer Stephen Silvestro – Chief Commercial Officer Andrew D’Silva – Senior Vice President of Corporate Finance Conference Call Participants Jared Haase – William Blair Sean Dodge – RBC Capital Markets Eric Martinuzzi – Lake Street Marc Wiesenberger – B. Riley Securities Operator Good afternoon, and thank you for joining ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Commission File Number: 001-38543 OptimizeRx Corporation (Exact name of registrant as specified in its charter) Nevada 26-1265381 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 or ☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ to __________ (State or other jurisd ...

OptimizeRx Corporation (NASDAQ:OPRX) Q2 2021 Results Conference Call August 4, 2021 4:30 PM ET Company Participants William Febbo - Chief Executive Officer Doug Baker - Chief Financial Officer Stephen Silvestro - Chief Commercial Officer Conference Call Participants Ryan Daniels - William Blair Sean Dodge - RBC Capital Markets Andrew D'Silva - B. Riley Securities Eric Martinuzzi - Lake Street Capital Harvey Poppel - Poptech, LP Operator Good afternoon and thank you for joining OptimizeRx Corporation's Secon ...

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's analysis for OptimizeRx Corporation [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents OptimizeRx Corporation's unaudited condensed consolidated financial statements, including balance sheets, operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show significant increases in total assets and stockholders' equity, driven by a public offering, improving working capital Condensed Consolidated Balance Sheets | Metric | June 30, 2021 | December 31, 2020 | | :-------------------------- | :---------------- | :------------------ | | Cash and cash equivalents | $83,923,455 | $10,516,776 | | Total Current Assets | $104,981,860 | $32,859,092 | | Total Assets | $131,623,380 | $60,327,754 | | Total Current Liabilities | $6,665,304 | $10,028,307 | | Total Liabilities | $6,948,238 | $10,353,840 | | Total Stockholders' Equity | $124,675,142 | $49,973,914 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported net income for Q2 2021 and a reduced net loss for H1 2021, driven by strong revenue growth Condensed Consolidated Statements of Operations | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Revenue | $13,625,639 | $8,783,230 | $24,854,850 | $16,367,832 | | Gross Margin | $8,044,675 | $5,144,214 | $14,169,283 | $9,487,053 | | Income (Loss) From Operations | $340,139 | $(1,055,813) | $(298,169) | $(3,315,065) | | Net Income (Loss) | $352,100 | $(1,077,468) | $(285,277) | $(3,281,399) | | Basic EPS | $0.02 | $(0.07) | $(0.02) | $(0.22) | | Diluted EPS | $0.02 | $(0.07) | $(0.02) | $(0.22) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (2021)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202021) Stockholders' equity significantly increased for the three and six months ended June 30, 2021, primarily due to a public offering Condensed Consolidated Statements of Changes in Stockholders' Equity (2021) | Metric | Balance January 1, 2021 | Public Offering (net) | Shares Issued (Board Comp) | Shares Issued (Options) | Stock-based Comp Expense | Net Income (Loss) | Balance June 30, 2021 | | :-------------------------- | :---------------------- | :-------------------- | :------------------------- | :---------------------- | :----------------------- | :---------------- | :-------------------- | | Common Stock Shares | 15,223,340 | 1,523,750 | 4,730 | 743,609 | - | - | 17,495,429 | | Common Stock Amount | $15,223 | $1,524 | $5 | $743 | - | - | $17,495 | | Additional Paid-in Capital | $85,590,428 | $70,670,012 | $250,080 | $2,710,535 | $1,354,106 | - | $160,574,661 | | Accumulated Deficit | $(35,631,737) | - | - | - | - | $(285,277) | $(35,917,014) | | Total Stockholders' Equity | $49,973,914 | $70,671,536 | $250,085 | $2,711,278 | $1,354,106 | $(285,277) | $124,675,142 | [Condensed Consolidated Statements of Changes in Stockholders' Equity (2020)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202020) Stockholders' equity for H1 2020 increased from compensation and options, but decreased due to net losses Condensed Consolidated Statements of Changes in Stockholders' Equity (2020) | Metric | Balance January 1, 2020 | Shares Issued (Board Comp) | Shares Issued (Options) | Stock-based Comp Expense | Net Loss | Balance June 30, 2020 | | :-------------------------- | :---------------------- | :------------------------- | :---------------------- | :----------------------- | :---------------- | :-------------------- | | Common Stock Shares | 14,600,579 | 18,884 | 90,763 | 42,374 | - | 14,752,600 | | Common Stock Amount | $14,601 | $19 | $91 | $42 | - | $14,753 | | Additional Paid-in Capital | $78,272,268 | $200,008 | $286,892 | $1,435,114 | - | $80,194,282 | | Accumulated Deficit | $(33,424,610) | - | - | - | $(3,281,399) | $(36,706,009) | | Total Stockholders' Equity | $44,862,259 | $200,027 | $286,983 | $1,435,156 | $(3,281,399) | $43,503,026 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated significant cash from financing and positive operating cash flow for H1 2021, substantially increasing cash Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net Cash Provided By (Used In) Operating Activities | $1,855,654 | $(3,611,183) | | Net Cash Used In Investing Activities | $(220,476) | $(24,998) | | Net Cash Provided By (Used In) Financing Activities | $71,771,501 | $(1,102,205) | | Net Increase In Cash And Cash Equivalents | $73,406,679 | $(4,738,386) | | Cash And Cash Equivalents - End Of Period | $83,923,455 | $14,114,294 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed context for the financial statements, covering business, accounting policies, revenue, leases, equity, and compensation [NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION](index=9&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) OptimizeRx is a digital health company connecting over half of U.S. healthcare providers; interim results are unaudited - OptimizeRx is a digital health company connecting **over half of U.S. healthcare providers** and **millions of patients** to help afford and stay on medications[25](index=25&type=chunk) [NOTE 2 – NEW ACCOUNTING STANDARDS](index=9&type=section&id=NOTE%202%20%E2%80%93%20NEW%20ACCOUNTING%20STANDARDS) Adoption of ASU No. 2019-12 (Income Taxes) on January 1, 2021, had no material financial impact - Adoption of ASU No. 2019-12 (Income Taxes) on January 1, 2021, had **no material effect** on financial statements[29](index=29&type=chunk) [NOTE 3 – REVENUES](index=9&type=section&id=NOTE%203%20%E2%80%93%20REVENUES) Most revenue comes from life science companies, recognized under ASC 606, with unbilled amounts in accounts receivable Revenue by Source | Revenue Source | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :--------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Life Science Companies | $13,313,044 | $8,336,298 | $24,256,404 | $15,568,032 | | Other | $312,595 | $446,932 | $598,446 | $799,800 | | Total Revenue | $13,625,639 | $8,783,230 | $24,854,850 | $16,367,832 | - Unbilled amounts included in accounts receivable were **$1,215,703** at June 30, 2021, up from **$77,516** at December 31, 2020[30](index=30&type=chunk) [NOTE 4 – LEASES](index=10&type=section&id=NOTE%204%20%E2%80%93%20LEASES) The company holds operating leases for office spaces; lease costs decreased for H1 2021 due to lower short-term leases Lease Costs | Lease Cost Component | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :----------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating lease cost | $33,365 | $32,814 | $66,730 | $65,627 | | Short-term lease cost | $16,890 | $36,186 | $32,814 | $80,815 | | Total lease cost | $50,255 | $69,000 | $99,544 | $146,442 | - Weighted average remaining lease term at June 30, 2021, was **3.93 years**, with a weighted average discount rate of **4.5%**[40](index=40&type=chunk) [NOTE 5 – STOCKHOLDERS' EQUITY](index=12&type=section&id=NOTE%205%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) OptimizeRx significantly increased common stock and additional paid-in capital in H1 2021 through a public offering - Issued 1,523,750 shares of common stock in a public offering, generating net proceeds of **$70,671,536** in Q1 2021[41](index=41&type=chunk) - Issued 743,609 shares from stock option exercises in the first half of 2021, generating **$2,710,778** in proceeds[42](index=42&type=chunk) - Issued 4,730 shares for board compensation in the first half of 2021, valued at **$250,085**[44](index=44&type=chunk) [NOTE 6 – STOCK BASED COMPENSATION](index=12&type=section&id=NOTE%206%20%E2%80%93%20STOCK%20BASED%20COMPENSATION) The company recognized **$1.35 million** in stock-based compensation expense for H1 2021, with significant remaining expense Stock-Based Compensation Expense | Compensation Type | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :------------------------ | :--------------------------- | :--------------------------- | | Stock Options Expense | $954,434 | $1,021,787 | | Restricted Stock Awards Expense | $399,672 | $413,369 | | Total Stock-Based Compensation | $1,354,106 | $1,435,156 | - Remaining expense for unvested options is **$6,183,249** over approximately **2.5 years**[45](index=45&type=chunk) - Remaining expense for unvested restricted stock awards is **$2,588,851** over **3.4 years**[47](index=47&type=chunk) [NOTE 7 – EARNINGS (LOSS) PER SHARE](index=13&type=section&id=NOTE%207%20%E2%80%93%20EARNINGS%20%28LOSS%29%20PER%20SHARE) Basic and diluted EPS for Q2 2021 were **$0.02**, a positive shift, and H1 2021 showed a reduced loss Earnings (Loss) Per Share | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income (Loss) | $352,100 | $(1,077,468) | $(285,277) | $(3,281,399) | | Basic EPS | $0.02 | $(0.07) | $(0.02) | $(0.22) | | Diluted EPS | $0.02 | $(0.07) | $(0.02) | $(0.22) | - Diluted EPS was **not calculated** for 2020 periods or the six months ended June 30, 2021, due to anti-dilutive effects[51](index=51&type=chunk) [NOTE 8 – CONTINGENCIES](index=14&type=section&id=NOTE%208%20%E2%80%93%20CONTINGENCIES) OptimizeRx Corporation is not currently involved in any material legal proceedings - The Company is **not currently involved in any material legal proceedings**[54](index=54&type=chunk) [NOTE 9 – SUBSEQUENT EVENTS](index=14&type=section&id=NOTE%209%20%E2%80%93%20SUBSEQUENT%20EVENTS) In July 2021, the company issued **123,178** shares for **$300,548** from stock option exercises - In July 2021, **123,178 shares** of common stock were issued from stock option exercises, generating **$300,548**[55](index=55&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operational results for H1 2021, covering revenue, costs, and liquidity [Forward-Looking Statements](index=15&type=section&id=Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks and uncertainties - Forward-looking statements are subject to **risks and uncertainties** that may cause actual results to **differ materially**[57](index=57&type=chunk) [Overview](index=15&type=section&id=Overview) The company has not seen a noticeable COVID-19 revenue impact but anticipates potential future negative effects - **No noticeable impact** on revenue from COVID-19 observed in the recently completed fiscal year or quarter[58](index=58&type=chunk) - Enacted precautionary measures in **March 2020**, including remote work and travel elimination; offices reopened voluntarily in **June 2021**[59](index=59&type=chunk) - Digital communication technology is considered **more important** in the current environment, but advertising/marketing budgets may be **cut** in a sustained economic downturn[59](index=59&type=chunk) [Company Highlights through July 2021](index=16&type=section&id=Company%20Highlights%20through%20July%202021) OptimizeRx achieved significant revenue growth, positive operating cash flow, launched RWE, and raised capital - Generated sales of **$13.6 million** for **Q2 2021** (**+55% YoY**) and **$24.9 million** for **H1 2021** (**+52% YoY**)[65](index=65&type=chunk) - Achieved **positive cash flow from operations** of **$1.9 million** for **H1 2021**[65](index=65&type=chunk) - Launched new Real World Evidence (RWE) messaging solution, generating Q2 revenue from two leading brands[65](index=65&type=chunk) - Raised **$70.7 million** of capital in a public offering[65](index=65&type=chunk) - Enhanced leadership team (General Counsel, Chief Compliance Officer, elevated CTO)[65](index=65&type=chunk) - Completed integration work for previous two acquisitions and paid last earnout payment[65](index=65&type=chunk) [Results of Operations for the Three and Six Months Ended June 30, 2021 and 2020](index=16&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202021%20and%202020) This section analyzes the company's operational performance for the three and six months ended June 30, 2021 and 2020 [Revenues](index=16&type=section&id=Revenues) Total revenue increased significantly for both the three and six months ended June 30, 2021, driven by increased sales across all messaging products Net Revenue Performance | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | YoY Change | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | YoY Change | | :---------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Net Revenue | $13,625,639 | $8,783,230 | +55% | $24,854,850 | $16,367,832 | +52% | [Cost of Revenues](index=16&type=section&id=Cost%20of%20Revenues) Cost of revenue percentage slightly decreased for Q2 2021 but increased for H1 2021 due to solution mix Cost of Revenues Percentage | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :---------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cost of Revenues % | 41.0% | 41.4% | 43.0% | 42.0% | [Gross Margin](index=17&type=section&id=Gross%20Margin) Gross margin slightly increased in Q2 2021 due to RWE but decreased for H1 2021, with expected improvement Gross Margin Percentage | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :----------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gross Margin % | 59.0% | 58.6% | 57.0% | 58.0% | - Q2 2021 gross margin improvement was partly due to the launch of the RWE solution, which has a **higher margin** from program design[66](index=66&type=chunk) [Operating Expenses](index=17&type=section&id=Operating%20Expenses) Operating expenses increased for H1 2021 due to growth investments, but at a lower rate than revenues Operating Expenses by Category | Operating Expense Category | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Operating Expense | $7,704,536 | $6,200,027 | $14,467,452 | $12,802,118 | | Salaries, Wages, & Benefits | $3,906,796 | $3,176,460 | $7,487,612 | $6,382,597 | | Stock-Based Compensation | $897,038 | $780,670 | $1,604,191 | $1,635,183 | | Professional Fees | $448,598 | $186,834 | $769,818 | $672,304 | | Data Costs | $257,484 | $72,942 | $545,396 | $124,554 | | Travel | $48,925 | $13,111 | $58,755 | $287,622 | - Professional fees increased significantly in Q2 2021 due to a comprehensive governance review (**$300,000 expense**)[70](index=70&type=chunk) - Data costs **increased** due to purchasing more data for selling efforts and targeted messaging[72](index=72&type=chunk) - Travel expense is expected to increase **significantly** in Q3 due to relaxed restrictions and pent-up demand[69](index=69&type=chunk) [Net Income (Loss)](index=18&type=section&id=Net%20Income%20%28Loss%29) OptimizeRx reported **$0.4 million** net income for Q2 2021, a significant improvement, and a reduced net loss for H1 2021 Net Income (Loss) Performance | Metric | 3 Months Ended June 30, 2021 | 3 Months Ended June 30, 2020 | 6 Months Ended June 30, 2021 | 6 Months Ended June 30, 2020 | | :-------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income (Loss) | $352,100 | $(1,077,468) | $(285,277) | $(3,281,399) | [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) OptimizeRx demonstrated strong liquidity as of June 30, 2021, with **$98.3 million** working capital and a **15.7:1** current ratio Liquidity Metrics | Metric | June 30, 2021 | December 31, 2020 | | :------------------ | :---------------- | :------------------ | | Total Current Assets | $105.0 million | $32.9 million | | Total Current Liabilities | $6.7 million | $10.0 million | | Working Capital | $98.3 million | $22.9 million | | Current Ratio | 15.7:1 | 3:1 | - Operating activities provided **$1.9 million** in cash flow for the six months ended June 30, 2021, compared to **$3.6 million** cash used in the prior year[79](index=79&type=chunk) - Financing activities provided **$71.8 million** in cash for the six months ended June 30, 2021, primarily from a **$70.7 million** public offering and **$2.7 million** from stock option exercises[81](index=81&type=chunk) - **No remaining earnout payments** are due from previous acquisitions[81](index=81&type=chunk) - The company does **not anticipate needing to raise additional capital** for operating or growth purposes but may do so for strategic opportunities like acquisitions[82](index=82&type=chunk) [Critical Accounting Policies](index=19&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant management judgment and estimates, including revenue recognition and stock-based compensation - Critical accounting policies include **revenue recognition**, **revenue share expense**, **stock-based compensation**, **intangible asset capitalization and amortization**, **asset impairment**, and **fair value of liabilities**[83](index=83&type=chunk) [Recently Issued Accounting Pronouncements](index=19&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) The company adopted ASU No. 2019-12 (Income Taxes) on January 1, 2021, with no material impact - Adoption of ASU No. 2019-12 (Income Taxes) on January 1, 2021, had **no material effect** on financial position, results of operations, or cash flows[84](index=84&type=chunk) [Off Balance Sheet Arrangements](index=19&type=section&id=Off%20Balance%20Sheet%20Arrangements) As of June 30, 2021, OptimizeRx Corporation had no off-balance sheet arrangements - **No off-balance sheet arrangements** as of June 30, 2021[85](index=85&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is not required to provide disclosures about market risk for this reporting period - The company is **not required** to provide market risk disclosures[86](index=86&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective as of June 30, 2021, with routine improvements [Disclosure Controls and Procedures](index=20&type=section&id=Disclosure%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls were effective as of June 30, 2021 - Disclosure controls and procedures were **effective** as of June 30, 2021[88](index=88&type=chunk) [Changes in Internal Control over Financial Reporting](index=20&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Routine improvements were made to internal controls and a finance team member hired in Q2 2021 - **Routine improvements** made to internal controls and an **additional finance team member hired** in Q2 2021; **no material changes**[89](index=89&type=chunk) [Limitations on the Effectiveness of Controls](index=20&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Controls) Control systems provide only reasonable assurance against error and fraud - Control systems provide only **reasonable assurance** and cannot prevent all error and fraud due to **inherent limitations** and **resource constraints**[90](index=90&type=chunk) PART II – OTHER INFORMATION This section covers other required disclosures, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material pending legal proceedings - The company is **not a party to any material pending legal proceedings**[92](index=92&type=chunk) [Item 1A: Risk Factors](index=21&type=section&id=Item%201A%3A%20Risk%20Factors) For a discussion of risk factors, the company refers to its Annual Report on Form 10-K for 2020 - Refer to the **Annual Report on Form 10-K for 2020** for risk factors[93](index=93&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=21&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2021, the company issued restricted common stock to directors and shares from stock option exercises - Issued **2,035 shares** of restricted common stock to independent directors in Q2 2021[94](index=94&type=chunk) - Issued **232,806 shares** from stock option exercises in Q2 2021[95](index=95&type=chunk) - Issued **123,178 shares** from stock option exercises in July 2021[96](index=96&type=chunk) - Securities issued under **Section 4(2)** of the Securities Act and/or **Rule 506**[96](index=96&type=chunk) [Item 3. Defaults Upon Senior Securities](index=22&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **No defaults upon senior securities**[98](index=98&type=chunk) [Item 4. Mine Safety Disclosure](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - **Not applicable**[98](index=98&type=chunk) [Item 5. Other Information](index=22&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - **No other information to report**[98](index=98&type=chunk) [Item 6. Exhibits](index=22&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications and XBRL documents - Includes **certifications from CEO and CFO (31.1, 31.2, 32.1)** and **Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)**[98](index=98&type=chunk) SIGNATURES The report is signed by William J. Febbo (CEO) and Douglas P. Baker (CFO) on August 4, 2021 - Report signed by **William J. Febbo (CEO)** and **Douglas P. Baker (CFO)** on **August 4, 2021**[101](index=101&type=chunk)

NASDAQ:OPRX A Digital Health Platform Corporate Presentation May 2021 Physician Communications Patient Engagement Adherence © Copyright OptimizeRx, Inc. 2021 & 2020. All rights reserved NASDAQ : OPRX Important Cautions Regarding Forward Looking Statements This presentation has been prepared by OptimizeRx Corporation ("w e," "us," "our," "OptimizeRx" or the "Company") and is made for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities, nor shal ...

Financial Data and Key Metrics Changes - The company reported a revenue of $11.2 million for Q1 2021, representing a 48% increase compared to $7.6 million in Q1 2020 [31] - Gross margin decreased from 57% in Q1 2020 to 55% in Q1 2021, attributed to a change in solution mix [32] - Operating expenses increased slightly by 2.5% from $6.6 million in Q1 2020 to $6.8 million in Q1 2021, indicating strong operating leverage [34] - The net loss for Q1 2021 was $600,000 or $0.04 per share, an improvement from a net loss of $2.2 million or $0.15 per share in Q1 2020 [35] Business Line Data and Key Metrics Changes - The company closed 33 deals from a pipeline of 46 announced in the previous quarter, with client renewals totaling $25 million in annual contract value [13] - The average value of recently won contracts was close to $1 million, approximately three times higher than previous years [15] - The renewal rate exceeded 86%, driven by strong third-party ROI from previous programs [15] Market Data and Key Metrics Changes - The company expanded its omnichannel platform reach to over 50% of oncologists in the U.S., capitalizing on the fast-growing oncology segment projected to grow over 12% in 2021 [23] - The demand for real-world evidence solutions has increased significantly since the announcement in Q4 2020, indicating a transformative impact on therapeutic support delivery [26] Company Strategy and Development Direction - The company is focused on enhancing its digital health platform and expanding its core capabilities to support future revenue streams [8] - A land and expand strategy is being employed to penetrate more clients and increase engagement with existing solutions [14] - The management team is committed to diversity, equity, and inclusion, establishing an internal committee to foster a welcoming corporate culture [40] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the strong start to 2021, anticipating continued growth throughout the year [21] - The company is well-positioned to capture additional recurring revenue as COVID vaccinations increase demand for healthcare services [19] - The digital transformation in the industry is expected to drive ongoing growth, with a focus on improving physician-patient engagement [20] Other Important Information - The company raised $71 million through a public offering in February, strengthening its balance sheet for strategic goals and potential M&A activities [17] - Cash and cash equivalents totaled $83 million at the end of Q1 2021, a significant increase from $10.5 million at the end of 2020 [37] Q&A Session Summary Question: Insights on the $15 million remaining in the enterprise pipeline - Management expressed confidence in closing the remaining $15 million in deals, with most expected to contribute to 2021 revenue [49] Question: Evolution of the business post-Q1 with increased vaccinations - Management noted that life science companies are still primarily virtual and not yet engaging in live interactions, indicating a shift in marketing strategies [54][56] Question: Other specialties for growth beyond oncology - The company is also focusing on cardiology and other therapeutic areas, leveraging digital enablement trends [58] Question: Transition of EHRs to cloud-based platforms - Management confirmed a continued push towards cloud-based platforms, enhancing connectivity and partnerships beyond traditional EHRs [68] Question: Progress on non-enterprise business and win rates - The company reported win rates between 35% and 50% for non-enterprise deals, with encouraging conversion rates overall [76] Question: Expanded recurring revenue stream characterization - Management indicated that enterprise recurring revenue is expected to grow from $20 million last year to $40 million this year, reflecting strong client engagement [89] Question: Future operating expenses and investment areas - Operating expenses are expected to increase at a lower rate than revenue growth, with investments focused on client satisfaction and technology [98]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2021 ☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission File Number: 001-38543 OptimizeRx Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...