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What changed in OptimizeRx Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of OptimizeRx Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+236 added−179 removedSource: 10-K (2024-04-15) vs 10-K (2023-03-10)

Top changes in OptimizeRx Corp's 2023 10-K

236 paragraphs added · 179 removed · 133 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIntellectual Property We own patents important to our business, and we expect to continue to file patent applications to protect our research and development investments in new products. As of December 31, 2022 we held 3 patents and several pending patent applications, including foreign counterpart patents and foreign applications.
Biggest changeFor more information on risks relating to our competition, see Item 1A. Risk Factors. Intellectual Property Historically, we have created intellectual property or obtained intellectual property through commercial relationships and in connection with acquisitions. We own patents important to our business, and we expect to continue to file patent applications to protect our research and development investments in new products.
In recent years, they have met increased competition, shrinking market sizes, and inconsistent access to patients and healthcare professionals - their most important customers. The majority of new drug approvals, 81%, are specialty medications, leading to more complex diagnosis criteria, increased utilization management by healthcare payors, and lengthy wait times for patients to begin treatment once care decisions are made.
In recent years, they have met increased competition, shrinking market sizes, and inconsistent access to patients and healthcare professionals - their most important customers. 81% of new drug approvals are specialty medications, leading to more complex diagnosis criteria, increased utilization management by healthcare payors, and lengthy wait times for patients to begin treatment after care decisions are made.
Risk Factors for more information on the impact of Government Regulations on OptimizeRx. Employees As of December 31, 2022, we had 94 full-time employees in the U.S, as well as 15 full-time employees in Croatia, and 1 part-time employee. None of our employees are represented by a labor union or collective bargaining agreement with respect to their employment with us.
Risk Factors for more information on the impact of Government Regulations on OptimizeRx. Employees As of December 31, 2023, we had 116 full-time employees and 1 part-time employee in the U.S, as well as 19 full-time employees in Croatia. None of our employees are represented by a labor union or collective bargaining agreement with respect to their employment with us.
As a result, life sciences organizations have increasingly turned to technology solutions to support their commercial strategies. Spending on digital solutions to facilitate greater access to their end markets accounts for one-third of their collective $30bn commercial spend in the United States (U.S.).
As a result, life sciences organizations have increasingly turned to technology solutions to support their commercial strategies. Spending on digital solutions to facilitate greater access to their end markets accounts for one-third of their collective commercial spend in the United States of approximately $30 billion.
We believe significant opportunity exists to address the unmet needs of life sciences organizations as they relate to digital solutions, including omni-channel access to health care professionals, for complex commercial challenges. 2022 Company Highlights 1. Net revenue increased to a record $62. 5 million in 2022, a 2% increase over 2021. 2.
We believe significant opportunity exists to address the unmet needs of life sciences organizations as they relate to digital solutions, including omnichannel access to health care professionals, for complex commercial challenges. 2023 Company Highlights 1. Net revenue increased to $71.5 million in 2023, a 15% increase over 2022. 2.
We offer learning and development opportunities and other resources to support our employees in achieving and enhancing their development objectives. We equip our managers with the skills and tools to provide ongoing coaching and feedback so employees can maximize their performance and potential, delivering success for the company and the employee. Available Information Our Internet address is www.optimizerx.com.
We offer other learning and development opportunities and resources to support our employees in achieving and enhancing their development objectives. We equip our managers with the skills and tools to provide ongoing coaching and feedback so employees can maximize their performance and potential, delivering success for the Company and the employee.
Our Diversity, Equity & Inclusion Committee (DE&I) is actively engaged in improving our culture, hiring practices and education. In 2022, we endeavored to uphold the Parity Pledge – a commitment made in 2021 to interview and consider at least one qualified woman and underrepresented minority for every open role, VP or higher.
Our Diversity, Equity, Inclusion & Belonging Committee (DEI&B) is actively engaged in improving our culture, hiring practices and training. In 2023, we upheld the Parity Pledge – a commitment made in 2021 to interview and consider at least one qualified woman and one underrepresented minority for every open role, VP or higher.
The majority of our employees work remotely and are geographically distributed across the United States and Croatia. We supplement our workforce with contractors in the United States and internationally on an as-needed basis.
The majority of our employees work remotely and are geographically distributed across the United States and Croatia. We supplement our workforce with contractors in the United States and internationally on an as-needed basis. We consider our relationship with our employees to be good and have not experienced any work stoppages.
These companies may be better known than we are and have more customers or users than we do. As a result, many of these companies may respond more quickly to new or emerging technologies and standards and changes in customer requirements. These companies may be able to invest more resources in research and development, strategic acquisitions, and sales and marketing.
Many of our competitors have greater financial, technical, product development, marketing and other resources than we do. These companies may be better known than we are and have more customers or users than we do. As a result, many of these companies may respond more quickly to new or emerging technologies and standards and changes in customer requirements.
Our principal solutions can be summarized as follows: Evidence-Based Physician Engagement – Our evidence-based physician engagement solution uses predictive analytics via machine learning methods applied to real-world data (RWD) to assist healthcare providers (HCPs) in identifying patients who may be qualified for specific therapies, raise awareness of patient access pathways, and identify early indicators of non-adherence among patient populations.
Our principal solutions, available individually or through our DAAP, can be summarized as follows: Audience Development ● AI-generated dynamic audience creation using predictive analytics via machine learning methods applied to real-world data (RWD) to assist healthcare providers (HCPs) in identifying patients who may be qualified for specific therapies, raise awareness of patient access pathways, and identify early indicators of non-adherence among patient populations.
This RWD-enabled solution translates into better support for providers as they look to make the best treatment decisions for their patients. This solution has a “patient-first” focus, helping manufacturers identify which HCPs to engage by first identifying if they currently care for qualified patients, based on where they are in their care journey and disease state.
This solution has a “patient-first” focus, helping manufacturers identify which HCPs to engage by first identifying if they currently care for qualified patients, based on where they are in their care journey and disease state.
We conduct our operations through our wholly-owned subsidiaries, OptimizeRx Corporation, a Michigan corporation, CareSpeak Communications, Inc., a New Jersey corporation, CareSpeak Communications, D.O.O., a controlled foreign corporation incorporated in Croatia, and Cyberdiet, a controlled foreign corporation incorporated in Israel.
We conduct our operations through our wholly-owned subsidiaries, Healthy Offers, Inc. (d/b/a Medicx Health or “Medicx Health”), a Nevada corporation, CareSpeak Communications, Inc., a New Jersey corporation, CareSpeak Communications, d.o.o., a controlled foreign corporation incorporated in Croatia, and Cyberdiet, a controlled foreign corporation incorporated in Israel.
Accordingly, our sales efforts are not directed merely at selling individual solutions, but more broadly towards selling enterprise platform engagements with access to our full set of solutions across our network. Our sales and marketing organizations work closely together to cultivate customer relationships.
Our sales team drives awareness of the increased value of our technology stack as an AI tech-enabled marketing platform. Accordingly, our sales efforts are not directed merely at selling individual solutions, but more broadly towards selling enterprise platform engagements with access to our full set of solutions. Our sales and marketing teams work closely together to cultivate customer relationships.
We employ a “land and expand” strategy focused on growing our existing client base and generating greater and more consistent revenues in part through the continued shift in our business model toward enterprise level engagements, while also broadening our platform with innovative proprietary solutions such as our TelaRep™ virtual communication solution and our AI-powered real-world evidence solution which uses sophisticated proprietary algorithms. 1 Industry Background Life sciences organizations face a challenging commercial landscape.
We employ a “land and expand” strategy focused on growing our existing client base and generating greater and more consistent revenues, in part through the continued shift in our business model toward enterprise level engagements, while also broadening our platform with innovative proprietary solutions such as our Artificial Intelligence (AI) powered Dynamic Audience and Activation Platform (“DAAP”), expanding on previous iterations of the RWD.AI technology. which uses sophisticated machine-learning algorithms to find the best audiences in the correct channels at the right time. 1 Industry Background Life sciences organizations face a challenging commercial landscape.
We consider our relationship with our employees to be good and have not experienced any work stoppages.We are dedicated to maintaining an environment where everyone feels valued, and we celebrate both the differences and similarities among our people. We also believe that diversity in all areas, including cultural background, experience and thought, is essential in making our Company stronger.
We are dedicated to providing a supportive and respectful environment to our employees where everyone feels valued, and we celebrate both the differences and similarities among our people. We also believe that diversity in all areas, including cultural background, experience and thought, is essential to bettering a professional environment and in making our Company stronger.
Historically, we have created intellectual property or obtained intellectual property through commercial relationships and in connection with acquisitions. Government Regulation The healthcare industry and, in particular, our customers and partners are subject to U.S. federal, state and local laws and regulations, including those governing fraud, abuse, privacy and security.
In addition, we obtain other intellectual property rights and/or licenses used in connection with our business when practical and appropriate. Government Regulation The healthcare industry and, in particular, our customers and partners are subject to U.S. federal, state and local laws and regulations, including those governing fraud, abuse, privacy and security.
Our platforms compete broadly in the highly competitive pharmaceutical and life sciences digital marketing industry that is dominated by large well-known companies with established names, solid market niches, wide arrays of product offerings and marketing networks. Many of our competitors have greater financial, technical, product development, marketing and other resources than we do.
Our messaging offerings compete for pharmaceutical budgets with a variety of other forms of advertising and promotion. 3 Our solutions compete broadly in the highly competitive pharmaceutical and life sciences digital marketing industry that is dominated by large well-known companies with established names, solid market niches, and wide arrays of product offerings and marketing networks.
This solution provides prescribers visibility to branded copay offers and other patient support programs directly within their EHR and/or e-Prescribe system(s). It allows them to print, digitally send directly to patients via SMS, and/or digitally send copay offer details electronically to the dispensing pharmacy.
Financial Messaging ● Financial Messaging solution providing prescribers visibility to branded copay offers directly within their EHR systems and/or ERx platforms. It allows prescribers to print, digitally send directly to patients via SMS, and/or digitally send copay offer details electronically to the dispensing pharmacy.
Connecting over 60% of U.S. healthcare providers and millions of their patients through an intelligent technology platform embedded within a proprietary point-of-care network, OptimizeRx helps patients start and stay on their medications. We are a Nevada corporation organized in September 2008.
Connecting over two million U.S. healthcare providers and millions of their patients through an intelligent omni-channel technology platform embedded within a proprietary point-of-care network, as well as mass digital communications channels, OptimizeRx helps life sciences organizations engage and support their customers. We are a Nevada corporation organized in September 2008.
Moreover, we believe our long-term incentives are structured in a manner to provide time-based vesting schedules that are retentive and we incentivize selected employees through the granting of stock-based awards for and cash-based performance bonus awards. We have increased our focus on training and development for our current employees.
We pay our employees competitively and offer a broad range of company-paid benefits, which we believe are competitive with others in our industry. Moreover, we believe our long-term incentives are structured in a manner to provide time-based vesting schedules that are retentive and we incentivize select employees through the granting of stock-based awards and cash-based performance bonus awards.
The teams are organized into Centers of Excellence focused on Product Domains, Quality Assurance, Information Security, Data Warehousing and Business Intelligence, Platform Services, and Internal Systems Support.
The teams are organized into Centers of Excellence focused on Product Domains, Quality Assurance, Information Security, Data Warehousing and Business Intelligence, Platform Services, and Internal Systems Support. Systems enhancements in 2023 included upgrades and documentation of processes and procedures and security implementation for ongoing cybersecurity, Sarbanes Oxley, HIPAA, and customer security assessments, and in achieving enterprise HITRUST recertification.
For the United States, patents may last 20 years from the date of the patent’s filing, depending upon term adjustments made by the patent office. In addition, we hold trademarks in the United States and other countries. As of December 31, 2022, OPTIMIZERx, OPTIMIZEMD, CareSpeak, DIETWATCH, Innovate4Outcomes, SPRx, SPx and TELAREP are our registered trademarks.
As of December 31, 2023, we held five patents and two pending patent applications, including foreign counterpart patents and foreign applications. For the United States, patents may last 20 years from the date of the patent’s filing, subject to term adjustments made by the patent office. In addition, we own registered trademarks in the United States and other countries.
The primary direct competitor in our financial messaging solution is ConnectiveRx. We generally compete on the basis of several factors, including size of our network, quality of our service, our ability to target specific customer needs, and to a lesser extent, price. For more information on risks relating to our competition, see Item 1A. Risk Factors.
These companies may be able to invest more resources in research and development, strategic acquisitions, and sales and marketing. We generally compete on the basis of several factors, including size of our network, quality of our service, our ability to target specific customer needs, and to a lesser extent, price.
Our solution addresses the fact that many healthcare systems and prescribers are looking for an easier, more effective way to increase affordable access and adherence to their prescribed branded medications. Patient Engagement – Our technology solution provides digital messaging services through our cloud-based Mobile Health Messenger (“MHM”) Platform. We provide interactive health messaging for improved medication adherence and care coordination.
Our solution addresses the fact that many healthcare systems and prescribers are looking for an easier, more effective way to increase affordable access to their prescribed branded medications. Sales and Marketing We employ a sales team of over 20 people, marketing our solutions to new and existing clients.
We compete for users with online services and websites that provide savings on medications and healthcare products. Our messaging offerings compete for pharmaceutical budgets with a variety of other forms of advertising and promotion.
Competition Our solutions face competition from numerous other companies, both in attracting users and in generating revenue from advertisers and sponsors. We compete for users with online services and websites that provide savings on medications and healthcare products.
We use a number of methods to market and promote our solutions, including digital advertising, industry events, trade shows, conferences, media coverage, social media and email. We released a physician survey of 100 physicians across five specialties, detailing the specialty landscape as it pertains to prescribing pain points specialists experience.
We use a number of methods to market and promote our solutions, including digital advertising, industry events, trade shows, conferences, media coverage, social media and email. In 2023, we enhanced our RWD.AI platform solution to become the premier platform to devise and execute Next-Best-Action marketing strategies within healthcare professional audiences and branded the platform as DAAP.
The information on the website is not and should not be considered part of this Form 10-K and is not incorporated by reference in this Form 10-K. The website is, and is only intended to be, for reference purposes only.
Information contained on or accessible through the websites and social media channels referred to above is not incorporated by reference in, or otherwise a part of, this Annual Report, and any references to these websites and social media channels are intended to be inactive textual references only.
We also have several pending trademark applications. We also have licenses to intellectual property for the use and sale of certain of our solutions. In addition, we obtain other intellectual property rights and/or licenses used in connection with our business when practical and appropriate.
As of December 31, 2023, OPTIMIZERx, OPTIMIZEMD, CareSpeak, DIETWATCH, Innovate4Outcomes, SPRx, SPx, RMDY, Specialty Express, TELAREP, Medicx, Micro-Neighborhood, and Geomedical Targeting are our registered trademarks. We also have several pending trademark applications. We also have licenses to intellectual property for the use and sale of certain of our solutions.
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Achieved positive cash flow from operations of $10.7 million for the year ended December 31, 2022. 3. Gross margins increased from 58% to 62%. 4. Repurchased 1,214,398 shares during 2022 at an average price of $16.49 per share. 5. Increased use of Real-World Data Artificial Intelligence (“RWD.AI”) solutions. Ended the year with 6 RWD.AI deals. 6.
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Gross profit increased to $ 42.9 million in 2023 from $ 39.0 million in 2022 with corresponding gross margins of 60.0% and 62.4% , respectively. 3. Meaningfully increased our DAAP footprint. With 2023 having 24 DAAP deals compared to only six deals in 2022. 4.
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Acquired the EvinceMed platform and related assets. 7. Published Company’s first Environmental, Social and Governance (“ESG”) Report. 8. Announced partnership with Equals 5, becoming the only source capable of delivering true omni-channel engagement with HCPs, spanning web, social, and point-of-care messaging delivery modalities.
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Acquired Medicx Health, a leading healthcare consumer-focused omnichannel marketing and analytics company that significantly expands our footprint with consumers and patients. 5. Refocused operations on core solutions to streamline efficiencies and better position the Company to capitalize on synergies with Medicx Health, focusing on Audience Development, Audience Activation and Media Execution, and Financial Messaging.
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Principal Solutions Historically, we primarily facilitated financial messages to health care providers via their EHR and ePrescribe systems using the OptimizeRx proprietary network to solve the ever-increasing communication barriers between pharmaceutical representatives and healthcare providers.
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Principal Solutions The Company’s original solution was Financial Messaging - the delivery of treatment-specific financial support information for patients distributed directly to healthcare prescribers through a combination of our proprietary technology and a network of electronic health record (EHR) and electronic prescribing (ERx) platforms.
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Over time, as the demand for communication of an increasing variety of different health information between life science companies, providers, and patients has risen, our platform has expanded to encompass additional solutions that enable healthcare providers to access information for patients at the point of care.
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Over time, the demand for different types of communication and marketing solutions among life sciences organizations, healthcare providers, and patients led us to expand upon our initial solution to increase the variety of health-related information we deliver, as well as the platforms, technology, and audiences through and to which we deliver.
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These solutions include evidence-based physician engagement, point of care banner messaging, social network banner messaging, institutional account-based banner messaging, innovative patient engagement services, and various accelerators to the therapy initiation workflow.
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Today, we offer diverse tech-enabled marketing solutions through our AI-generated DAAP, which enables customers to execute traditional marketing campaigns on our proprietary digital point-of-care network, as well as dynamic marketing campaigns that optimize audiences in real time to increase the value of treatment information for healthcare professionals and patients in response to clinical care events.
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These Artificial Intelligence (“AI”) models provide our clients with the most relevant targets and fuel the deployment of programs across our other solutions.
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These AI models provide our clients with the most relevant targets and fuel the deployment of programs across our other solutions. ● Creation of consumer audiences using our privacy-safe and HIPAA-compliant Micro-Neighborhood Targeting® technology available for traditional media execution through major programmatic Demand-Side Platforms (DSPs) 2 Audience Activation and Media Execution ● HCP media execution delivering awareness (brand, therapeutic support, affordability, HUB, limited distribution, and patient support program) messaging via our HCP omnichannel network including digital point-of-care banners within clinical workflow applications, such as EHR systems and ERx platforms, programmatic social media, and programmatic display. ● Consumer audience media execution delivering consumer awareness via our consumer omnichannel network including programmatic display, programmatic connected television (CTV)/over-the-top (OTT), programmatic social media, addressable television (ATV), digital out-of-home (OOH), programmatic audio (podcasts, apps, radio), and email/direct mail.
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Point of Care Banner Messaging – Our point of care banner messaging solution is utilized to deliver a variety of awareness (brand, therapeutic support, affordability, HUB, and patient support program) and messaging within the clinical workflow which can be tailored to meet the needs of each brand.
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In addition, the DEI&B Committee sponsored quarterly events in 2023, including “Historic Women Inventors”, “Mental Health Awareness”, “Step Challenge”, and “Affinity Groups”. 4 We prioritize recruiting, retaining, and incentivizing a highly qualified, diverse workforce as the success of our Company is dependent on the skills, experience, and efforts of our employees.
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Social Network Banner Messaging – This past year we expanded to provide exclusive access to deliver banner messaging to HCPs within their social network apps. With extensive reach and granular reporting, this solution both expands the ability to reach more prescribers while adding to the mind share we can capture throughout a care delivery day.
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A skilled workforce not only improves a company’s performance, but also contributes to overall employee satisfaction and enhances human capital. We have increased our focus on training and development for our current employees and have implemented a Learning Management System where current and future training modules will be presented and tracked for reporting purposes.
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Given these messages are targeted to specific HCPs, many of the same awareness messages offered on the point of care banner solution are offered here as well. 2 Institutional Account-based Banner Messaging – Our Institutional Account-based Banner Messaging solution provides our clients access to delivering banner messaging online and on the intranets of targeted health system accounts.
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Available Information We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance therewith, we file reports, proxy and information statements and other information with the Securities and Exchange Commission (the “SEC”). You can read our SEC filings over the Internet at the SEC’s website at www.sec.gov.
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This allows our clients to capture additional mind share while also reaching other prescribers and support staff at key health systems or integrated delivery networks (IDNs). Financial Messaging – Our Financial Messaging solution has been enhanced by Patient Support Messaging at the point-of-care.
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Our filings with the SEC are also available free of charge through the investor relations section of our website at www.optimizerx.com. Reports are available free of charge as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.
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Our HIPAA-compliant, automated, mobile messaging platform allows pharmaceutical manufactures and related entities to directly engage with patients to improve regimen compliance. Therapy Initiation Workflow – The therapy initiation workflow is a group of digital solutions focused on accelerating patient access to treatments where time-consuming medical documentation is required of HCPs prior to pharmacies dispensing prescribed drugs.
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From time to time, we also use multiple social media channels to communicate with the public about OptimizeRx. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage you to review the information we post on the social media channels listed on our investor relations website, if any.
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These solutions support the fast-growing area of specialty medications. This technology enhancement allows life sciences companies to simplify therapy initiation by presenting HCPs with a fully electronic option synchronizing enrollment, benefits verification, prior authorization, and patient support onboarding. Sales and Marketing We employ a sales team of over 19 pe ople, marketing our solutions to new and existing clients.
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Our sales team drives awareness of the increased value of our technology stack as an enterprise platform, enhanced this year by the addition of the social channel, and momentum of our institutional/account-based banner message solutions offering.
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Additionally, we hosted our third annual Innovate4Outcomes event, partnering with Melinta Therapeutics, bringing individuals together across healthcare verticals, including HCPs, commercial manufacturer representatives, and health tech. The event focused on applying design thinking principles to contributing factors to Anti-Microbial Resistance, and was independently covered in end-of-year trade publications for the first time.
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Systems enhancements in 2022 included upgrades and documentation of processes and procedures and security implementation for ongoing Sarbanes Oxley, HIPAA, and customer assessments, and in achieving Enterprise HITRUST Certification, as well as for other needs. 3 Competition Our platforms face competition from numerous other companies, both in attracting users and in generating revenue from advertisers and sponsors.
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In addition, the DE&I Committee sponsored quarterly events in 2022, including “Celebrate Women’s History”, “Celebrate Diversity Month”, and “Hot One’s Trivia Show.” 4 We prioritize recruiting, retaining, and incentivizing a highly qualified, diverse workforce. We pay our employees competitively and offer a broad range of company-paid benefits, which we believe are competitive with others in our industry.
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We make available free of charge on or through our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
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In addition, we will provide, at no cost, paper or electronic copies of our reports and other filings made with the SEC. Requests should be directed to: Attention: Secretary, OptimizeRx Corporation, 400 Water Street, Suite 200, Rochester, MI 48307.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch arrangements subject us to a number of risks, including the following: ● Our ERx and EHR partners may experience financial, regulatory or operational difficulties, which may impair their ability to focus on and fulfill their contract obligations to us; ● Legal disputes or disagreements, including the ownership of intellectual property, may occur with one or more of our ERx and EHR partners and may lead to lengthy and expensive litigation or arbitration; ● Significant changes in an ERx and EHR partner’s business strategy may adversely affect a partner’s willingness or ability to satisfy obligations under any such arrangement; ● The failure of an ERx or EHR partner to provide accurate and complete financial information to us or to maintain adequate and effective internal control over its financial reporting may negatively affect our ability to meet our financial reporting obligations as required by the SEC;and ● An ERx and EHR partner could terminate the partnership arrangement, which could negatively impact our ability to sell our solutions and achieve revenues.
Biggest changeSuch arrangements subject us to a number of risks, including the following: ● Our ERx and EHR partners may experience financial, regulatory or operational difficulties, which may impair their ability to focus on and fulfill their contract obligations to us; ● Legal disputes or disagreements, including the ownership of intellectual property, may occur with one or more of our ERx and EHR partners and may lead to lengthy and expensive litigation or arbitration; ● Significant changes in an ERx and EHR partner’s business strategy may adversely affect a partner’s willingness or ability to satisfy obligations under any such arrangement; ● An ERx and EHR partner could terminate the partnership arrangement, which could negatively impact our ability to sell our solutions and achieve revenues; and ● The failure of an ERx or EHR partner to provide accurate and complete financial information to us or to maintain adequate and effective internal control over its financial reporting may negatively affect our ability to meet our financial reporting obligations as required by the SEC.
The loss of any member of our senior management team or any of our other key employees could damage critical customer relationships, result in the loss of vital knowledge, experience and expertise, could lead to an increase in recruitment and training costs and make it more difficult to successfully operate our business and execute our business strategy.
The loss of any member of our senior management team or any of our other key employees could damage critical customer relationships, result in the loss of vital knowledge, experience and expertise, lead to an increase in recruitment and training costs, and make it more difficult to successfully operate our business and execute our business strategy.
In addition to the risks that we face in the United States, our international operations in Israel and Croatia, may involve risks that could adversely affect our business, including: ● difficulties and costs associated with staffing and managing foreign operations; ● natural or man-made disasters, political, social and economic instability, including wars, terrorism and political unrest, outbreak of disease , boycotts, curtailment of trade, and other business restrictions; ● compliance with United States laws, such as the Foreign Corrupt Practices Act, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials; ● unexpected changes in regulatory requirements; ● less favorable foreign intellectual property laws; ● adverse tax consequences such as those related to repatriation of cash from foreign jurisdictions into the United States, non-income related taxes such as value-added tax or other indirect taxes, changes in tax laws or their interpretations, or the application of judgment in determining our global provision for income taxes and other tax liabilities given inter-company transactions and calculations where the ultimate tax determination is uncertain; ● fluctuations in currency exchange rates, which could impact expenses of our international operations and expose us to foreign currency exchange rate risk; ● profit repatriation and other restrictions on the transfer of funds; ● differing payment processing systems as well as use and acceptance of electronic payment methods, such as payment cards; ● new and different sources of competition; and ● different and more stringent user protection, data protection, privacy and other laws.
In addition to the risks that we face in the United States, our international operations in Israel and Croatia, may involve risks that could adversely affect our business, including: ● difficulties and costs associated with staffing and managing foreign operations; ● natural or man-made disasters, political, social and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade, and other business restrictions; ● compliance with United States laws, such as the Foreign Corrupt Practices Act, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials; ● unexpected changes in regulatory requirements; ● less favorable foreign intellectual property laws; ● adverse tax consequences such as those related to repatriation of cash from foreign jurisdictions into the United States, non-income related taxes such as value-added tax or other indirect taxes, changes in tax laws or their interpretations, or the application of judgment in determining our global provision for income taxes and other tax liabilities given inter-company transactions and calculations where the ultimate tax determination is uncertain; 12 ● fluctuations in currency exchange rates, which could impact expenses of our international operations and expose us to foreign currency exchange rate risk; ● profit repatriation and other restrictions on the transfer of funds; ● differing payment processing systems as well as use and acceptance of electronic payment methods, such as payment cards; ● new and different sources of competition; and ● different and more stringent user protection, data protection, privacy and other laws.
We cannot assure you that steps taken by us to protect our intellectual property and other contractual agreements for our business will be adequate, that our competitors will not independently develop or patent substantially equivalent or superior technologies or be able to design around patents that we may receive, or that our intellectual property will not be misappropriated.
We cannot assure that steps taken by us to protect our intellectual property and other contractual agreements for our business will be adequate, that our competitors will not independently develop or patent substantially equivalent or superior technologies or be able to design around patents that we may receive, or that our intellectual property will not be misappropriated.
If we suffer sustained or repeated interruptions, then our solutions and services could be less attractive to our users and our business would be materially harmed. Risks Relating to Our Common Stock If a market for our common stock is not maintained, shareholders may be unable to sell their shares.
If we suffer sustained or repeated interruptions, then our solutions and services could be less attractive to our users and our business would be materially harmed. 14 Risks Relating to Our Common Stock If a market for our common stock is not maintained, shareholders may be unable to sell their shares.
The potential consequences of a material cybersecurity incident include reputational damage, loss of customers, litigation with customers and other parties, loss of trade secrets and other proprietary business data and increased cybersecurity protection and remediation costs, which in turn could adversely affect our competitiveness and results of operations.
The potential consequences of a material cybersecurity incident include reputational damage, loss of customers, loss of income, litigation with customers and other parties, loss of trade secrets and other proprietary business data and increased cybersecurity protection and remediation costs, which in turn could adversely affect our competitiveness and results of operations.
Adverse changes in demand could impact our business, collection of accounts receivable and our expected cash flow generation, which may adversely impact our financial condition and results of operations. Risks Related to Our Intellectual Property and Technology We are dependent, in part, on our intellectual property.
Adverse changes in demand could impact our business, collection of accounts receivable and our expected cash flow generation, which may adversely impact our financial condition and results of operations. 13 Risks Related to Our Intellectual Property and Technology We are dependent, in part, on our intellectual property.
Any of the foregoing could have a material adverse effect upon our business, financial condition and results of operations. 11 Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.
Any of the foregoing could have a material adverse effect upon our business, financial condition and results of operations. Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.
While we employ comprehensive measures to prevent, detect, address and mitigate these threats (including access controls, insurance, vulnerability assessments, continuous monitoring of our IT networks and systems, maintenance of backup and protective systems and user training and education), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties) and the disruption of business operations.
While we employ extensive measures to prevent, detect, address and mitigate these threats (including access controls, insurance, vulnerability assessments, continuous monitoring of our IT networks and systems, maintenance of backup and protective systems and user training and education), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties) and the disruption of business operations.
This could result in significant expenses to remediate any internal control deficiencies and lead to a decline in our stock price. 13 The Company has identified a material weakness in the Company’s internal control over financial reporting.
This could result in significant expenses to remediate any internal control deficiencies and lead to a decline in our stock price. The Company has identified a material weakness in the Company’s internal control over financial reporting.
We generally expect these seasonality trends to continue and our ability to effectively manage our resources in anticipation of these trends may affect our operating results. 5 Developing and implementing new and updated applications, features and services for our portals may be more difficult than expected, may take longer and cost more than expected and may not result in sufficient increases in revenue to justify the costs.
We generally expect these seasonality trends to continue and our ability to effectively manage our resources in anticipation of these trends may affect our operating results. 5 Developing and implementing new and updated applications, features and services for our solutions may be more difficult than expected, may take longer and cost more than expected and may not result in sufficient increases in revenue to justify the costs.
We incurred losses in 2022 as a result of our increased spending to build the organization to support expected future growth – both through additional new hires, as well as through acquisitions. While we have increased revenues, we have not yet consistently achieved profitability due to these investments and non-cash expenses.
We incurred losses in 2023 as a result of our increased spending to build the organization to support expected future growth – both through additional new hires, as well as through acquisitions. While we have increased revenues, we have not yet consistently achieved profitability due to these investments and non-cash expenses.
There can be no assurance that the revenue opportunities from any new or updated technologies, applications, features or services will justify the amounts spent. Any failure to offer high-quality customer support for our portals may adversely affect our relationships with our customers and harm our financial results.
There can be no assurance that the revenue opportunities from any new or updated technologies, applications, features or services will justify the amounts spent. Any failure to offer high-quality customer support for our solutions may adversely affect our relationships with our customers and harm our financial results.
However, competition for these types of employees is intense due to the limited number of qualified professionals. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality people with advanced skills who understand our industry, technology and business.
However, competition for these types of employees is intense due to the limited number of qualified professionals with expertise in our industry. Our ability to meet our business development objectives will depend in part on our ability to recruit, train, incentivize, and retain top quality people with advanced skills who understand our industry, technology, and business.
In addition, macroeconomic effects such as increases in interest rates and other measures taken by central banks and other policy makers could have a negative effect on overall economic activity that could reduce our customers’ demand for our products and serves.
In addition, macroeconomic effects such as changes in interest rates and other measures taken by central banks and other policy makers could have a negative effect on overall economic activity that could reduce our customers’ demand for our products and serves.
While we are not a Covered Entity, we have contracted as a business associate of our Covered Entity customers and, as such, may be regulated by HIPAA and have contractual obligations unders such agreements, including to enter into business associate agreements with our third-party vendors.
While we are not a Covered Entity, we have contracted as a business associate of our Covered Entity customers and, as such, may be regulated by HIPAA and have contractual obligations under such agreements, including to enter into business associate agreements with our third-party vendors.
The markets in which we operate are competitive, continually evolving and, in some cases, subject to rapid change. Our platforms face competition from numerous other companies, both in attracting users and in generating revenue from advertisers and sponsors.
The markets in which we operate are competitive, continually evolving and, in some cases, subject to rapid change. Our solutions face competition from numerous other companies, both in attracting users and in generating revenue from advertisers and sponsors.
Attracting and retaining users of our portals requires us to continue to improve the technology underlying those portals and to continue to develop new and updated applications, features and services for those portals.
Attracting and retaining users of our solutions requires us to continue to improve the technology underlying those solutions and to continue to develop new and updated applications, features and services for those solutions.
We rely on a combination of internal development, strategic relationships, licensing and acquisitions to develop our portals and related applications, features and services.
We rely on a combination of internal development, strategic relationships, licensing and acquisitions to develop our solutions and related applications, features and services.
Since there are no substantial barriers to entry into the markets in which our public portals participate, we expect that competitors will continue to enter these markets. Developments in the healthcare industry could adversely affect our business.
Since there are no substantial barriers to entry into the markets in which we participate, we expect that competitors will continue to enter these markets. 8 Developments in the healthcare industry could adversely affect our business.
Risks Related to Inflation and Other Adverse Economic Conditions Inflation and other adverse economic conditions may adversely affect our business, results of operations and financial condition. Recently, inflation has increased throughout the U.S. economy. In an inflationary environment, we may experience increases in the prices of labor and other costs of doing business.
Risks Related to Inflation, Interest Rates, and Other Adverse Economic Conditions Inflation, the current interest rate environment, and other adverse economic conditions may adversely affect our business, results of operations and financial condition. Recently, inflation has increased throughout the U.S. economy. In an inflationary environment, we may experience increases in the prices of labor and other costs of doing business.
If an underpayment is determined to be in excess of a certain amount, for example 10%, some agreements would require us to pay for the cost of the audit, as well. If we fail to attract new customers or retain and expand existing customers, our business and future prospects may be materially and adversely impacted.
Some agreements would require us to also pay for the cost of the audit if an underpayment is determined to be in excess of a certain amount. If we fail to attract new customers or retain and expand existing customers, our business and future prospects may be materially and adversely impacted.
We are reliant upon our contracts with leading electronic prescribing (“ERx”) platforms and electronic health record (“EHR”) systems to generate our revenues received from customers.
We are reliant upon our contracts with leading electronic prescribing (“ERx”) platforms and electronic health record (“EHR”) systems to generate a portion of the revenues received from our customers.
Any such delays in the preparation of financial reports and the filing of our periodic reports may result in a loss of public confidence in the reliability of our financial statements, which, in turn, could materially adversely affect our business, the market value of our common stock and our access to capital markets. Item 1B. Unresolved Staff comments None
Any such delays in the preparation of financial reports and the filing of our periodic reports may result in a loss of public confidence in the reliability of our financial statements, which, in turn, could materially adversely affect our business, the market value of our common stock and our access to capital markets. 16
Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that may be different from and incremental to those in the United States.
We could be subject to economic, political, regulatory and other risks arising from our international operations. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that may be different from, and incremental to, those in the United States.
Our top five customers represented 39% of revenue for the year ended December 31, 2022. In each of 2022 and 2021, we had one customer that each represented slightly over 10% of our revenues.
Our top five customers represented approximately 44% of revenue for the year ended December 31, 2023. In each of 2023 and 2022, we had one customer that each represented over 10% of our revenues.
We may not be able to find qualified potential replacements for these individuals and the integration of potential replacements may be disruptive to our business. Furthermore, our ability to expand operations to accommodate our anticipated growth will also depend on our ability to attract and retain qualified management, sales and technical personnel.
We may not be able to find qualified potential replacements for these individuals and the integration of potential replacements may be disruptive to our business. Furthermore, our business also depends on our ability to attract and retain qualified management, sales and technical personnel.
Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers. Our growth may be impacted by acquisitions.
Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers. 9 We may not be able to identify suitable acquisition candidates, complete acquisitions or integrate acquisitions successfully.
We do not expect to pay dividends in the foreseeable future and any return on investment may be limited to the value of our common stock. We have never declared or paid any cash dividends on our common stock.
These market fluctuations may also materially and adversely affect the market price of our common stock. 15 We do not expect to pay dividends in the foreseeable future and any return on investment may be limited to the value of our common stock. We have never declared or paid any cash dividends on our common stock.
General reductions in expenditures by healthcare industry participants could result from, among other things: ● Government regulation or private initiatives that affect the manner in which healthcare industry participants interact with consumers and the general public; ● Government regulation prohibiting the use of coupons by patients covered by federally funded health insurance programs; ● Consolidation of healthcare industry participants; ● Reductions in governmental funding for healthcare; and ● Adverse changes in business or economic conditions affecting healthcare industry participants. 8 Even if general expenditures by industry participants remain the same or increase, developments in the healthcare industry may result in reduced spending in some or all of the specific market segments that we serve now or may serve in the future.
General reductions in expenditures by healthcare industry participants could result from, among other things: ● Government regulation or private initiatives that affect the manner in which healthcare industry participants interact with consumers and the general public; ● Government regulation prohibiting the use of coupons by patients covered by federally funded health insurance programs; ● Consolidation of healthcare industry participants; ● Reductions in governmental funding for healthcare; and ● Adverse changes in business or economic conditions affecting healthcare industry participants.
We will need to maintain these relationships as well as diversify them. The inability to do so could adversely impact our business. We generated 31.8% and 53.9% of our revenue through our largest partner in 2022 and 2021, respectively. Our agreements with ERx and EHR channel partners are subject to audit.
See Part II, Item 9A. “Controls and Procedures.” We generated 36.4% and 31.8% of our revenue through our largest partner in 2023 and 2022, respectively. As such, the inability to maintain these relationships could adversely impact our business. Our agreements with ERx and EHR channel partners are subject to audit.
We may seek additional acquisition opportunities, both to further diversify our business and to penetrate or expand important product offerings or markets. There are no assurances, however, that we will be able to successfully identify suitable candidates, negotiate appropriate terms, obtain financing on acceptable terms, complete proposed acquisitions, successfully integrate acquired businesses, or expand into new markets.
There are no assurances, however, that we will be able to successfully identify suitable candidates, negotiate appropriate terms, obtain financing on acceptable terms, complete proposed acquisitions, successfully integrate acquired businesses, or expand into new markets. Once acquired, operations may not achieve anticipated levels of revenues or profitability.
Although our management will endeavor to evaluate the risks inherent in any particular transaction, there are no assurances that we will properly ascertain all such risks.
Acquisitions involve risks, including difficulties in the integration of the operations, technologies, services and products of the acquired companies and the diversion of management’s attention from other business concerns. Although our management will endeavor to evaluate the risks inherent in any particular transaction, there are no assurances that we will properly ascertain all such risks.
Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock.
Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.
Difficulties encountered with acquisitions could have a material adverse impact on our business. 9 Our business and growth may suffer if we are unable to attract and retain members of our senior management team and other key employees.
Any inability to generate sufficient cash flow or refinance our indebtedness on favorable terms could have an adverse effect on our financial condition. 11 Our business and growth may suffer if we are unable to attract and retain members of our senior management team and other key employees.
Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock. 12 The market price of our common stock may be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.
Our inability to raise additional capital on acceptable terms in the future may limit our ability to continue to operate our business and further expand our operations. The market price of our common stock may be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.
Our failure to manage any of these risks successfully could harm our international operations and our overall business, as well as results of our operations. 10 A global pandemic may disrupt our business or the business of our customers. In December 2019, a novel strain of corona virus, which causes the infectious disease known as COVID-19 was reported.
Our failure to manage any of these risks successfully could harm our international operations and our overall business, as well as results of our operations. We may in the future be adversely affected by health epidemics and pandemics, including COVID-19, which may significantly harm our business, prospects, financial condition and operating results.
If we are unable to engage and retain the necessary personnel, our business may be materially and adversely affected. We could be subject to economic, political, regulatory and other risks arising from our international operations.
If we are unable to engage, incentivize, and retain the necessary personnel, our business may be materially and adversely affected. Geopolitical events may affect our business and our customer base and have a material adverse impact on our sales and operating results.
We may not be able to identify suitable acquisition candidates, complete acquisitions or integrate acquisitions successfully. Our future growth is likely to depend to some degree on our ability to acquire and successfully integrate new businesses. We may not be able to identify suitable acquisition candidates, complete acquisitions, or integrate acquisitions successfully.
We may not be able to identify suitable acquisition candidates, complete acquisitions, or integrate acquisitions successfully. We may seek additional acquisition opportunities, both to further diversify our business and to penetrate or expand important product offerings or markets.
Removed
It is possible that HIPAA compliance could become a substantial regulatory burden and expense to our operations as we expand our point of care technology solutions to help patients start and stay on therapies.
Added
Even if general expenditures by industry participants remain the same or increase, developments in the healthcare industry may result in reduced spending in some or all of the specific market segments that we serve now or may serve in the future.
Removed
Once acquired, operations may not achieve anticipated levels of revenues or profitability. Acquisitions involve risks, including difficulties in the integration of the operations, technologies, services and products of the acquired companies and the diversion of management’s attention from other business concerns.
Added
Difficulties encountered with acquisitions could have a material adverse impact on our business. Our acquisition activities may disrupt our ongoing business and may involve increased expenses, and we may not realize the financial and strategic goals contemplated at the time of a transaction. We have acquired, and may in the future acquire, companies, businesses, products, services and technologies.
Removed
The World Health Organization declared COVID-19 a Public Health Emergency and Global Pandemic. Although many economies around the world have started to rebound from the severe impact of COVID-19, the healthcare industry in which we operate remains impacted.
Added
Acquisitions involve significant risks and uncertainties, including: – our ongoing business may be disrupted, an acquisition may involve increased expenses, and our management’s attention may be diverted by acquisition, transition, or integration activities; – we may not further our business strategy as we expected, – we may not realize any synergies or other anticipated benefits of an acquisition or such synergies or benefits may take longer than anticipated to be realized; – we may overpay for our investments, or otherwise not realize the financial returns contemplated at the time of the acquisition; – integration with acquired operations or technology may be more costly or difficult than expected and such integration may not be successful; – we may be unable to retain the key employees, customers and other channel partners of the acquired operation; – we may not realize the anticipated increases in our revenues from an acquisition; and – our use of cash to pay for acquisitions may limit other potential uses of our cash.
Removed
The emergence and spread of new variants and resurgences, or other epidemics or pandemics, actions taken by governmental authorities and others in response to the pandemic, the acceptance, and the ability of pharmaceutical manufacturers and other life sciences companies to develop effective and safe treatment, and global economic conditions could affect the desire and/or need for our solutions.
Added
Impairment charges for goodwill or other intangible assets may be increased as we shift our focus away from our non-core businesses. Annually, we evaluate goodwill and long-lived assets to determine if impairment has occurred. Additionally, interim reviews are performed whenever events or changes to the business could indicate possible impairment.
Added
Any future impairment of our goodwill or long-lived assets could require us to record an impairment charge, which would negatively impact our results of operations. For example, our strategic shift away from non-core business resulted in an impairment of one or more of our long-lived assets. See Part II, Item 7.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operation of the Years Ended December 31, 2023 and 2022 - Operating Expenses.” 10 Market conditions could adversely change and our earnings could decline resulting in charges to impair intangible assets, such as goodwill.
Added
As a result of our various acquisitions, the consolidated balance sheet at December 31, 2023 contains goodwill of approximately $78.4 million and intangible assets, net of approximately $49.4 million. We evaluate on an ongoing basis whether facts and circumstances indicate any impairment to the carrying value of indefinite-lived intangible assets such as goodwill.
Added
As circumstances after an acquisition can change, we may not realize the value of these intangible assets. During the year ended December 31, 2023 , we recorded impairment charges, related to certain intangible assets, of approximately $6.7 million.
Added
Any future impairment charges related to our goodwill or long-lived assets could require us to record additional impairment charges, which would negatively impact our results of operations. Restrictions in our Credit Agreement could adversely affect our business, financial condition, results of operations, ability to make distributions, and the value of our securities.
Added
Our Credit Agreement contains customary affirmative covenants, including, among others, covenants pertaining to the delivery of financial statements; certain financial covenants; notices of default and certain other material events; payment of obligations; preservation of corporate existence, rights, privileges, permits, licenses, franchises and intellectual property; maintenance of property and insurance and compliance with laws, as well as customary negative covenants, including, among others, limitations on the incurrence of liens and entering into capital leases, investments and indebtedness; mergers and certain other fundamental changes; dispositions of assets; restricted payments; changes in our line of business; transactions with affiliates and burdensome agreements.
Added
These covenants could affect our ability to operate our business, increase the amount of interest expense we ultimately pay pursuant to the Credit Agreement, and may limit our ability to take advantage of potential business opportunities as they arise.
Added
Our ability to comply with the covenants and restrictions contained in our Credit Agreement, may be affected by events beyond our control, including prevailing economic, financial, and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.
Added
A failure to comply with these provisions could result in a default or an event of default.
Added
Upon an event of default, unless waived, the lenders could elect to terminate their commitments, cease making further loans, require cash collateralization of letters of credit, cause their loans to become due and payable in full, foreclose against any assets securing the debt under our Credit Agreement and force us and our subsidiaries into bankruptcy or liquidation.
Added
If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and the holders of our stock could experience a partial or total loss of their investment.
Added
Servicing debt and funding other obligations requires a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which are beyond our control.
Added
Our ability to make payments on and refinance our indebtedness and to fund our operations and capital expenditures depends on our ability to generate cash flow and secure financing in the future.
Added
Our ability to generate future cash flow depends, among other things, on future operating performance, general economic conditions, competition, and legislative and regulatory factors affecting our operations and business. Some of these factors are beyond our control.
Added
There is no assurance that our business will generate cash flow from operations or that future debt or equity financings will be available to us to enable us to pay our indebtedness or to fund other needs. As a result, we may need to refinance all or a portion of our indebtedness on or before maturity.
Added
There is no assurance that we will be able to refinance any of our indebtedness on favorable terms, or at all.
Added
Our compensation arrangements, including our equity award programs, are essential to retaining our senior management team and other key employees, but may not always be successful in attracting new employees or retaining and motivating our existing key employees for reasons that may include movement in our stock price or our ability to maintain or increase our equity pool.
Added
Our results of operations may be affected by the conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere in the world.
Added
The war between Russia and Ukraine as well as the conflict between Israel and Hamas have caused uncertainty in the credit markets and could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business.
Added
We face risks related to health epidemics and other outbreaks, including the global outbreak of the novel coronavirus and the disease caused by it, COVID-19. During 2020, the spread of the novel coronavirus led to disruption and volatility in the global capital markets.
Added
If such disruption and volatility recurs, there could be an increase to our cost of capital and an adverse effect on our ability to access the capital markets.
Added
In addition, efforts to contain the COVID-19 pandemic led to implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns.
Added
The extent to which a pandemic, epidemic or outbreak of an infectious disease impacts our operations will depend on future occurrences, which are highly uncertain and cannot be predicted with confidence, including the duration of any outbreak and the actions to contain or treat its impact, among others.
Added
Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility and may detract from our performance to the extent we are exposed to such interest rates and/or volatility. An adjustment in rates would impact our variable rate debt.
Added
If interest rates increase or remain elevated, we could face higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations.
Added
If we are unable to generate sufficient cash flow to service our debt or to fund our other liquidity needs, we could need to restructure or refinance all or a portion of our debt. Any refinancing of indebtedness could be at higher interest rates, thereby resulting in an overall increase in interest expense.
Added
We may need to raise additional capital to grow our business and may not be able to do so on favorable terms, if at all.
Added
We may need to raise additional capital in the future, including to expand our operations and pursue our growth strategies, to respond to competitive pressures, or to meet capital needs in response to operating losses or unanticipated working capital requirements.

Item 2. Properties

Properties — owned and leased real estate

2 edited+3 added−1 removed0 unchanged
Biggest changeItem 2. Properties Currently, we do not own any real estate. Our principal executive offices are located at 400 Water Street, Suite 200, Rochester, Michigan 48307. As of December 31, 2022, we have operating leases for office space in two multitenant facilities. The leases include our headquarters space in Rochester, Michigan and a technical facility in Zagreb, Croatia.
Biggest changeItem 2. Properties Currently, we do not own any real estate. As of December 31, 2023, we have operating leases for office space in four multi-tenant facilities. The leases include office spaces in Waltham, Massachusetts, Clarkston, Michigan, Scottsdale, Arizona, and Zagreb, Croatia. Our principal executive offices are located at 260 Charles Street, Waltham, Massachusetts 02453.
The lease in Rochester, Michigan expires November 30, 2023, with a two-year renewal option through 2025, and has a monthly rent of $6,384 to $6,688. The lease in Zagreb, Croatia expires February 2024 and has a monthly rent of approximately $1,883.
The lease in Waltham, Massachusetts expires July 31, 2026, and has a monthly rent with escalating payments of $5,778 to $6,848. The lease in Clarkston, Michigan expires November 30, 2025, with a three-year renewal option through 2028, and has a monthly rent of $2,445.
Removed
We also had a lease on office space in Cranbury, New Jersey which expired in January 2022; we did not renew this lease. We also lease minor amounts of space in shared space facilities on a month-to-month basis as necessary. Item 3. Legal Proceedings We have no current legal proceedings. Item 4. Mine Safety Disclosures Not applicable.
Added
The lease in Scottsdale, Arizona expires April 30, 2025, and has a monthly rent with escalating payments of $9,304 to $9,727.
Added
The Company entered into a lease for new office space in Zagreb, Croatia on July 1, 2023, which expires on June 30, 2029, but which grants the tenant the option to terminate the lease with 30-day notice before each lease anniversary and has a monthly rent of approximately $3,038.
Added
The former lease in Zagreb, Croatia, with a monthly rent of approximately $1,883 was terminated effective June 30, 2023.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

13 edited+5 added−6 removed11 unchanged
Biggest changeOdence-Ford was Vice President & Deputy General Counsel at Decision Resources Group, a multi-national corporation that provides high value global data solutions, analytics and consulting services to pharmaceutical, biotech, medical device, healthcare provider and payer, and managed care companies. From November 2004 to November 2012, Ms. Odence-Ford was Vice President & Associate General Counsel at CRA International, Inc.
Biggest changeOdence-Ford joined the Company as General Counsel & Chief Compliance Officer in February 2021. From April 2013 to June 2020, Ms. Odence-Ford was Vice President & Deputy General Counsel at Decision Resources Group, a multi-national corporation that provides high value global data solutions, analytics and consulting services to pharmaceutical, biotech, medical device, healthcare provider and payer, and managed care companies.
Febbo Mr. Febbo joined the Company as Chief Executive Officer and as a director in February 2016. Mr. Febbo founded Plexuus, LLC, a payment processing business for medical professionals in September 2015 and remained its Chairman from September 2015 to December 2020. From April 2007 to September 2015, Mr.
Febbo joined the Company as Chief Executive Officer and as a director in February 2016. Mr. Febbo founded Plexuus, LLC, a payment processing business for medical professionals in September 2015 and remained its Chairman from September 2015 to December 2020. From April 2007 to September 2015, Mr.
Silvestro was with Prognos Health, Inc., a healthcare data and analytics company, as its Chief Commercial Officer and, before that, from September 2007 to April 2017, he was with Decision Resources Group, a multi-national corporation that provides high value global data solutions, analytics and consulting services to pharmaceutical, biotech, medical device, healthcare provider and payer, and managed care companies, in various capacities with him last serving as Executive Vice President, Head of Global Sales.
Silvestro was with Prognos Health, Inc., a healthcare data and analytics company, as its Chief Commercial Officer and, before that, from September 2007 to April 2017, he was with Decision Resources Group, a multi-national corporation that provides high value global data solutions, analytics and consulting services to pharmaceutical, biotech, medical device, healthcare provider and payer, and managed care companies, in various capacities with him last serving as Executive Vice President, Head of Global Sales. 20 Marion Odence-Ford Ms.
Febbo, who was then no longer registered with any broker-dealer, accepted a fine of $5,000, a 10-business day suspension from acting as FinOp for any FINRA member and required to requalify by examination for the Series 27 license before again acting in a FinOp capacity. Stephen L. Silvestro Mr.
Febbo, who was then no longer registered with any broker-dealer, accepted a fine of $5,000, a 10-business day suspension from acting as FinOp for any FINRA member and required to requalify by examination for the Series 27 license before again acting in a FinOp capacity. Stephen L. Silvestro Mr. Silvestro was appointed the Company’s President as of October 2023.
Silvestro joined the Company as Chief Commercial Officer on April 29, 2019. Mr. Silvestro was with CCH® Tagetik, a Wolters Kluwer company that provides corporate performance management software solutions for planning, consolidation and reporting, as its Vice President and General Manager from January 2018 until April 2019. From April 2017 to January 2018, Mr.
He joined the Company as Chief Commercial Officer in April 2019. Prior to joining the Company, Mr. Silvestro was with CCH® Tagetik, a Wolters Kluwer company that provides corporate performance management software solutions for planning, consolidation and reporting, as its Vice President and General Manager from January 2018 until April 2019. From April 2017 to January 2018, Mr.
Item 4.1 Information About Our Executive Officers The following information sets forth the names, ages, and positions of our executive officers as of March 10, 2023. Name Age Positions and Offices Held William J. Febbo 54 Chief Executive Officer Stephen L.
Item 4.1 Information About Our Executive Officers The following information sets forth the names, ages, and positions of our executive officers as of April 15, 2024. Name Age Positions and Offices Held William J. Febbo 55 Chief Executive Officer Stephen L.
Stelmakh served as Senior Vice President, Chief Financial Officer and Chief Operating Officer of Otsuka America Pharmaceuticals Inc. (“Otsuka”), a US division of a Japanese global healthcare enterprise, since April 2020.
Edward Stelmakh Mr. Stelmakh joined the Company as Chief Financial Officer and Chief Operating Officer in October 2021. Prior to joining the Company, Mr. Stelmakh served as Senior Vice President, Chief Financial Officer and Chief Operating Officer of Otsuka America Pharmaceuticals Inc. (“Otsuka”), a US division of a Japanese global healthcare enterprise, since April 2020.
Silvestro 45 Chief Commercial Officer Marion Odence-Ford 58 General Counsel and Chief Compliance Officer Edward Stelmakh 57 Chief Financial Officer and Chief Operations Officer Todd Inman 67 Chief Technology Officer Doug Besch 41 Chief Product Officer Set forth below is a brief description of the background and business experience of each of our current executive officers. 14 William J.
Silvestro 46 President Marion Odence-Ford 59 General Counsel and Chief Compliance Officer Edward Stelmakh 58 Chief Financial Officer and Chief Operations Officer Doug Besch 42 Chief Product Officer Theresa Greco 51 Chief Commercial Officer Set forth below is a brief description of the background and business experience of each of our current executive officers. William J. Febbo Mr.
(dba Charles River Associates) (NASDAQ: CRAI), a global consulting firm that offers economic, financial, and strategic expertise to major law firms, corporations, accounting firms, and governments around the world. From May 2004 to November 2004, Ms.
From November 2004 to November 2012, Ms. Odence-Ford was Vice President & Associate General Counsel at CRA International, Inc. (dba Charles River Associates), a global consulting firm that offers economic, financial, and strategic expertise to major law firms, corporations, accounting firms, and governments around the world. From May 2004 to November 2004, Ms.
Febbo currently serves as a director of Modular Medical (NASDAQ: MODD), a development stage medical device company focused on the design, development and eventual commercialization of an innovative insulin pump , and as a director of Augmedix, Inc. (NASDAQ: AUGX), a provider of automated medical documentation and data services. In addition, Mr.
Febbo served as a director of Modular Medical, a publicly traded development stage medical device company focused on the design, development and eventual commercialization of an innovative insulin pump. In addition, Mr.
Stelmakh held a variety of positions of increasing responsibilities at Johnson & Johnson, Sanofi-Aventis, Organon/Schering-Plough and Mylan. Todd Inman Mr. Inman joined the Company on January 1, 2019 as Vice President, Technology and became the Company’s Chief Technology Officer in November 2019. Prior to joining the Company, from May 2017 to December 2018, Mr.
Stelmakh held a variety of positions of increasing responsibilities at Johnson & Johnson, Sanofi-Aventis, Organon/Schering-Plough and Mylan. Doug Besch Dr. Besch joined the Company in May 2021 as SVP Product Strategy & Innovation and became the Company’s Chief Product Officer in October 2022. Prior to joining the Company, from January 2018 to May 2021, Dr.
Odence-Ford worked on the legal teams of Bank of America Corporation/Fleet Boston Financial Corporation (NYSE: BAC) from November 2002 to May 2004, and Akamai Technologies, Inc. (NASDAQ: AKAM) from October 1999 to November 2002. Ms.
Odence-Ford worked on the legal teams of Bank of America Corporation/Fleet Boston Financial Corporation from November 2002 to May 2004, and Akamai Technologies, Inc. from October 1999 to November 2002. Ms. Odence-Ford began her legal career in private practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC, where she advised public and private companies on corporate matters.
Besch holds a PharmD and MBA from Creighton University and practiced as a pharmacist for the Walgreens Boots Alliance corporation from 2007 through 2013. 16 PART II
Besch holds a PharmD and MBA from Creighton University and practiced as a pharmacist for the Walgreens Boots Alliance corporation from 2007 through 2013. Theresa Greco Ms. Greco joined the Company in October 2023 as the Company’s Chief Commercial Officer with the Company’s acquisition of Healthy Offers, Inc. (“Medicx Health”), where Ms. Greco served as its President since August 2022.
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Marion Odence-Ford Ms. Odence-Ford joined the Company as General Counsel & Chief Compliance Officer in February 2021. From April 2013 to June 2020, Ms.
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Febbo currently serves as a director of LifeMD Inc, a publicly traded provider of virtual primary care that offers telemedicine, laboratory and pharmacy services and specialized treatment across more than 200 conditions , and as a director of Augmedix, Inc., a publicly traded provider of automated medical documentation and data services. Previously, Mr.
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Odence-Ford began her legal career in private practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC, where she advised public and private companies on corporate matters. 15 Edward Stelmakh Mr. Stelmakh joined the Company as Chief Financial Officer and Chief Operating Officer on October 11, 2021. Prior to joining the Company, Mr.
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Prior to joining Medicx Health, Ms. Greco was at Prognos Health, Inc., a healthcare data and analytics company, from August 2018 to January 2022 as its Chief Commercial Officer where she led all aspects of product strategy, marketing, sales, and customer delivery. Prior to Prognos, Ms.
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Inman was the Founder and Chief Technology Officer of Meghadata, LLC, a master data management firm, and from July 2016 to December 2017, Mr. Inman was the Founder and Managing Partner of Data Solutions Partners, a data intelligence solutions company. From January 2011 through June 2016, Mr.
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Greco held the Chief Commercial Officer position at MediSpend, a global technology company focused on life sciences compliance solutions. From August 2010 through August 2017, Ms.
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Inman was Director of Data Solutions at Change HealthCare, a healthcare technology and business solutions company, and from 2005 to 2011, Mr. Inman was the Director of Data Integration of Emdeon Business Services, LLC, an information technology and services company. Prior to Emdeon, from 2001 to 2005, Mr.
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Greco was with LexisNexis Healthcare through their acquisition of Health Market Science, where she held a variety of progressive executive positions including in Customer Success, Product Strategy, Commercial Strategy, and Sales that contributed to revenue growth and profitability that yielded a successful exit. Ms.
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Inman was the Director of Clearinghouse Services at WebMD Health Corp and, from 1996 to 2001, he was the Manager of Clearinghouse Operations at Professional Office Systems, a CareFirst subsidiary, providing medical office electronic data interchange services. Doug Besch Dr.
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Greco led the Life Sciences consulting group providing consultation and technology solutions to life sciences companies for master data management at Computer Sciences Corporation from April 2008 to August 2010. Prior to 2008, Ms. Greco held various positions at IQVIA and Pfizer. 21 PART II
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Besch joined the Company on May 24, 2021 as SVP Product Strategy & Innovation and became the Company’s Chief Product Officer in October 2022. Prior to joining the Company, from January 2018 to May 2021, Dr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor the information regarding our equity compensation plans, see PART III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Issuer Purchases of Equity Securities During the three months ended December 31, 2022, we purchased shares of our common stock as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) 10/1/22 - 10/31/22 341,934 $ 14.83 341,934 $ 2,416,111 11/1/22 - 11/30/22 166,350 $ 14.62 166,350 $ 28 12/1/22 - 12/31/22 — $ — — $ 0 (1) On May 17, 2022, we announced that our Board of Directors had authorized the repurchase of up to $20 million of our outstanding common stock.
Biggest changeFor the information regarding our equity compensation plans, see PART III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Issuer Purchases of Equity Securities On March 14, 2023, we announced that our Board of Directors had authorized the repurchase of up to $15 million of our outstanding common stock.
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded under the symbol “OPRX” on the Nasdaq Capital Market. At February 28, 2023, there were approximately 350 shareholders of record of our common stock. We currently intend to retain future earnings for the operation of our business.
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded under the symbol “OPRX” on the Nasdaq Capital Market. At April 12, 2024 , there were approximately 8,453 shareholders of record of our common stock. We currently intend to retain future earnings for the operation of our business.
Under this program, share repurchases may be made from time to time depending on market conditions, share price and availability and other factors at our discretion. This stock repurchase authorization expires on the earlier of May 17 , 2023, or when the repurchase of $20 million of shares of our common stock has been reached.
Under this program, share repurchases may be made from time to time depending on market conditions, share price and availability and other factors at our discretion. During the quarter ended December 31, 2023, no shares were repurchased under the program. As of December 31, 2023, $7,488,116 of shares were available for repurchase under the program.
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In accordance with its terms, the stock repurchase plan terminated as of December 1, 2022. Our stock repurchases may take place in open market transactions or privately negotiated transactions in accordance with applicable securities and other laws. Item 6. Reserved
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This stock repurchase authorization expired on March 12 , 2024. Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn addition, we have continued to expand our team in preparation for future growth aspirations, which may be supplemented with future acquisitions and other strategic collaborations and investments. Our strategy for driving revenue growth is also expected to work in tandem with our efforts to increase margin and profitability using the aforementioned recurring revenue models that have inherently higher margins.
Biggest changeOur strategy for driving revenue growth is also expected to work in tandem with our efforts to increase margin and profitability as revenue drivers such as DAAP have inherently higher margins than most other messaging solutions we offer. 22 Customer Concentration Because the pharmaceutical industry is dominated by large companies with multiple brands, our revenue is concentrated in a relatively small number of companies.
This reporting revenue is recognized over time as the messages are delivered. Program design, which is the design of the content delivery program, and related consulting services are recognized as services are performed. In some instances, we license certain of our software applications in arrangements that do not include other performance obligations.
This reporting revenue is recognized over time as the messages are delivered. Program design, which is the design of the content delivery program, and related consulting services are recognized as services are performed. 29 In some instances, we license certain of our software applications in arrangements that do not include other performance obligations.
We consider the design of the programs and related consulting services to be performance obligations separate from the delivery of messages. 22 As the content is distributed through the platform and network of channel partners (a transaction), these transactions are recorded, and revenue is recognized, over time as the distributions occur.
We consider the design of the programs and related consulting services to be performance obligations separate from the delivery of messages. As the content is distributed through the platform and network of channel partners (a transaction), these transactions are recorded, and revenue is recognized, over time as the distributions occur.
Average revenue per top 20 pharmaceutical manufacturer is calculated by taking the total revenue the company recognized through pharmaceutical manufacturers listed in Fierce Pharma’s “The top 20 pharma companies by 2020 revenue” over the last twelve months, divided by the total number of the aforementioned pharmaceutical manufacturers that our solutions helped support over that time period.
Average revenue per top 20 pharmaceutical manufacturer is calculated by taking the total revenue the company recognized through pharmaceutical manufacturers listed in Fierce Pharma’s “The top 20 pharma companies by 2022 revenue” over the last twelve months, divided by the total number of the aforementioned pharmaceutical manufacturers that our solutions helped support over that time period.
Percent of top 20 pharmaceutical manufacturers that are customers is calculated by taking the number of revenue generating customers that are pharmaceutical manufacturers listed in Fierce Pharma’s “The top 20 pharma companies by 2020 revenue” over the last 12 months, which is then divided by 20—which is the number of pharmaceutical manufacturers included in the aforementioned list.
Percent of top 20 pharmaceutical manufacturers that are customers is calculated by taking the number of revenue generating customers that are pharmaceutical manufacturers listed in Fierce Pharma’s “The top 20 pharma companies by 2022 revenue” over the last 12 months, which is then divided by 20 - which is the number of pharmaceutical manufacturers included in the aforementioned list.
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 2020 revenue” over the last twelve months, divided by our consolidated revenue over the same period.
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 2022 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.
The Company uses this metric to monitor its progress in penetrating 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.
Intangible Assets Intangible assets are stated at cost. Finite-lived assets are being amortized over their estimated useful lives of fifteen to seventeen years for patents, eight years for customer relationships, fifteen years for tradenames, two to four years for covenants not to compete, and three to ten years for software and websites, all using the straight-line method.
Finite-lived assets are being amortized over their estimated useful lives of fifteen to seventeen years for patents, eight years for customer relationships, fifteen years for tradenames, two to four years for covenants not to compete, and three to ten years for software and websites, all using the straight-line method.
Net Income (Loss) We finished the year ended December 31, 2022 with a net loss of $11.4 million, compared to net income of $0.4 million during the year ended December 31, 2021. The reasons for specific components are discussed above. Overall, we had an increase in revenue and gross margin partially offset by increased operating expenses.
Net Income (Loss) We finished the year ended December 31, 2023 with a net loss of $17.6 million, compared to $11.4 million during the year ended December 31, 2022. The reasons for specific components are discussed above. Overall, we had an increase in revenue and gross margin partially offset by increased operating expenses.
Historically, our revenue was generated primarily through the facilitation of financial messages to health care providers via their EHR and ePrescribe systems using the OptimizeRx proprietary network to solve the ever-increasing communication barriers between pharmaceutical representatives and healthcare providers that have presented in the rapidly changing healthcare industry.
Historically, our revenue was generated primarily through the facilitation of various types of messages to health care providers via their EHR systems and ERx platforms using the OptimizeRx proprietary network to solve the ever-increasing communication barriers between pharmaceutical representatives and healthcare providers that have presented in the rapidly changing healthcare industry.
Twelve Months Ended December 31 2022 2021 Percent of top 20 pharmaceutical manufacturers that are customers 90 % 95 % Percent of total revenue attributable to top 20 pharmaceutical manufacturers.
Twelve Months Ended December 31 2023 2022 Percent of top 20 pharmaceutical manufacturers that are customers 90 % 90 % Percent of total revenue attributable to top 20 pharmaceutical manufacturers.
The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions.
The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. See Part II, Item 8.
We do not anticipate the need to raise any additional cash to support operations. However, we could require additional debt or equity financing if we were to make any significant acquisitions for cash during that period. In addition, we believe we can generate the cash needed to operate beyond the next 12 months from operations.
However, we could require additional debt or equity financing if we were to make any significant acquisitions for cash during that period. In addition, we believe we can generate the cash needed to operate beyond the next 12 months from operations.
These steps are: identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the performance obligations are satisfied.
We use a 5-step model to recognize revenue. These steps are: identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the performance obligations are satisfied.
We generally expect these seasonality trends to continue and our ability to effectively manage our resources in anticipation of these trends may affect our operating results. Impact of Macroeconomic Events Unfavorable conditions in the economy may negatively affect the growth of our business and our results of operations.
We generally expect these seasonality trends to continue and our ability to effectively manage our resources in anticipation of these trends may affect our operating results. Impact of Macroeconomic Events Unfavorable conditions in the economy may negatively affect the growth of our business and our results of operations. For example, macroeconomic events including rising inflation and the U.S.
In addition, the income or loss in both periods included significant noncash items. We had $18.0 million in noncash operating expenses in 2022 compared to $7.6 million in noncash operating expenses in 2021. Liquidity and Capital Resources Historically, our primary sources of liquidity have been cash receipts from customers and proceeds from equity offerings.
In addition, the loss in both periods included significant noncash items. We had $25.0 million in noncash operating expenses in 2023 compared to $17.8 million in noncash operating expenses in 2022. Liquidity and Capital Resources Historically, our primary sources of liquidity have been cash receipts from customers and proceeds from equity offerings.
The Company uses this metric to monitor the productivity of its workforce and its ability to scale efficiently over time and believes the metric provides investors with a way to chart our productivity and scalability.
The Company uses this metric to monitor the productivity of its workforce and its ability to scale efficiently over time and believes the metric provides investors with a way to chart our productivity and scalability. Our revenue rate per employee stayed relatively consistent year over year.
The fair value of each award is estimated on the date of each grant. For options, fair value is estimated using the Black-Scholes option pricing model that uses the following assumptions. Estimated volatilities are based on the historical volatility of our stock over the same period as the expected term of the options.
For time-based options, fair value is estimated using the Black-Scholes option pricing model that uses the following assumptions. Estimated volatilities are based on the historical volatility of our stock over the same period as the expected term of the options. The expected term of options granted represents the period of time that options granted are expected to be outstanding.
Key Performance Indicators We monitor the following key performance indicators to help us evaluate our business, measure our performance, identify trends affecting our business and make strategic decisions. Average revenue per top 20 pharmaceutical manufacturer.
Key Performance Indicators We monitor the following key performance indicators to help us evaluate our business, measure our performance, identify trends affecting our business and make strategic decisions.
For example, macroeconomic events including the COVID-19 pandemic, rising inflation and the U.S. Federal Reserve raising interest rates have led to economic uncertainty. In addition, high levels of employee turnover across the pharmaceutical industry as well as fewer number of U.S. drug approvals could create additional certainty within our target customer markets.
Federal Reserve raising interest rates have led to economic uncertainty. In addition, high levels of employee turnover across the pharmaceutical industry as well as a fewer number of U.S. drug approvals could create additional uncertainty within our target customer markets.
Off Balance Sheet Arrangements As of December 31, 2022, there were no off-balance sheet arrangements. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon the Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon the Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
In instances where we sell solutions on a commission basis, net revenue is recognized based on the commission-based revenue split that we receive. There were no programs recorded on a net basis in the years presented.
In instances where we sell solutions on a commission basis, net revenue is recognized based on the commission-based revenue split that we receive.
Twelve Months Ended December 31 2022 2021 Revenue per average full-time employee $ 606,312 $ 729,674 19 Results of Operations for the Years Ended December 31, 2022 and 2021 The following table sets forth, for the periods indicated, the dollar value and percentage of total return represented by certain items in our consolidated statements of operations: Years Ended December 31, (in thousands, except percentage data) 2022 2021 Total Revenue $ 62,450 100.0 % $ 61,293 100.0 % Cost of Revenues 23,483 37.6 % 25,654 41.9 % Gross margin 38,967 62.4 % 35,638 58.1 % Operating expenses 51,258 82.1 % 35,277 57.6 % Income (loss) from operations (12,291 ) (19.7 )% 361 0.6 % Other income 852 1.4 % 17 — % Income (loss) before provision for income taxes (11,438 ) (18.3 )% 378 0.6 % Income tax benefit — — % — — % Net income (loss) $ (11,438 ) (18.3 )% $ 378 0.6 % * Balances and percentage of total revenue information may not add due to rounding Net Revenue Our net revenue increased 2% to $62.5 million for the year ended December 31, 2022 from $61.3 million for the year ended December 31, 2021.
Twelve Months Ended December 31 2023 2022 Revenue per average full-time employee $ 586,242 $ 606,312 24 Results of Operations for the Years Ended December 31, 2023 and 2022 The following table sets forth, for the periods indicated, the dollar value and percentage of total return represented by certain items in our consolidated statements of operations: Years Ended December 31, (in thousands, except percentage data) 2023 2022 Total Revenue $ 71,522 100.0 % $ 62,450 100.0 % Cost of Revenues 28,622 40.0 % 23,483 37.6 % Gross margin 42,900 60.0 % 38,967 62.4 % Operating expenses 69,302 96.9 % 51,258 82.1 % Loss from operations (26,402 ) (36.9 )% (12,291 ) (19.7 )% Other income 1,238 1.7 % 852 1.4 % Loss before provision for income taxes (25,164 ) (35.2 )% (11,438 ) (18.3 )% Income tax benefit 7,598 10.6 % — — % Net loss $ (17,566 ) (24.6 )% $ (11,438 ) (18.3 )% * Balances and percentage of total revenue information may not add due to rounding Net Revenue Our net revenue increased 15% to $71.5 million for the year ended December 31, 2023 from $62.5 million for the year ended December 31, 2022.
Our top five customers represented 39% of our revenue for the year ended December 31, 2022. In each of 2022 and 2021, we had one customer that each represented more than 10% of our revenues. Seasonality In general, the pharmaceutical brand marketing industry experiences seasonal trends that affect the vast majority of participants in the pharmaceutical digital marketing industry.
In each of 2023 and 2022, we had one customer that each represented more than 10% of our revenues. Seasonality In general, the pharmaceutical brand marketing industry experiences seasonal trends that affect the vast majority of participants in the pharmaceutical digital marketing industry.
As of December 31, 2022, we had total current assets of $98.6 million, compared with current liabilities of $8.4 million, resulting in working capital of $90.2 million and a current ratio of 12 to 1. This compares with a working capital balance of $105.7 million and a current ratio of 12 to 1 at December 31, 2021.
As of December 31, 2023, we had total current assets of $54.3 million, compared with current liabilities of $17.9 million, resulting in working capital of $36.4 million and a current ratio of 3.0 to 1. This compares with a working capital balance of $90.2 million and a current ratio of 11.7 to 1 at December 31, 2022.
For market based restricted stock units, fair value is estimated using a Monte Carlo simulation model. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates and dividends. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes .
For market based restricted stock units, fair value is estimated using a Monte Carlo simulation model. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates and dividends.
Treasury yield curve in effect at the time of the grant using a time period equal to the expected option term. We have never paid dividends and do not expect to pay any dividends in the future.
We use historical data to estimate option exercise behavior and to determine this term. The risk-free rate used is based on the U.S. Treasury yield curve in effect at the time of the grant using a time period equal to the expected option term. We have never paid dividends and do not expect to pay any dividends in the future.
Twelve Months Ended December 31 2022 2021 Average revenue per top 20 pharmaceutical manufacturer $ 2,143,296 $ 2,484,557 18 Percent of top 20 pharmaceutical manufacturers that are customers.
Twelve Months Ended December 31 2023 2022 Average revenue per top 20 pharmaceutical manufacturer $ 2,566,832 $ 2,136,746 23 Percent of top 20 pharmaceutical manufacturers that are customers.
Gross Margin Our gross margin, which is the difference between our revenues and our cost of revenues, increased from 2021 to 2022 as a result of solution mix. In general, during 2022, there was an increase in the percentage of activity flowing through our lower cost channels compared with 2021.
Gross Margin Our gross margin, which is the difference between our revenues and our cost of revenues, increased from 2022 to 2023 but our gross margin percentage decreased to 60.0% in 2023 from 62% in 2022 We had higher revenues in 2023, which increased gross margin but during 2023, there was a decrease in the percentage of activity flowing through our lower cost channels compared with 2022.
The Company uses this metric to monitor its progress in penetrating 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. The decrease in 2022 was due to the Company not supporting programs for a smaller revenue customer from 2021 in 2022.
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. Our revenue from customers that aren’t top 20 pharmaceutical manufacturers stayed relatively consistent year over year.
We determined there was no impairment as goodwill had a fair value comfortably in excess of its carrying value. 23 Stock-based Compensation We use the fair value method to account for stock-based compensation. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.
Stock-based Compen sation We use the fair value method to account for stock-based compensation. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered. The fair value of each award is estimated on the date of each grant.
Connecting over 60% of U.S. healthcare providers and millions of their patients through an intelligent technology platform embedded within a proprietary point-of-care network, OptimizeRx helps patients start and stay on their medications.
Connecting over two million U.S. healthcare providers and millions of their patients through an intelligent omnichannel technology platform embedded within a proprietary point-of-care network, as well as mass digital communications channels, OptimizeRx helps life sciences organizations engage and support their customers.
This increase resulted from increases in sales of our access solutions. Cost of Revenues Our total cost of revenues, composed primarily of revenue share expense paid to our network partners, decreased in the year ended December 31, 2022 compared to the year ended December 31, 2021.
Of the 15% increase, 7.3% resulted from the acquisition of Medicx Health, in October, with the remaining increase due to stronger DAAP related sales. Cost of Revenues Our total cost of revenues, composed primarily of revenue-share expense paid to our network partners, increased in the year ended December 31, 2023, compared to the year ended December 31, 2022.
Our cost of revenues as a percentage of revenue decreased to approximately 38% in the year ended December 31, 2022 from approximately 42% in the year ended December 31, 2021.
Our cost of revenues as a percentage of revenue increased to approximately 40% in the year ended December 31, 2023, from approximately 38% in the year ended December 31, 2022. This increase in our cost of revenues as a percentage of revenue resulted primarily due to an unfavorable channel partner mix.
These solutions include brand messaging, therapeutic support messaging, brand support, and innovative patient engagement services, all of which now make up a significant portion of our total revenue. 17 We employ a “land and expand” strategy focused on growing our existing client base and generating greater and more consistent revenues in part through the continued shift in our business model toward enterprise level engagements, while also broadening our platform with innovative proprietary solutions such as our TelaRep™ virtual communication solution and our AI-powered real-world evidence solution which uses sophisticated proprietary algorithms to derive additional revenue from our existing network.
We employ a “land and expand” strategy focused on growing our existing client base and generating greater and more consistent revenues in part through the continued shift in our business model toward enterprise level engagements, while also broadening our platform with innovative proprietary virtual communication solutions such as our AI-powered DAAP, expanding on previous iterations of the RWD.AI technology, which uses sophisticated machine-learning algorithms to find the best audiences in the correct channels at the right time.
See Note 2 to the Consolidated Financial Statements for a discussion of significant accounting policies. Actual results may differ materially from these estimates due to different assumptions or conditions.
Financial Statements and Supplementary Data; Note 2 - Summary of Significant Accounting Policies, for a discussion of significant accounting policies. Actual results may differ materially from these estimates due to different assumptions or conditions. The following areas all require the use of subjective or complex judgments, estimates and assumptions: Business Combination Business combinations are accounted for under the acquisition method.
We had a net loss of $11.4 million for 2022, but non-cash expenses of $18.1 million and working capital generated by the collection of receivables offset the loss. The cash provided in 2021 was the result of our net income and non-cash expenses, which together totaled $8.0 million.
The cash provided in 2022 was the result of our net loss of $11.4 million offset by non-cash expenses of $17.8 million and a decrease in net working capital of $4.0 million, generated by the collection of receivables. Investing activities used $25.3 million in 2023, compared with $58.2 million in 2022.
Because the pharmaceutical industry is dominated by large companies with multiple brands, our revenue is concentrated in a relatively small number of companies. We have approximately 100 pharmaceutical companies as customers, and our revenues are concentrated in these customers. Loss of one of more of our larger customers could have a negative impact on our operating results.
We have approximately 100 pharmaceutical companies as customers, and our revenues are concentrated in these customers. Loss of one of more of our larger customers could have a negative impact on our operating results. Our top five customers represented approximately 44% and 39% of our revenue for the years ended December 31, 2023 and December 31, 2022, respectively.
Over time, as the demand for communication of an increasing variety of different health information between life science companies, providers, and patients continued to rise, our platform has expanded to encompass additional solutions that enable healthcare providers to access information for patients at the point of care.
Over time, as the demand for communication of an increasing variety of different health information between life science companies, providers, and patients continued to rise, our platform has evolved to provide Audience Development and Audience Creation and Media Execution across numerous different messaging types that leverage our technology platform and media distribution channels.
Our revenue from customers that aren’t top 20 pharmaceutical manufacturers increased faster than our overall revenue, decreasing the percentage of our overall revenues from top 20 pharmaceutical manufacturers. Twelve Months Ended December 31 2022 2021 Percent of total revenue attributable to top 20 pharmaceutical manufacturers 62 % 77 % Net revenue retention.
Twelve Months Ended December 31 2023 2022 Percent of total revenue attributable to top 20 pharmaceutical manufacturers 65 % 62 % Net revenue retention.
This decrease in working capital, as discussed in more detail below, is primarily the result of the common stock buyback program.
This decrease in working capital, as discussed in more detail below, is primarily the result of our common stock buyback program and the acquisition of Medicx Health, which was funded from a combination of cash on hand, short-term investments and the Term Loan.
This was partially offset by the payment of contingent consideration related to previous acquisitions of $1.6 million. We believe that funds generated from operations, together with existing cash and short term investments, will be sufficient to finance our current operations and planned growth for the next twelve months.
We believe that funds generated from operations, together with existing cash and cash equivalents, will be sufficient to finance our current operations and planned growth for the next twelve months. We do not anticipate the need to raise any additional cash to support operations.
Operating Expenses Operating expenses increased to $51.3 million for the year ended December 31, 2022, from $35.3 million for the year ended December 31, 2021, an increase of approximately 45%. The increase in sales, general and administrative expense was $5.8 million. The detail by major category is reflected in the table below.
Operating Expenses Total operating expenses increased to $69.3 million for the year ended December 31, 2023, from $51.3 million for the year ended December 31, 2022, an increase of approximately 35%.
Following is a table with summary data from the consolidated statement of cash flows for the years ended December 31, 2022 and 2021, as presented. 2022 2021 Net cash provided by operating activities $ 10,654,078 726,039 Net cash used in investing activities (58,176,386 ) (485,999 ) Net cash (used in) / provided by financing activities (18,950,777 ) 73,924,954 Net (decrease) / increase in cash and cash equivalents $ (66,473,085 ) $ 74,164,994 Our operating activities provided $10.7 million in the year ended December 31, 2022, as compared with approximately $0.7 million provided by operating activities in the year ended December 31, 2021.
(in thousands) 2023 2022 Net cash (used in) / provided by operating activities $ (7,239 ) $ 10,654 Net cash used in investing activities (25,337 ) (58,176 ) Net cash provided / (used in) by financing activities 28,220 (18,951 ) Net decrease in cash and cash equivalents $ (4,356 ) $ (66,473 ) Our operating activities used $7.2 million in the year ended December 31, 2023, as compared with approximately $10.7 million provided by operating activities in the year ended December 31, 2022.
These assets are evaluated when there is a triggering event. There was no impairment of our intangible assets in either year presented. Goodwill We evaluate goodwill for impairment during our fiscal fourth quarter, or more frequently if an event occurs or circumstances change.
Goodwill We evaluate goodwill for impairment during our fiscal fourth quarter, or more frequently if an event occurs or circumstances change. For both the years ended December 31, 2023 and 2022 our annual reviews determined there was no impairment as our single reporting unit had a fair value in excess of its carrying value.
Years Ended December 31 2022 2021 Stock-based compensation $ 15,745,822 $ 5,491,957 Depreciation and amortization 2,022,029 2,086,454 Other sales, general, and administrative expense 33,489,707 27,698,703 Total Operating Expense $ 51,257,558 $ 35,277,114 20 Within the operating expenses, there were a variety of increases, the largest of which was in stock-based compensation, a non-cash expense, which increased by $10.3 million from $5.5 million in 2021 to $15.7 million in 2022.
In addition, within the other sales, general and administrative expenses, there were a variety of increases, the largest of which was in compensation, which increased by $3.3 million from $20.8 million in 2022 to $24.1 million in 2023.
The retention rate in 2022 decreased due to the convergence of numerous macroeconomic factors that resulted in our customers slowing their rate of spend, particularly for large and/or new implementations, which we believe prolonged sales cycles. Twelve Months Ended December 31 2022 2021 Net revenue retention 90 % 127 % Revenue per average full-time employee.
The retention rate in 2023 increased due to stronger DAAP related revenue streams from existing clients and the Company’s 2023 acquisition of Medicx Health. Twelve Months Ended December 31 2023 2022 Net revenue retention 105 % 90 % Revenue per average full-time employee.
Removed
The decrease in the average in 2022 as compared to 2021 is primarily the result of the convergence of numerous macroeconomic factors that resulted in our customers slowing their rate of spend, particularly for large and/or new implementations, which we believe prolonged sales cycles with the top 20 pharmaceutical manufacturers that were existing customers.
Added
In addition, the October 2023 acquisition of Medicx Health provided the Company with a significant footprint for direct-to-consumer healthcare marketing.
Removed
Our revenue rate per employee declined year over year due to slower revenue growth and a higher average number of FTEs over the last 12 month period.
Added
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 2022 revenue”. We previously used “The top 20 pharma companies by 2020 revenue”. As a result of this change, prior periods have been restated for comparative purposes.
Removed
This decrease in our cost of revenues as a percentage of revenue resulted primarily due to favorable solution and channel partner mix and increases in the type of services we provide that are not subject to revenue share.
Added
The increase in the average in 2023 as compared to 2022 is primarily the result of stronger DAAP related revenue streams and the Company’s October 2023 acquisition of Medicx Health, which added to 2023 revenues and was not included in the 2022 amounts.
Removed
Additionally, revenue increases in our access solutions includes a much higher percentage of program design, which carries a higher margin than the delivery of the actual messages. In addition, our gross margin percentage increased to 62% in 2022 from 58% in 2021 for the reasons discussed above in the cost of revenues section.
Added
The increase includes approximately $6.7 million, related to impairment charges, approximately $4.5 million of transaction costs associated with the purchase of Medicx Health, and a loss on the disposal of a business of $2.1 million. The detail by major category is reflected in the table below.
Removed
Stock-based compensation is awarded to all full-time employees upon their start of employment as well as to directors, officers and certain key employees to provide an equity-based incentive to maintain and enhance the performance and profitability of the Company.
Added
Years Ended December 31 (in thousands) 2023 2022 Stock-based compensation $ 13,717 $ 15,746 Depreciation and amortization 2,402 2,022 Impairment charges 6,738 — Loss on disposal of a business 2,142 — Transaction costs 4,482 — Other sales, general, and administrative expense 39,820 33,490 Total operating expense $ 69,302 $ 51,258 Stock-based compensation decreased to $13.7 million for the year ended December 31, 2023, from $15.7 million for the year ended December 31, 2022, as a result of the lower grant date fair value of awards due to declines in the Company’s stock price. 25 Depreciation and amortization increased to $2.4 million for the year ended December 31, 2023, from $2.0 million for the year ended December 31, 2022, as a result of the amortization associated with the identifiable intangibles arising from the Medicx Health acquisition.
Removed
In the fourth quarter of 2021, we issued a significant market-based grant with a requisite service period of less than 3 years. The expense for the market-based award is amortized over the expected service period. The impact on 2022 expense for such market-based award in 2022 was $6.1 million.
Added
The impairment charges recorded during 2023 relate to intangible assets, primarily technology and patent and trademarks relating to certain non-core products. The Company determined that the carrying value of these long-lived assets was not recoverable on an undiscounted basis and accordingly, an impairment charge was recognized to the extent fair value exceeds carrying value.
Removed
The increase in other sales, general, and administrative expense is due to higher salaries, wages, and benefits and other human resources related costs as a result of the expansion of, and investment in, our team to support additional growth. During 2022, we hired 12 net additional employees.
Added
The fair value of the assets was determined based on various estimates and assumptions including internal estimates of cash flows directly attributable to the assets, the useful life of the assets and residual value, if any. The loss on disposal of a business is discussed in Part II, Item 8.
Removed
This was partially offset by the increased working capital, totaling $7.3 million, required to support higher revenues. We used $58.2 million in investing activities in 2022, compared with $0.5 million in 2021. In addition to the $2.0 million investment in EvinceMed technology, we purchased $55.9 million in Treasury bills in 2022 with maturity dates in 2023.
Added
Financials Statements and Supplementary Data; Note 7 - Goodwill and Intangibles. Transaction related costs arose due to the acquisition of Medicx Health, discussed in Part II, Item 8. Financials Statements and Supplementary Data; Note 3 - Acquisitions.
Removed
The 2021 amount included $0.4 million of capitalized software development costs related to our proprietary systems and $0.1 million of tangible property, primarily personal computers. 21 We used $19.0 million in financing activities in the year ended December 31, 2022. We repurchased 1,214,398 shares of common stock for $20.0 million.
Added
Other sales, sales general, and administrative expense increased to $39.8 million for the year ended December 31, 2023 from $33.5 million for the year ended December 31, 2022. The acquisition of Medicx Health increased Operating expense, primarily compensation and amortization, by approximately $2.5 million year on year.
Removed
This was partially offset by the collection of $1.1 million related to the exercise of stock options during the period. The cash provided in 2021 was the result of our underwritten offering in 2021, which generated $70.7 million, as well as from the proceeds of option exercises, which generated $4.9 million.
Added
The increase is due to the addition of Medicx Health employees since the acquisition date and higher severance, employee benefit and commission costs.
Removed
The following areas all require the use of subjective or complex judgments, estimates and assumptions: Revenue Recognition Recognition of revenue requires evidence of a contract, probable collection of proceeds, and completion of substantially all performance obligations. We use a 5-step model to recognize revenue.
Added
Other income (expense) Other Income (Expense) was comprised of the following: Years Ended December 31 (in thousands) 2023 2022 Other income (expense) Interest expense $ (1,454 ) $ — Other income 500 — Interest income 2,192 852 $ 1,238 $ 852 Interest expense represents interest charges on our Term Loan, which was raised during the year to partially fund the acquisition of Medicx Health, together with the amortization of the related issuance costs, (see Part II, Item 8.
Removed
The expected term of options granted represents the period of time that options granted are expected to be outstanding. We use historical data to estimate option exercise behavior and to determine this term. The risk-free rate used is based on the U.S.
Added
Financials Statements and Supplementary Data; Note 12 - Long Term Debt for further details concerning our Term loan). Other income represents the net proceeds from the sale of customer assets, primarily contracts, relating to two non-core products.
Removed
ASU 2019-12 is intended to improve consistent application and simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance. ASU 2019-12 was effective for us as of January 1, 2021.
Added
Interest income represents interest earned on our short-term investments, which were realized during 2023 in order to partially fund the acquisition of Medicx Health.
Removed
The adoption of this standard did not have a material effect on our financial position, results of operations, or cash flows.
Added
Interest earned in 2022 reflects the shorter period and lower average balance on amounts held in short-term investments during that period. 26 Income tax benefit The income tax benefit recorded in 2023 represents the partial reversal of our valuation allowance, previously recorded against the value of our net operating loss (“NOL”) carryforwards.
Removed
Not Yet Adopted ASU Topic 2021-08 Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts.
Added
In evaluating our ability to recover our deferred tax assets, in full or in part, we consider all available positive and negative evidence, including our past operating results, the impact of the Medicx Health transaction on our consolidated tax returns, and our forecast of future earnings, future taxable income and prudent and feasible tax planning strategies.
Removed
The standard is effective for the Company’s fiscal year beginning January 1, 2023, with early adoption permitted. The adoption of this standard is not expected to have a material effect on our financial position, results of operations, or cash flows. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. 24
Added
The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. Actual operating results in future years could differ from our current assumptions, judgments and estimates.
Added
On October 11, 2023, we entered into a financing agreement that provided for a $38 million term loan (the “Term Loan”), the proceeds of which were to fund, in part, the acquisition of Medicx Health. See Part II, Item 8. Financials Statements and Supplementary Data; Note 12 - Long Term Debt.

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