OptimizeRx Corp

Previous wording

Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those expressed in or implied by such forward-looking statements due to a variety of factors, including: our history of losses, seasonal trends in the pharmaceutical brand marketing industry; the inability to support our technology and scale our operations successfully, developing and implementing new and updated applications, features and services for our solutions may be more difficult and expensive and take longer than expected; the inability to offer high-quality customer support for our solutions; dependence on a concentrated group of customers; inability to maintain contracts with electronic prescription platforms and electronic health record systems, agreements with electronic prescription platforms and electronic health record systems being subject to audit; inability to attract and retain customers; inability to comply with laws and regulations that affect the healthcare industry; competition; developments in the healthcare industry; inability to manage growth; inability to identify suitable acquisition targets, complete acquisitions, or integrate acquisitions successfully; acquisition activities may disrupt ongoing business and may involve increased expenses; inability to realize the financial and strategic goals contemplated at the time of a transaction; inability to realize any synergies or other anticipated benefits of an acquisition or that such synergies or benefits may take longer than anticipated to be realized; risk that the integration with an acquired entity may be more costly or difficult than expected; impairment charges for goodwill or other long-lived assets may need to be recognized or increased if we lose a major customer, experience a decline in our common stock price, or experience changes to the regulatory environment affecting pharmaceutical advertising restricting the use of our technology; inability to comply with the restrictions in our credit agreement; inability to generate sufficient cash to service debt and fund other obligations; inability to raise capital to grow business on favorable terms or at all; inability to attract and retain senior management and other key employees; economic, political, regulatory and other risks arising from our international operations; inability to protect our intellectual property; cybersecurity incidents; reduction in the performance, reliability and availability of our network infrastructure; increases in costs due to inflation and other adverse economic conditions; decreases in customer demand due to macroeconomic factors; lack of a consistent active trading market for our common stock; volatility in the market price of our common stock; and the failure to remediate the identified material weakness or any other material weaknesses identified in the future.

Current wording

Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those expressed in or implied by such forward-looking statements due to a variety of factors, including: our history of losses, seasonal trends in the pharmaceutical brand marketing industry; the inability to support our technology and scale our operations successfully, developing and implementing new and updated applications, features and services for our solutions may be more difficult and expensive and take longer than expected; the inability to offer high-quality customer support for our solutions; dependence on a concentrated group of customers; inability to maintain contracts with electronic prescription platforms and electronic health record systems, agreements with electronic prescription platforms and electronic health record systems being subject to audit; inability to attract and retain customers; federal or state legislation or regulatory action and/or policy efforts restricting direct-to-consumer advertising and limitations on interactions with healthcare professionals; inability to comply with laws and regulations that affect the healthcare industry; competition; developments in the healthcare industry; inability to manage growth; inability to identify suitable acquisition targets, complete acquisitions, or integrate acquisitions successfully; acquisition activities may disrupt ongoing business and may involve increased expenses; inability to realize the financial and strategic goals contemplated at the time of a transaction; inability to realize any synergies or other anticipated benefits of an acquisition or that such synergies or benefits may take longer than anticipated to be realized; risk that the integration with an acquired entity may be more costly or difficult than expected; impairment charges for goodwill or other long-lived assets may need to be recognized or increased if we lose a major customer, experience a decline in our common stock price, or experience changes to the regulatory environment affecting pharmaceutical advertising restricting the use of our technology; inability to comply with the restrictions in our credit agreement; inability to generate sufficient cash to service debt and fund other obligations; inability to raise capital to grow business on favorable terms or at all; inability to attract and retain senior management and other key employees; economic, political, regulatory and other risks arising from our international operations; inability to protect our intellectual property; cybersecurity incidents; reduction in the performance, reliability and availability of our network infrastructure; increases in costs due to inflation and other adverse economic conditions; decreases in customer demand due to macroeconomic factors; lack of a consistent active trading market for our common stock; volatility in the market price of our common stock; and the failure to remediate the identified material we…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Percent of total revenue attributable to top 20 pharmaceutical manufacturers. Percent of total revenue attributable to top 20 pharmaceutical manufacturers is calculated by taking the total revenue the company recognized through pharmaceutical manufacturers listed in Fierce Pharma’s “The top 20 pharma companies by 2024 revenue” over the last twelve months, divided by our consolidated revenue over the same period. The Company uses this metric to monitor its progress in “landing and expanding” with key customers within its largest customer vertical and believes it also provides investors with a transparent way to chart our progress in penetrating this important customer segment. This decrease in our total revenue attributable to top 20 pharmaceutical manufacturers, in conjunction with the increase in average revenue per top 20 pharmaceutical manufacturer discussed above, is reflective of the onboarding and growth of other customers that are not top 20 pharmaceutical manufacturers and not a decrease in our activity with top 20 pharmaceutical manufacturers.

Current wording

Percent of total revenue attributable to top 20 pharmaceutical manufacturers. Percent of total revenue attributable to top 20 pharmaceutical manufacturers is calculated by taking the total revenue the company recognized through pharmaceutical manufacturers listed in Fierce Pharma’s “The top 20 pharma companies by 2024 revenue” over the last twelve months, divided by our consolidated revenue over the same period. The Company uses this metric to monitor its progress in “landing and expanding” with key customers within its largest customer vertical and believes it also provides investors with a transparent way to chart our progress in penetrating this important customer segment. This decrease in our percent of total revenue attributable to top 20 pharmaceutical manufacturers, in conjunction with the increase in average revenue per top 20 pharmaceutical manufacturer discussed above, is reflective of the onboarding and growth of other customers that are not top 20 pharmaceutical manufacturers and not a decrease in our activity with top 20 pharmaceutical manufacturers.

Previous wording

Net revenue retention. Net revenue retention is a comparison of revenue generated from all customers in the previous twelve-month period to total revenue generated from the same customers in the following twelve-month period (i.e., excludes new customer relationships for the most recent twelve-month period). The Company uses this metric to monitor its ability to improve its penetration with existing customers and believes it also provides investors with a metric to chart our ability to increase our year-over-year penetration and revenue with existing customers. Net revenue for the period ending June 30, 2024 benefited from the timing of the Medicx Health acquisition, which was consummated on October 12, 2023, as its comparator period (the trailing twelve months ended June 30, 2023) did not have any Medicx Health related revenue. The period ended June 30, 2025 did not have the same magnitude of inorganic benefit from the Medicx Health acquisition; however, the Company still retained a 121% net revenue retention in the period as a result of strong organic growth from existing customers.

Current wording

Net revenue retention. Net revenue retention is a comparison of revenue generated from all customers in the previous twelve-month period to total revenue generated from the same customers in the following twelve-month period (i.e., excludes new customer relationships for the most recent twelve-month period). The Company uses this metric to monitor its ability to improve its penetration with existing customers and believes it also provides investors with a metric to chart our ability to increase our year-over-year penetration and revenue with existing customers. Net revenue for the period ending September 30, 2024 benefited from the timing of the Medicx Health acquisition, which was consummated on October 12, 2023, as its comparator period (the trailing twelve months ended September 30, 2023) did not have any Medicx Health related revenue. The period ended September 30, 2025 did not have the same magnitude of inorganic benefit from the Medicx Health acquisition; however, the Company still retained a 120% net revenue retention in the period as a result of strong organic growth from existing customers.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

The following tables sets forth, for the periods indicated, the dollar value and percentage of net revenue represented by certain items in our condensed consolidated statements of operations (in thousands):

Current wording

The following tables set forth, for the periods indicated, the dollar value and percentage of net revenue represented by certain items in our condensed consolidated statements of operations (in thousands):

Previous wording

Our net revenue increased 55% to $29,195 for the three months ended June 30, 2025 from $18,812 from the same period in 2024. Our net revenue increased 33% to $51,123 for the six months ended June 30, 2025 from $38,502 from the same period in 2024. The increase in net revenue was a result of the growth of DTC and DAAP related sales.

Current wording

Our net revenue increased 22% to $26,067 for the three months ended September 30, 2025 from $21,309 from the same period in 2024. Our net revenue increased 29% to $77,190 for the nine months ended September 30, 2025 from $59,811 from the same period in 2024. The increase in net revenue was a result of the growth of DTC and DAAP related sales.

Previous wording

Our cost of revenues, composed primarily of revenue-share expense paid to our channel partners, increased for the three months ended June 30, 2025 to $10,560 compared to $7,108 for the same period of 2024. Our cost of revenues as a percentage of revenue decreased to approximately 36% for the three months ended June 30, 2025 from approximately 38% for the three months ended June 30, 2024. Our cost of revenues increased for the six months ended June 30, 2025 to

Current wording

Our cost of revenues, composed primarily of revenue-share expense paid to our channel partners, increased for the three months ended September 30, 2025 to $8,551 compared to $7,862 for the same period of 2024. Our cost of revenues as a percentage of revenue decreased to approximately 33% for the three months ended September 30, 2025 from approximately 37% for the three months ended September 30, 2024. Our cost of revenues increased for the nine months ended September 30, 2025 to $27,695 compared to $22,456 for the nine months ended September 30, 2024. Our cost of revenues as a percentage of revenue decreased to approximately 36% for the nine months ended September 30, 2025 from approximately 38% for the nine months ended September 30, 2024. This improvement in cost of revenues as a percentage of revenues was primarily a result of solution and channel partner mix.

Previous wording

Our gross margin, which is the difference between our revenues and our cost of revenues, divided by our revenues, increased for the three months ended June 30, 2025 and the six months ended June 30, 2025 compared to the same periods of 2024, primarily due to product and channel partner mix. Further, the increase in revenue year over year diluted the effect of certain fixed cost of sales on gross margin.

Current wording

Our gross margin, which is the difference between our revenues and our cost of revenues, divided by our revenues, increased for the three months ended September 30, 2025 and the nine months ended September 30, 2025 compared to the same periods of 2024, primarily due to product and channel partner mix. Further, the increase in revenue year over year diluted the effect of certain fixed cost of sales on gross margin.

Previous wording

Operating expenses remained consistent, slightly decreasing to $15,446 for the three months ended June 30, 2025 from $15,453 for the same period in 2024. For six months ended June 30, 2025, operating expenses decreased to $30,904 from $32,685 for the six months ended June 30, 2024, a decrease of approximately 5%. The detail by major category is reflected in the table below (in thousands).

Current wording

Operating expenses decreased to $15,466 for the three months ended September 30, 2025 from $22,009 for the same period in 2024, a decrease of approximately 30%. For nine months ended September 30, 2025, operating expenses decreased to $46,371 from $54,695 for the nine months ended September 30, 2024, a decrease of approximately 15%. The detail by major category is reflected in the table below (in thousands).

Previous wording

Stock-based compensation decreased to $1,488 for the three months ended June 30, 2025 from $2,903 for the three months ended June 30, 2024, and decreased to $3,046 for the six months ended June 30, 2025 from $5,926 for the six months ended June 30, 2024. The decrease in both periods was a result of the lower grant date fair value of awards due to declines in the Company’s stock price as well as a decrease in the quantity of awards granted. Further, the prior year expense included significant costs associated with grants to the prior CEO which were forfeited as of December 31, 2024.

Current wording

Stock-based compensation decreased to $1,956 for the three months ended September 30, 2025 from $2,604 for the three months ended September 30, 2024, and decreased to $5,002 for the nine months ended September 30, 2025 from $8,530 for the nine months ended September 30, 2024. The decrease in stock-based compensation expense in both periods primarily reflects changes in the Company’s stock price, which affects the grant-date fair value of awards. The Company’s stock price peaked in 2021, resulting in higher grant-date fair values for awards issued during that period. These higher-valued awards were generally amortized over a three-year vesting period, which concluded in 2024. In addition, stock-based compensation expense in the prior year included costs associated with awards granted to the former CEO, which were forfeited as of December 31, 2024.

Previous wording

Other general and administrative expenses increased to $12,884 for the three months ended June 30, 2025 from $11,477 for the three months ended June 30, 2024, and increased to $25,690 for the six months ended June 30, 2025 from $24,619 for the six months ended June 30, 2024. This increase in both periods is primarily a result of an increase in compensation expense. The increase reflects higher variable compensation tied to sales achievement and performance-based incentive plans aligned with our operating results. These increases were partially offset by cost savings realized across various expense categories as a result of ongoing efficiency initiatives.

Current wording

Other general and administrative expenses increased to $12,430 for the three months ended September 30, 2025 from $10,821 for the three months ended September 30, 2024, and increased to $38,120 for the nine months ended September 30, 2025 from $35,441 for the nine months ended September 30, 2024. This increase in both periods is primarily a result of an increase in compensation expense. The increase reflects higher variable compensation tied to sales achievement and performance-based incentive plans aligned with our operating results. These increases were partially offset by cost savings realized across various expense categories as a result of ongoing efficiency initiatives.

Previous wording

Interest expense increased to $1,603 for the three months ended June 30, 2025 from $1,528 for the three months ended June 30, 2024, and decreased to $2,899 for the six months ended June 30, 2025 from $3,074 for the six months ended June 30, 2024. Interest expense represents interest charges on our Term Loan, together with the amortization of the related issuance costs. The increase is primarily a result of the higher effective interest rate due to the voluntary prepayments of principal on the Term Loan resulting in an interest penalty for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The decrease is primarily a result of the decrease in the interest rate on the Term Loan and a lower average principal balance for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024

Current wording

Interest expense decreased to $1,154 for the three months ended September 30, 2025 from $1,524 for the three months ended September 30, 2024, and decreased to $4,053 for the nine months ended September 30, 2025 from $4,597 for the nine months ended September 30, 2024. Interest expense represents interest charges on our Term Loan, together with the amortization of the related issuance costs. The decrease in both periods is primarily a result of the decrease in the interest rate on the Term Loan and a lower average principal balance for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 and for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024

Previous wording

Interest income decreased to $90 for the three months ended June 30, 2025 from $106 for the three months ended June 30, 2024, and increased to $177 for the six months ended June 30, 2025 from $125 for the six months ended June 30, 2024. The variability in interest income is a result in the fluctuation of interest rates as the balance in the Company's money market account has remained consistent.

Current wording

Interest income decreased to $91 for the three months ended September 30, 2025 from $107 for the three months ended September 30, 2024, and increased to $269 for the nine months ended September 30, 2025 from $231 for the nine months ended September 30, 2024. The variability in interest income is a result in the fluctuation of interest rates as the balance in the Company's money market account has remained consistent.

Previous wording

Income tax expense was $181, or an effective rate of 10.6%, and income tax benefit was $904, or an effective rate of (57.5)% for the three and six months ended June 30, 2025, respectively. Income tax benefit was approximately $1,088, or an effective rate of 21.4%, and $744, or an effective rate of 6.4% for the three and six months ended June 30, 2024, respectively. For further information, see Part I, Item I. Financial Statements; Note 13 — Income Taxes in the Condensed Consolidated Financial Statements.

Current wording

Income tax expense was $270, or an effective rate of 25.7%, and income tax benefit was $633, or an effective rate of (121.5)% for the three and nine months ended September 30, 2025, respectively. Income tax benefit was approximately $817, or an effective rate of 8.2%, and $1,561, or an effective rate of 7.2% for the three and nine months ended September 30, 2024, respectively. For further information, see Part I, Item I. Financial Statements; Note 13 — Income Taxes in the Condensed Consolidated Financial Statements.

Previous wording

We had a net income of approximately $1,532 for the three months ended June 30, 2025, as compared to a net loss of approximately $(4,008) during the three months ended June 30, 2024 and a net loss of approximately $(667) for the six months ended June 30, 2025 as compared to $(10,908) for the six months ended June 30, 2024. The reasons and specific components associated with the change are discussed above.

Current wording

We had a net income of approximately $779 for the three months ended September 30, 2025, as compared to a net loss of approximately $(9,124) during the three months ended September 30, 2024 and a net income of approximately $112 for the nine months ended September 30, 2025 as compared to a net loss of $(20,032) for the nine months ended September 30, 2024. The reasons and specific components associated with the change are discussed above.

Previous wording

Historically, our primary sources of liquidity have been cash receipts from customers and proceeds from equity offerings. In addition, on October 11, 2023, the Company entered into a Term Loan of $40,000 in order to partially fund the acquisition of Medicx Health. As of June 30, 2025, the total principal balance outstanding on the Term Loan was approximately $29,290 and we were in compliance with all of the financial covenants of the Term Loan.

Current wording

Historically, our primary sources of liquidity have been cash receipts from customers and proceeds from equity offerings. In addition, on October 11, 2023, the Company entered into a Term Loan of $40,000 in order to partially fund the acquisition of Medicx Health. As of September 30, 2025, the total principal balance outstanding on the Term Loan was approximately $28,790 and we were in compliance with all of the financial covenants of the Term Loan.

Previous wording

As of June 30, 2025, we had total current assets of approximately $54,080, compared with current liabilities of approximately $21,057, resulting in working capital of approximately $33,023 and a current ratio of approximately 2.6 to 1. This represents a decrease from our working capital of approximately $35,317 and an increase from the current ratio of 3.0 to 1 at December 31, 2024.

Current wording

As of September 30, 2025, we had total current assets of approximately $56,320, compared with current liabilities of approximately $18,466, resulting in working capital of approximately $37,854 and a current ratio of approximately 3.0 to 1. This represents an increase from our working capital of approximately $35,317 and a consistent current ratio compared to 3.0 to 1 at December 31, 2024.

Previous wording

We believe that funds generated from operations, together with existing cash, will be sufficient to finance our current operations and meet our obligations under the Term Loan for the next twelve (12) months. In addition, we believe we can generate the cash needed to operate beyond the next 12 months from operations. However, we may seek additional debt, equity financing, or lines of credit to supplement cash from operations to fund acquisitions or strategic partner relationships, make capital expenditures, and satisfy working capital needs. We currently have an effective shelf registration statement, which allows us to issue, from time to time, up to $75,000,000 of any combination of our common stock, preferred stock, debt securities, warrants, or units.

Current wording

We believe that funds generated from operations, together with existing cash, will be sufficient to finance our current operations and meet our obligations under the Term Loan for the next twelve (12) months. In addition, we believe we can generate the cash needed to operate beyond the next 12 months from operations. However, we may seek additional debt, equity financing, or lines of credit to supplement cash from operations to fund acquisitions or strategic partner relationships, make capital expenditures, and satisfy working capital needs. We currently have an effective shelf registration statement, which allows us to issue, from time to time, up to $75,000 of any combination of our common stock, preferred stock, debt securities, warrants, or units.

Previous wording

Following is a table with summary data from the condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, as presented (in thousands).

Current wording

Following is a table with summary data from the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024, as presented (in thousands).

Previous wording

Our operating activities provided $8,425 during the six months ended June 30, 2025, compared with $2,900 in the same period in 2024. The net increase in net cash provided by operating activities was mainly attributable to a $10,241 decrease in net loss. This was partially offset by a $2,880 decrease in noncash expense related to stock based compensation, a $926 decrease in cash flows from accounts payable and a $870 decrease in cash flows from deferred revenue.

Current wording

Our operating activities provided $11,627 during the nine months ended September 30, 2025, compared with $4,691 in the same period in 2024. The net increase in net cash provided by operating activities was mainly attributable to a $20,144 increase in net income (loss). This was partially offset by a $3,528 decrease in noncash expense related to stock based compensation, a $3,810 decrease in cash flows from accounts receivable and a $3,037 decrease in cash flows from taxes receivable and payable.

Previous wording

Investing activities used $128 during the six months ended June 30, 2025, compared with $238 in the same period in 2024. The decrease in net cash used in investing activities was mainly attributed to a decrease in capitalization of internally developed software.

Current wording

Investing activities used $138 during the nine months ended September 30, 2025, compared with $330 in the same period in 2024. The decrease in net cash used in investing activities was mainly attributed to a decrease in capitalization of internally developed software.

Previous wording

Financing activities used $5,092 during the six months ended June 30, 2025, compared with $1,555 in the same period in 2024. The increase in net cash used for financing activities was primarily related to the increase in repayments of long-term debt partially offset by a decrease in payments of withholding taxes on behalf of employees vesting in restricted stock units.

Current wording

Financing activities used $5,350 during the nine months ended September 30, 2025, compared with $2,087 in the same period in 2024. The increase in net cash used for financing activities was primarily related to the increase in repayments of long-term debt partially offset by a decrease in payments of withholding taxes on behalf of employees vesting in restricted stock units and an increase in the receipt of funds from the exercise of stock options.

Previous wording

In December 2023, the Financial Accounting Standards Board (“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.

Current wording

In December 2023, the Financial Accounting Standards Board (“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.

Previous wording

From time to time, the Company enters into arrangements with channel partners to acquire minimum amounts of media, data or messaging capabilities. As of June 30, 2025, the Company had commitments with channel partners for future minimum payments of $13,071 that will be reflected in cost of revenues during the remainder of 2025 and years from 2026 through 2029. See Part I, Item 2. Financial Statements; Note 12 – Commitments and Contingencies.

Current wording

From time to time, the Company enters into arrangements with channel partners to acquire minimum amounts of media, data or messaging capabilities. As of September 30, 2025, the Company had commitments with channel partners for future minimum payments of $9,609 that will be reflected in cost of revenues during the remainder of 2025 and years from 2026 through 2029. See Part I, Item 2. Financial Statements; Note 12 – Commitments and Contingencies.