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What changed in OptimizeRx Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OptimizeRx Corp's 2023 and 2024 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 2024 report.

+342 added−234 removedSource: 10-K (2025-03-20) vs 10-K (2024-04-15)

Top changes in OptimizeRx Corp's 2024 10-K

342 paragraphs added · 234 removed · 181 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur 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.
Biggest changeOur competitors include large well-known companies with established names, solid market niches, and wide arrays of product offerings and marketing networks. As innovators in the industry, we have patented and patent-pending technologies that provide unique differentiation, including a patient-centric focus on brand conversion, and value generation for our customers.
Technology To support our growth and provide maximum security, scalability, and flexibility, all of our systems, including from acquisitions, are now hosted and integrated in the cloud. Our technology development and systems management core team is in the U.S. and in Croatia, with contractors in India and Ukraine to provide bench depth, rich skills experience, and business economies.
To support our growth and provide maximum security, scalability, and flexibility, all our systems, including from acquisitions, are now hosted and integrated in the cloud. Our technology development and systems management core team is in the U.S. and in Croatia, with contractors in India and Ukraine to provide bench depth, rich skills experience, and business economies.
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.
As of December 31, 2024, 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.
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.
Over time, the demand for different types of communication and marketing solutions among life sciences organizations, healthcare professionals (HCPs), 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.
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.
As of December 31, 2024, OPTIMIZERx, OPTIMIZEMD, CareSpeak, DIETWATCH, Innovate4Outcomes, SPRx, SPx, RMDY, Specialty Express, TELAREP, Medicx, Micro-Neighborhood, and Geomedical Targeting are our registered trademarks. We also have licenses to intellectual property for the use and sale of certain of our solutions.
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.
Financial Messaging ● Financial Messaging provides prescribers visibility to branded copay offers for patients directly within their EHR systems and eRx platforms. It allows prescribers to print or digitally send copay offer details to the dispensing pharmacy.
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.
In addition, the DEI&B Committee sponsored quarterly events, including “Cultural Café”, “Food Waste Awareness”, “Movement 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.
For 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.
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.
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.
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.
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.
Customers are able to execute traditional marketing campaigns on our proprietary digital point-of-care network, as well as dynamic DTC marketing campaigns that optimize audiences in real time to increase the value of treatment information for HCPs and patients.
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.
The teams are organized into Centers of Excellence focused on Product Domains, Quality Assurance, Information Security, Data Warehousing, Business Intelligence, Platform Services, and Internal Systems Support.
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.
None of our employees are represented by a labor union or collective bargaining agreement with respect to their employment with us. 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.
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.
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 The go-to-market strategy for the business aligns sales and marketing efforts while keeping customer engagement at the core.
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.
Risk Factors for more information on the impact of Government Regulations on OptimizeRx. Human Capital As of December 31, 2024, we had 106 full-time employees and 1 part-time employee in the U.S, as well as 22 full-time employees in Croatia.
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.
Connecting over two million U.S. healthcare providers and millions of their patients through an intelligent technology platform embedded within a proprietary omnichannel network, OptimizeRx helps life sciences organizations engage and support their customers. Business Strategy OptimizeRx is at a pivotal moment in its almost 20-year history.
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.
We conduct our operations through our wholly-owned subsidiaries, Healthy Offers, Inc. (d/b/a Medicx Health or “Medicx Health”), a Nevada corporation, and CareSpeak Communications, d.o.o., a controlled foreign corporation incorporated in Croatia. Our principal executive offices are located at 260 Charles Street Suite 302, Waltham, MA 02453 and our telephone number is (248) 651-6568. Our website address is www.optimizerx.com .
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.
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. Our Diversity, Equity, Inclusion & Belonging Committee (DEI&B) is actively engaged in improving our culture, hiring practices and training.
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.
Our sales and marketing teams work closely together to cultivate customer relationships. 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.
Item 1. Business General OptimizeRx is a digital health technology company enabling care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey.
Item 1. Business General OptimizeRx is a leading healthcare technology company that is redefining how life sciences brands connect with patients and healthcare providers.
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.
According to industry sources, total pharmaceutical industry commercial spend in the United States is $30 billion of which approximately $10 billion is attributable to commercial digital spend. We believe significant opportunity exists to address the unmet needs of life sciences organizations as they relate to digital solutions, including omnichannel access to HCPs, for our customers’ biggest commercial challenges.
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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.
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OptimizeRx is a Nevada corporation and was founded in 2006 in Rochester, Michigan as a healthcare technology company delivering various types of messages, including coupons and co-pays directly to physicians and pharmacists though electronic health record (EHR) systems and ePrescribing (eRx) platforms.
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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.
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By combining artificial intelligence (AI)-driven tools with our original financial messaging solution, we progressively enhanced our original financial messaging solution. Our current AI-enabled Dynamic Audience Activation Platform (DAAP) not only identifies precise HCP audiences, but also estimates which HCPs will see brand eligible patients, and when such brand eligible patients will be seen. After acquiring Healthy Offers, Inc.
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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.
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(d/b/a “Medicx” or “Medicx Health”) in 2023, we expanded our capabilities to include direct-to-consumer (DTC) marketing using our patent-protected Micro-Neighborhood Targeting (MNT) solution. MNT uses de-identified claims data to target not individual patients, but geographies in which eligible patients live, to better target audiences for brand manufacturers - a privacy-centric approach to audience creation.
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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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With the integration of DTC marketing, our life sciences brand customers can now access across our omnichannel network to reach both HCP and patient audiences. Today, we offer diverse tech-enabled marketing solutions using sophisticated machine-learning algorithms to find the best audience in the correct channels at the right time.
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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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Over the past few months, we have completed an extensive review of our business processes, operations, growth plans, capital allocation, strategies and opportunities - with the ultimate goal of assessing how we can best create value for our shareholders.
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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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On March 10, 2025, after a rigorous search and selection process for a new Chief Executive Officer that was conducted by our independent directors with the assistance of a leading executive search firm, we named Stephen L. Silvestro as our Chief Executive Officer. As Mr.
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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.
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Silvestro leads the next phase of the Company’s growth and transformation, many of our business priorities will be the same, such as continuing to focus on customer centricity and delight, operational excellence, disciplined execution, developing stronger relationships with our valued business partners, and expanding our unique value proposition with our top-tier pharma customers.
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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.
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However, going forward, a core aspect of our new value creation strategy will be to drive towards being recognized as a “Rule of 40” company within the next several years such that our combined annual revenue growth rate and EBITDA margin are 40% or higher.
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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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Like other companies aspiring to be a “Rule of 40” company, we understand the need to effectively balance growth with profitability. As we drive towards this ambitious financial goal, we plan to develop a re-occurring revenue component to our business as we look to convert our DAAP customers to a subscription-based model for the data component of our offerings.
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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.
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We believe this will improve our EBITDA margins over time while substantially enhancing the overall predictability of our revenue streams. We also believe this will enhance our ability to scale our business and more thoughtfully plan for profitable growth.
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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.
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While we believe we are executing the right strategy, our Board of Directors and management team understand the need to regularly review our strategy, assess it against a variety of opportunities that may create greater value, and ensure that the strategy we are executing is fully aligned with the best interests of our shareholders. 1 Industry Background Life sciences organizations face a challenging commercial landscape.
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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.
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The life sciences industry is characterized by rapidly advancing science and technologies, intense competition, and a strong emphasis on differentiated products. As a result, life sciences organizations have increasingly turned to technology solutions to support their commercial strategies.
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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.
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These complex challenges include brand visibility to HCPs which is impacted by a competitive drug environment with sales representatives losing time in front of prescribers, augmented by the amount of time the HCPs have to spend in front of computers and in the EHR.
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Further, EHRs do not often communicate with one another, creating interoperability issues resulting in HCPs not having all relevant patient information. In addition, expensive specialty medications are becoming more common and involve more complex diagnosis criteria - factors that contribute to substantial script abandonment by patients.
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Our solutions are designed to address these and other commercial challenges faced by our customers.
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Principal Solutions We offer clear, actionable solutions to the challenges faced by our customers, and our combined HCP and DTC marketing strategies are designed to ensure our customers’ brands are positioned at the right moment and with the right message, always prioritizing the end result: successful brand engagement to reach both HCPs and patients, ultimately resulting in improved patient care.
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Our principal solutions can be summarized as follows: Audience Development: DAAP and MNT ● Dynamic Audience Activation Platform (DAAP) generates dynamic audiences with predictive analytics via machine learning methods. This identifies which potentially qualified patients and which HCPs to actively engage based on the patient’s care journey and disease progression.
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These dynamic audiences provide our manufacturing customers with relevant and timely targets, generating a higher likelihood of impact. ● Micro-Neighborhood Targeting (MNT) creates consumer audiences using a privacy-first process.
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MNT looks for all patients expressing brand eligibility signals (covering more than 90% of the U.S. population), then scores over 35 million 9-digit zip codes based on the concentration of those signals to create a prioritized, yet de-identified audience. Geographies are automatically refreshed and prioritized regularly for maximum marketing relevance and precision.
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Our clients may then activate these audiences through programmatic Demand-Side Platforms (DSPs). Audience Profiling: Profiler ● Our audience profiling solution, Profiler, provides insights into our customers’ target consumers, identifying the most cost effective and engaging channels, partners, and strategies for our customers.
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Audience profiling enables clients to maximize marketing dollars, focusing on channels their targets are most likely to be consuming, and more specifically focusing on the media partners within those channels.
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This is critical to upfront planning as well as periodic analysis to ensure efficient use of marketing budgets. 2 Audience Activation and Media Execution ● Our primary media offering is banner messaging delivered to HCPs. Banner messages include brand messaging, therapeutic support messaging, affordability messaging, HUB awareness, limited distribution drug information, and patient support program messaging.
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We can deliver these in a number of ways via our HCP omnichannel network (EHR systems and eRx platforms), programmatic social media, and programmatic display. ● With the acquisition of Medicx, our omnichannel solutions expanded further to offering media execution solutions to consumer audiences.
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To reach consumer audiences - brand eligible patients - we deliver messages via our consumer omnichannel network including through 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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Pharmacy Alerts ● Pharmacy Alerts improves the existing workflow for prescribing HCPs by informing them in real time about which pharmacies are able to fill a patient’s prescription.
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Currently, HCPs typically see a list of pharmacies near their patients, sorted by proximity, without regard to whether each pharmacy carries the medication or is permitted to fill it (in case of a limited distribution drug).
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Pharmacy Alerts flags pharmacies that have the medication in stock and are able to fill the prescriptions, resulting in less frustration and added work for prescribing physicians, pharmacies and patients and less waiting time to get essential medications to the patients.
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Engaging customers early, providing value throughout their journey, and nurturing long-term relationships drive sustainable growth and retention. Our sales and marketing teams include over 25 individuals focused on awareness, adoption and expansion of data and technology solutions designed to address the digital engagement needs of life sciences brands and their agency partners.
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DAAP, our patent pending patient-centric omnichannel engagement platform combines artificial intelligence (AI) and human intelligence (HI), to determine the optimal time to engage patients and physicians. We synchronize HCP and DTC marketing across the programmatic and point-of-care channels to increase brand conversions, streamline therapy starts, and build stronger brand relationships.
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Technology Our proprietary technology platform enables us to curate privacy safe DTC audiences, dynamic HCP and DTC audiences, and effectively manage digital media campaigns for our advertiser clients (agencies, and manufacturer/brands) across our channel partner network. Our platform consists of a unified data intelligence technology stack, multiple cloud-based data warehouses, and in-house applications and application programming interface layers.
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Collectively, this platform enables us with a collaborative environment for data engineering, data science, and machine learning, an efficient method to curate privacy safe DTC audiences, and a scalable means to manage both point-of-care media campaigns and the supply-side inventory request volume.
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For the management of point-of-care media campaigns, the platform integrates advanced features of a Supply-Side Platform (SSP), allowing us to provide seamless access to an expansive range of point-of-care inventory via our strategic partnerships. As an SSP, our platform enables us to manage and optimize our point-of-care network’s ad inventory, maximizing their revenue.
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On the demand side, our platform empowers our account and program managers to efficiently manage our customers’ campaign(s). Our technology is built on a scalable and secure architecture that supports high-performance data processing, real-time decisioning, and integration with third-party data providers.
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System enhancements in 2024 included system and framework upgrades, documentation of processes and procedures, security implementation for ongoing cybersecurity, Sarbanes Oxley, HIPAA, and customer security assessments, and in achieving both System and Organization Controls (SOC) 2 Type 1 and Type 2 certifications. 3 Competition The competitive landscape within life sciences digital marketing is constantly evolving.
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Our solutions face competition from numerous other companies.
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We compete broadly in the dynamic and ever-evolving pharmaceutical and life sciences digital marketing industry with healthcare data suppliers, health-focused demand-side platforms, and health-focused walled garden websites and web platforms, and advertising networks that aggregate traffic from multiple web sites or point-of-care platforms such as telehealth, EHR, eRx, physician practice management, health information exchanges (HIE), and site-based platforms within large health systems.
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Our extensive point-of-care network provides our customers with unparalleled reach to relevant prescribers. We are uniquely able to use DAAP to produce targeted, privacy-safe audiences for both consumers and their treating HCPs, allowing brand engagement to occur within the likely care window to find brand-eligible patients at the right time for brand adoption.
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DAAP leverages the investment in data and AI technologies, combined with human intelligence, in applying brand-specific strategies to optimize program performance. Our patented MNT technology provides a unique opportunity for pharmaceutical brands to market to consumers while adhering to HIPAA and state level privacy requirements. For more information on risks relating to our competition, see Item 1A. Risk Factors.
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Many states have enacted laws regulating the processing of personal information which may reduce demand for placing digital ads in general, especially when those ads relate to medications, medical products, or health conditions.
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Although our solutions address these laws by using publicly available information and by processing de-identified and aggregated information, and we use this data to target geographies rather than individuals, our customers and partners in the advertising industry remain subject to these regulatory pressures and may not process personal information in this same way.
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We consider our relationship with our employees to be good and have not experienced any work stoppages. We are dedicated to providing a supportive and respectful environment for our employees where everyone feels valued, and we celebrate both the differences and similarities among our people.
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Smaller Reporting Company We are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
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As a result, we may take advantage of certain reduced disclosure obligations available to smaller reporting companies, including the exemption from compliance with the auditor attestation requirements pursuant to the Sarbanes-Oxley Act of 2022, reduced disclosure about our executive compensation arrangements and the requirements to provide only two years of audited financial statements in our annual reports and registration statements.
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We will continue to be a “smaller reporting company” as long as (1) we have a public float (i.e., the market value of our American Depositary Shares held by non-affiliates) less than $250 million calculated as of the last business day of our most recently completed second fiscal quarter, or (2) our annual revenues are less than $100 million for our previous fiscal year and we have either no public float or a public float of less than $700 million as of the end of that fiscal year’s second fiscal quarter.
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Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects. Corporate Information On January 31, 2006, Optimizer Systems, L.L.C. was formed in the State of Michigan and, on October 16, 2007, OptimizeRx Corporation was separately incorporated in Michigan.
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On October 22, 2007, Optimizer Systems, LLC merged into OptimizeRx Corporation, a Michigan corporation, and the name OptimizeRx Corporation remained unchanged following the merger.
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On April 14, 2008, an alternative reporting company with the OTC Market Group, Inc., known at the time as RFID Ltd., and formed in the State of Colorado, entered into a share exchange agreement with the stockholders of OptimizeRx Corporation, pursuant to which the stockholders of OptimizeRx Corporation exchanged all of the issued and outstanding capital stock of OptimizeRx Corporation for shares of common stock of RFID Ltd.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+72 added−9 removed67 unchanged
Biggest changeIn addition, our bylaws provide that shareholders cannot act by written consent and that directors may be removed by shareholders only with the approval of the holders of not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote at an annual or special meeting of the shareholders.
Biggest changeIn addition, our bylaws require shareholders to provide proper and timely advance notice of their intent to bring director nominations or other business before an annual meeting of shareholders, provide that the Company’s secretary is only required to call shareholder requested special meetings upon the written request of shareholders who together own of record not less than 50.1% of the capital stock of the Company issued and outstanding and entitled to vote at such meeting, shareholders cannot act by written consent and that directors may be removed by shareholders only with the approval of the holders of not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote at an annual or special meeting of the shareholders. 15 Nevada has a business combination law (NRS §78.411 through §78.444, inclusive) which prohibits certain business combinations between certain Nevada corporations and any person deemed to be an “interested stockholders” for two years after the “interested stockholder” first becomes an “interested stockholder,” unless our Board approves the combination in advance or thereafter by both the Board and 60% of the disinterested stockholders.
For example, use of our solutions and services could be affected by: ● A decrease in the number of new drugs or medical devices coming to market; and ● A decrease in marketing expenditures by pharmaceutical or medical device companies. The healthcare industry has changed significantly in recent years and we expect that significant changes will continue to occur.
For example, the use of our solutions and services could be affected by: ● A decrease in the number of new drugs or medical devices coming to market; and ● A decrease in marketing expenditures by pharmaceutical or medical device companies. The healthcare industry has changed significantly in recent years, and we expect that significant changes will continue to occur.
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.
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.
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.
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.
Such 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.
Such arrangements subject us to a number of risks, including the following: ● Our eRx and EHR channel 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 channel partners and may lead to lengthy and expensive litigation or arbitration; ● Significant changes in an eRx and/or EHR channel partner’s business strategy may adversely affect such partner’s willingness or ability to satisfy obligations under any such arrangement; ● An eRx and EHR channel 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 channel 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.
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.
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 anticipated 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.
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.
There can be no assurance that the revenue opportunities from any new or updated technologies, applications, features or services will justify the amounts spent. 6 Any failure to offer high-quality customer support for our solutions may adversely affect our relationships with our customers and harm our financial results.
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.
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. 7 If we fail to attract new customers or retain and expand existing customers, our business and future prospects may be materially and adversely impacted.
Many of our competitors have greater financial, technical, product development, marketing and other resources than we do. These organizations may be better known than we are and have more customers or users than we do. We cannot provide assurance that we will be able to compete successfully against these organizations or any alliances they have formed or may form.
Many of our competitors have greater financial, technical, product development, marketing and other resources than we do. These organizations may be better known than we are and have more customers than we do. We cannot provide assurance that we will be able to compete successfully against these organizations or any alliances they have formed or may form.
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.
The ongoing 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.
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
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.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties, and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business. 7 We also may be bound by contractual obligations and other obligations relating to privacy, data protection, and information security that are more stringent than applicable laws and regulations.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties, and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business. 8 We also may be bound by contractual obligations and other obligations relating to privacy, data protection, and information security that are more stringent than applicable laws and regulations.
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.
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. Developments in the healthcare industry could adversely affect our business.
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.
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 the specific market segments that we serve now or may serve in the future.
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 manufacturers as customers, and our revenues are concentrated in these customers. Loss of one or more of our larger customers could have a negative impact on our operating results.
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 over 100 pharmaceutical manufacturers as customers, and our revenues are concentrated in these customers. Loss of one or more of our larger customers could have a negative impact on our operating results.
However, the timing and impact of developments in the healthcare industry are difficult to predict. We cannot assure you that the demands for our solutions and services will continue to exist at current levels or that we will have adequate technical, financial and marketing resources to react to changes in the healthcare industry.
However, the timing and impact of developments in the healthcare industry are difficult to predict. We cannot assure you that the demand for our solutions and services will continue to exist at current levels or that we will have adequate technical, financial and marketing resources to react to changes in the healthcare industry.
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.
Our Term Loan 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.
Our agreements with our ERx and EHR channel partners provide for revenue-sharing payments to them based on the revenue we generate through their platforms and systems. These payments are subject to audit by our channel partners, at their cost, and if there is a dispute as to the calculation, we may be liable for additional payments.
Our agreements with our eRx and EHR channel partners provide for revenue-sharing payments to them based on the revenue we generate through their platforms and systems. These payments could be subject to an audit by our channel partners, at their cost, and if there is a dispute as to the calculation, we may be liable for additional payments.
“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.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operation of the Years Ended December 31, 2024 and 2023 - Operating Expenses.” Market conditions could adversely change and our earnings could decline resulting in charges to impair intangible assets, such as goodwill.
Achieving growth in our customer base may require us to engage in increasingly sophisticated and costly sales and marketing efforts that may not result in additional customers. We may also need to modify our pricing model to attract and retain such customers.
Achieving growth in our customer base may require us to engage in increasingly sophisticated and costly sales and marketing efforts that may not result in additional customers. We may also need to modify our solution set and/or pricing model to attract and retain such customers.
Actual or perceived failures to comply with applicable laws and regulations that affect the healthcare industry, including data protection, privacy and security, fraud and abuse laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
Risks Related to Regulatory Matters Actual or perceived failures to comply with applicable laws and regulations that affect the healthcare industry, including data protection, privacy and security, fraud and abuse laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
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.
In addition, macroeconomic effects such as changes in interest rates, potential tariffs, 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 services.
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.
Our ability to comply with the covenants and restrictions contained in our Term Loan, 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.
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.
These covenants could affect our ability to operate our business, increase the amount of interest expense we ultimately pay pursuant to the Term Loan, and may limit our ability to take advantage of potential business opportunities as they arise.
Anti-takeover provisions in Nevada law and our charter and bylaws could make it more difficult for a third party to acquire control of us. These provisions could adversely affect the market price of the common stock and could reduce the amount that shareholders might receive if the Company is sold.
Anti-takeover provisions in Nevada law and our articles of incorporation and Third Amended and Restated Bylaws (our “bylaws”) could make it more difficult for a third-party to acquire control of us. These provisions could adversely affect the market price of the common stock and could reduce the amount that shareholders might receive if the Company is sold.
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.
Upon an event of default, unless waived, the lenders could elect to terminate their commitments, cease making further loans, cause their loans to become due and payable in full, foreclose against any assets securing the debt under our Term Loan and force us and our subsidiaries into bankruptcy or liquidation.
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.
As circumstances after an acquisition can change, we may not realize the value of these intangible assets. During the year ended December 31, 2024 , we recorded impairment charges, related to goodwill, of approximately $7.5 million .
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.
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.
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.
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.
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.
As a result of our various acquisitions, the consolidated balance sheet at December 31, 2024 contains goodwill of approximately $70.9 million and intangible assets, net of approximately $45.5 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.
In particular, if our customers are acquired by entities that are not also our customers, that do not use our solutions or that have more favorable contract terms with competitors and choose to discontinue, reduce or change the terms of their use of our solutions, our business and operating results could be materially and adversely affected. 6 If we are unable to maintain our contracts with electronic prescription platforms, our business will suffer.
In particular, if our customers are acquired by entities that are not also our customers, that do not use our solutions or that have more favorable contract terms with competitors and choose to discontinue, reduce or change the terms of their use of our solutions, our business and operating results could be materially and adversely affected.
If we are unable to manage growth, our operations could be adversely affected. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage personnel. There can be no assurance that management will be able to manage growth effectively.
Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage personnel. There can be no assurance that management will be able to manage growth effectively.
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.
If we are unable to maintain our contracts with electronic prescription platforms and electronic health record systems, our business will suffer. 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.
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.
Our top five customers represented approximately 49% of revenue for the year ended December 31, 2024. In 2024 and 2023, respectively, we had two customers and one customer that represented over 10% of our revenues.
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.
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.
Any failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality support, could harm our reputation, adversely affect our ability to maintain existing customers or sell our solutions to existing and prospective customers, and harm our business, operating results and financial condition.
Any failure to maintain high-quality and responsive customer support, or a market perception that we do not maintain high-quality support, could harm our reputation, cause us to lose customers, adversely affect our ability to sell our solutions to prospective customers, and harm our business, operating results and financial condition. We are dependent on a concentrated group of customers.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. For further discussion of the material weaknesses, see Item 9A, Controls and Procedures.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
We are prepared to take steps to modify our business practices and mitigate the impact of the emergence and spread of new variants and resurgences, or another pandemic or epidemic; however, there can be no assurance that such steps will be successful, or that our business operations, or the operations of our customers or partners will not be materially and adversely affected by the consequences of such pandemic or epidemic, which could materially impact our results of operations, cash flows, and financial condition.
We are prepared to take steps to modify our business practices and mitigate the impact of the emergence and spread of new variants and resurgences, or another pandemic or epidemic; however, there can be no assurance that such steps will be successful, or that our business operations, or the operations of our customers or partners will not be materially and adversely affected by the consequences of such pandemic or epidemic, which could materially impact our results of operations, cash flows, and financial condition. 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.
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.
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.
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.
See Part II, Item 9A. “Controls and Procedures.” We generated 57.3% and 55.9% of our revenue through our two largest channel partners in 2024 and 2023, respectively. As such, the inability to maintain these relationships could adversely impact our business. Our agreements with eRx and EHR channel partners could be subject to audit.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal information, including health-related information.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal information. In addition, our customers and service providers may be or become subject to these same rules.
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.
If we do not achieve sustainable profitability, it may impact our ability to continue our operations. 5 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.
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.
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. Risks Related to Our Business: Our Industry, Operations, and Competition Seasonal trends in the pharmaceutical brand marketing industry could affect our operating results.
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.
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.
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.
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.
There is no assurance that we will be able to refinance any of our indebtedness on favorable terms, or at all.
There is no assurance that we will be able to refinance any of our indebtedness on favorable terms, or at all. Any inability to generate sufficient cash flow or refinance our indebtedness on favorable terms could have an adverse effect on our financial condition.
We cannot guarantee that any of the systems, procedures and controls we put in place will be adequate to support the commercialization of our operations. Our operating results will depend substantially on the ability of our officers and key employees to manage changing business conditions and to implement and improve our financial, administrative and other resources.
Our operating results will depend substantially on the ability of our officers and key employees to manage changing business conditions and to implement and improve our financial, administrative and other resources.
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.
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.
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.
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. 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.
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.
If we are unable to engage, incentivize, and retain the necessary personnel, our business may be materially and adversely affected. The impact and effects of public health crises, pandemics and epidemics could have a material adverse effect on our business, prospects, financial condition, and operating results.
Item 1A. Risk Factors Risks Relating to Our Business Because we have historically experienced losses, if we are unable to achieve profitability, our financial condition and company could suffer. With the exception of 2021, we have historically incurred losses as a result of investing in future growth.
Item 1A. Risk Factors Risks Related to Our Financial Position We have a history of losses, and may not be able to achieve profitability, or, if achieved, sustain profitability. With the exception of 2021, we have historically incurred losses as a result of investing in future growth.
If we fail to attract new customers or fail to maintain or expand existing relationships in a cost-effective manner, our business and future prospects may be materially and adversely impacted.
If we fail to attract new customers or fail to maintain or expand existing relationships in a cost-effective manner, our business and future prospects may be materially and adversely impacted. 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.
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.
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.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, our management is required to report on the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.
The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Annually, we perform activities that include reviewing, documenting and testing our internal control over financial reporting.
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.
For example, our strategic shift away from non-core business, in 2023, resulted in an impairment of one or more of our long-lived assets and, in 2024, a decline in our stock price and overall market capitalization resulted in goodwill impairment. See Part II, Item 7.
As a result, the first quarter tends to reflect lower activity levels and lower revenue, with gradual increases in the following quarters.
As a result, the first quarter tends to reflect lower activity levels and lower revenue, with gradual increases in the following quarters. 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.
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.
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. Geopolitical events may affect our business and our customer base and have a material adverse impact on our sales and operating results.
We may be unable to support our technology to further scale our operations successfully. Our plan is to grow through further integration of our technology in electronic platforms. Our growth will place significant demands on our management and technology development, as well as our financial, administrative and other resources.
Our growth will place significant demands on our management and technology development, as well as our financial, administrative and other resources. We cannot guarantee that any of the systems, procedures and controls we put in place will be adequate to support the commercialization of our operations.
Risks Related to Being a Public Company We have identified a material weakness in our internal control over financial reporting. Failure to remediate the material weakness or any other material weaknesses that we identify in the future could result in material misstatements in our financial statements.
Failure to remediate the material weakness or any other material weaknesses that we identify in the future could result in material misstatements in our future financial statements. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, our management is required to report on the effectiveness of our internal control over financial reporting.
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.
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. Inflation, the current interest rate environment, and other adverse economic conditions may adversely affect our business, results of operations and financial condition.
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.
General Risk Factors Our business and growth may suffer if we are unable to attract and retain members of our senior management team and other key employees.
There is no guarantee that our common stock will appreciate in value or even maintain the price at which it is purchased. Anti-takeover provisions may make it more difficult for a third party to acquire control of us, even if the change in control would be beneficial to shareholders. The Company is a Nevada corporation.
There is no guarantee that our common stock will appreciate in value or even maintain the price at which it is purchased. Certain provision of our articles of incorporation, bylaws and Nevada law may discourage takeover attempts and business combinations that shareholders might consider in their best interests. The Company is a Nevada corporation.
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.
Risks Related to Inflation, Interest Rates, and Other Adverse Economic Conditions Interest rate increases may adversely affect our financial condition and results of operations. Borrowings under our Term Loan are at variable rates of interest and expose us to interest rate risk.
Our ability to achieve consistent profitability depends on our ability to generate sales through our technology platform and advertising model, while maintaining reasonable expense levels. If we do not achieve sustainable profitability, it may impact our ability to continue our operations. Seasonal trends in the pharmaceutical brand marketing industry could affect our operating results.
While we have increased revenues, we have not yet consistently achieved profitability due to these investments and non-cash expenses. Our ability to achieve consistent profitability depends on our ability to generate sales through our technology platform and advertising model, while maintaining reasonable expense levels.
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.
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 Impairment charges for goodwill or other long-lived assets may need to be recognized or increased as we shift our focus away from our non-core businesses, lose a major customer or experience changes to the regulatory environment affecting pharmaceutical advertising restricting the use of our technology.
Once our solutions are implemented, our customers use our support organization to resolve technical issues relating to our solutions. In addition, we also believe that our success in selling our solutions is highly dependent on our business reputation and on favorable recommendations from our existing customers.
Further, the sale of our solutions is highly dependent on the ease of use of our solutions, on our business reputation, and on favorable recommendations from our existing customers.
We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services. Increased customer demand for these services, without corresponding revenues, could also increase costs and adversely affect our operating results. We are dependent on a concentrated group of customers.
Once our solutions are implemented, our customers use our support organization to resolve technical issues relating to our solutions. Increased demand for our support services may increase our costs without corresponding revenue, which could adversely affect our operating results.
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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.
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Restrictions in our Term Loan could adversely affect our business, financial condition, results of operations, ability to make distributions, and the value of our securities.
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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.
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We compete for revenue from healthcare advertisers and sponsors (pharmaceutical manufacturers) with healthcare data suppliers, health-focused demand-side platforms, and health-focused walled garden websites and web platforms, and advertising networks that aggregate traffic from multiple web sites or point-of-care platforms such as telehealth, EHR, eRx, physician practice management, health information exchanges (HIE), site-based platforms within large health systems, etc.
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We compete for users with online services and websites that provide savings on medications and healthcare products, including both commercial sites and not-for-profit sites.
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Additionally, even if we do not act as a Covered Entity or Business Associate, we process data that has been de-identified according to the expert determination method under HIPAA’s Privacy Rule. This requires us to take measures to prevent the re-identification of that data and to comply with HIPAA if that data is re-identified.
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We compete for advertisers and sponsors with health-related web sites, general purpose consumer web sites that offer specialized health sub-channels, other high-traffic web sites that include both healthcare-related and non-healthcare-related content and services, search engines that provide specialized health searches, and advertising networks that aggregate traffic from multiple sites.
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In the ordinary course of our business, we collect and store sensitive data, including intellectual property, proprietary business information and personally identifiable information (including of our employees, customers, suppliers and business partners).
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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.
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Any data breach may subject us to civil fines and penalties, or regulatory orders, fines or sanctions under relevant state and federal privacy laws in the United States, including the California Consumer Privacy Act (“CCPA”) and other laws and regulations.
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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.
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Our failure, or the failure of our third-party vendors, to comply with applicable laws and regulations relating to data security and our involvement or the involvement of any of our third-party vendors in any data security incidents could result in legal claims and liability, obligations to report incidents to governmental agencies, regulatory investigations and penalties, and reputational damage, which could have a material adverse effect on our business, financial condition and results of operations.
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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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also maintain technical errors and omissions insurance which includes a cyber incident endorsement of up to $20 million with a premium of $60,700. This endorsement provides coverage for Network Security and Privacy, Privacy Regulation Proceeding, Privacy Event Expense Reimbursement, Extortion Demand Reimbursement, Data Restoration, Network Restoration, Business Interruption and System Failure.
Biggest changeThis endorsement provides coverage for Network Security and Privacy, Privacy Regulation Proceeding, Privacy Event Expense Reimbursement, Extortion Demand Reimbursement, Data Restoration, Network Restoration, Business Interruption and System Failure. This coverage reimburses the most common costs for information security incidents, including attorney’s fees, consumer notification costs, and regulatory fines.
The VP of Information Security is responsible for hiring appropriate personnel, performing vendor risk assessments, and communicating information security priorities to relevant personnel, so that we can build cybersecurity risk considerations into our business practices. The VP of Information Security also plans related budgets, designs cybersecurity processes, and reviews security assessments and related reports.
The VP of Information Security is responsible for hiring appropriate personnel, performing vendor risk assessments, and communicating information security priorities to relevant personnel, so that we can build cybersecurity risk considerations into our business practices. The VP of Information Security also plans related budgets, designs cybersecurity processes, and reviews security assessments and related reports. 19
Cybersecurity Risk Management and Strategy Our information security and risk management program is designed to identify, assess, and manage material risks from cybersecurity threats to our applications, computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, personal information, or PHI (collectively, “Information Systems”).
Cybersecurity Risk Management and Strategy Our information security and risk management program is designed to identify, assess, and manage material risks from cybersecurity threats to our applications, computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, personal information, or protected health information (PHI) (collectively, “Information Systems”).
Our information security program’s basis is a comprehensive set of policies and procedures covering various information security domains (collectively, “Information Security Policies”), including, but not limited to: ● Access control, ● Endpoint protection, ● Third-party oversight, ● Education, training, and awareness, ● Network security, ● Risk management, ● Incident response, ● Business continuity and disaster recovery, ● Data protection and privacy, and ● Other security domains.
Our information security program’s basis is a comprehensive set of policies and procedures covering various information security domains (collectively, “Information Security Policy”), including, but not limited to: ● Access control, ● Endpoint protection, ● Third-party oversight, ● Education, training, and awareness, ● Network security, ● Risk management, ● Incident response, ● Business continuity and disaster recovery, ● Data protection and privacy, and ● Other security domains.
The Board of Directors has three members with skills and experience in information security and cybersecurity through their experience as current and former executives of digital technology companies.
Governance The Board of Directors’ oversight function includes cybersecurity risk management. The Board of Directors has three members with skills and experience in information security and cybersecurity through their experience as current and former executives of digital technology companies.
Our risk management process is based on a standard methodology, and risks are identified based on: ● Annual risk assessments, ● Information on past incidents, ● Internal audits, ● Security penetration tests, and ● Other security assessments. All risks are documented in a central Risk Register and tracked for mitigation and other treatment decisions.
Our risk management process is based on a standard methodology, and risks are identified based on: ● Annual risk assessments, ● Information on past incidents, ● Internal audits, ● Security penetration tests, and ● Other security assessments.
From a cybersecurity perspective, this data was stored on secure AWS managed servers in the contiguous United States and encrypted at rest and in transit. End users did not have permission to access PHI unless the end user’s account had the proper end user role permissions (ie HCPs or hub service providers).
In 2024 we stored certain PHI on behalf of customers on secure AWS managed servers in the contiguous United States, encrypted at rest and in transit. End users did not have permission to access PHI unless the end user’s account had the proper end user role permissions (e.g., HCPs or hub service providers).
In appropriate cases, we will seek enhanced contractual obligations or guarantees related to cybersecurity on the service provider. Vendor risk assessments are performed before each vendor is engaged, and annual reviews are conducted to ensure vendors continue to meet security requirements.
In appropriate cases, we will seek enhanced contractual obligations or guarantees related to cybersecurity on the service provider. Vendor risk assessments are performed before each vendor is engaged, and annual reviews are conducted to ensure vendors continue to meet security requirements. We also maintain technical errors and omissions insurance which includes a cyber incident endorsement of up to $20 million.
“Risk Factors”. 18 Governance The Board of Directors’ oversight function includes cybersecurity risk management. The Board of Directors has tasked the Audit Committee with overseeing the Company’s cybersecurity risk management processes and with determining which threats are likely to impact the Company’s strategy, business operations, and financial condition.
The Board of Directors has tasked the Audit Committee with overseeing the Company’s cybersecurity risk management processes and determining which threats are likely to impact the Company’s strategy, business operations, and financial condition. Pursuant to its charter, the Audit Committee of the Board of Directors reviews the Company’s policies regarding information technology security and protection from cyber risks.
The Company’s VP of Information Security is responsible for implementing Information Security Policies on a day-to-day basis along with the Security Team (as defined in the Information Security Policies), which includes the VP of Information Security, the Chief Product Officer, the VP of Data Engineering and Platform Services, and the VP of Technology (Information Technology).
The Company’s VP of Information Security is responsible for implementing the Information Security Policy on a day-to-day basis along with the Security Committee (as defined in the Information Security Policy), which includes the heads of the following departments, at a minimum: Information Security, Technology, Compliance, Product Management, Internal Audit, and Legal.
Our cybersecurity risk assessment and management processes are implemented and maintained by our VP of Information Security and the Security Team. For strategic decisions regarding cybersecurity, the VP of Information Security consults with the Chief Product Officer, the Chief Financial Officer, the General Counsel and Chief Compliance Officer, and the VP of Compliance.
For strategic decisions regarding cybersecurity, the VP of Information Security consults with the Chief Technology Officer, the Chief Financial Officer, the Chief Legal Officer, and the VP of Compliance.
We are currently working towards a SOC 2 audit and assessment, which has more general applicability and covers the trust services criteria of security, confidentiality, privacy, accessibility, and processing integrity. 17 In 2023 , we stored and processed certain PHI on behalf of customers.
In 2024, we allowed our HITRUST certification to lapse and we replaced it with System and Organization Controls (SOC) 2 assessment, which has more general applicability and covers the trust services criteria of security, confidentiality, privacy, and accessibility.
Our information security program is audited annually against a well-known security framework, by an accredited third party. We currently carry a HITRUST certification, which is a security assessment that targets the healthcare industry and HIPAA compliance.
All risks are documented in a central Risk Register and tracked for mitigation and other treatment decisions. 18 Our information security program is audited annually against a well-known security framework, by an accredited third-party.
This coverage reimburses the most common costs for information security incidents, including attorney’s fees, consumer notification costs, and regulatory fines. The Company has no material incidents to report through the date of this filing. For more information on risks from cybersecurity threats that may materially affect the Company, see Item 1A.
To our knowledge, during 2024, there were no material cybersecurity incidents or threats that materially affected or are reasonably likely to materially affect the Company’s business strategy, results of operations, or financial condition. For more information on risks from cybersecurity threats that may materially affect the Company, see Item 1A. “Risk Factors”.
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In late 2023 , we discontinued PHI processing; however, certain PHI remains stored on the secure AWS managed servers to the extent information needs to be accessed by a customer.
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In particular, the Audit Committee reviews with management the Company’s key IT Systems and evaluates the adequacy of the Company’s information security program, compliance, and controls. Our cybersecurity risk assessment and management processes are implemented and maintained by our VP of Information Security and the Security Committee.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeItem 2. Properties Currently, we do not own any real estate. As of December 31, 2024, 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 Scottsdale, Arizona expires April 30, 2025, and has a monthly rent with escalating payments of $9,304 to $9,727.
The lease in Scottsdale, Arizona expires April 30, 2025, and has a monthly base rent with escalating payments of $9,304 to $9,727.
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.
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 $3,111.
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On February 19, 2025, the Company entered into a new lease in Scottsdale, Arizona with the current landlord for reduced space and monthly rent, with escalating payments of $7,870 to $8,453 over three years, expiring on July 31, 2028.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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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.
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.
Besch was the Vice President over Payor and Market Access Solutions for Clarivate (previously Decision Resources Group (DRG)), 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. Prior to Clarivate, from January 2012 to June 2017, Dr.
Prior to joining the Company, from January 2018 to May 2021, Dr. Besch was the Vice President over Payor and Market Access Solutions for Clarivate (previously Decision Resources Group (DRG)), 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.
Besch was a co-founder and the Chief Product Officer for Rx Savings Solution, a company which helps members and payers reduce prescription drug costs through a combination of clinical technology, transparency, member engagement and concierge support . Dr.
Prior to Clarivate, from January 2012 to June 2017, Dr. Besch was a co-founder and the Chief Product Officer for Rx Savings Solution, a company which helps members and payers reduce prescription drug costs through a combination of clinical technology, transparency, member engagement and concierge support . Dr.
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.
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.
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.
Stelmakh held a variety of positions of increasing responsibilities at Johnson & Johnson, Sanofi-Aventis, Organon/Schering-Plough and Mylan. Doug Besch Dr. Besch was named the Chief Product Officer and Chief Technology Officer effective January 1, 2025. He joined the Company in May 2021 as SVP Product Strategy & Innovation and became the Company’s Chief Product Officer in October 2022.
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.
(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.
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.
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 20, 2025. Name Age Positions and Offices Held Stephen L.
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.
Silvestro 47 Chief Executive Officer Marion Odence-Ford 60 General Legal Officer and Chief Human Resources Officer Edward Stelmakh 59 Chief Financial Officer and Chief Operations Officer Doug Besch 43 Chief Product Officer and Chief Technology Officer Theresa Greco 52 Chief Commercial Officer Set forth below is a brief description of the background and business experience of each of our current executive officers.
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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.
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Stephen L. Silvestro Mr. Silvestro was appointed the Chief Executive Officer in March 2025. He joined the Company as Chief Commercial Officer in April 2019 and has since served as President from October 2023 until his appointment as interim CEO in January 2025. Prior to joining the Company, Mr.
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Febbo served as Chief Operating Officer of Merriman Holdings, Inc., an investment banking firm, where he assisted with capital raises in the tech, biotech, cleantech, consumer and resources industries. Mr. Febbo was a co-founder of, and from September 2013 to September 2015 served as Chief Executive Officer of, Digital Capital Network, Inc., a transaction platform for institutional and accredited investors.
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Odence-Ford was named the Chief Legal Officer and Chief Human Resources Officer effective January 1, 2025. She joined the Company as General Counsel & Chief Compliance Officer in February 2021. From April 2013 to June 2020, Ms.
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Mr. Febbo was a co-founder of, and from January 1999 to September 2015 was Chief Executive Officer of, MedPanel, LLC, a provider of market intelligence and communications for the pharmaceutical, biomedical, and medical device industries. Since 2017, Mr.
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Febbo has been a faculty member of the Massachusetts Institute of Technology’s linQ program, which is a collaborative initiative focused on increasing the potential of innovative research to benefit society and the economy. Mr.
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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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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.
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Febbo has been a board member of the United Nations Association of Greater Boston, a resource for the citizens of Greater Boston on the broad agenda of critical global issues addressed by the UN and its agencies, since 2004. On January 29, 2018, FINRA accepted a Letter of Acceptance, Waiver and Consent (the “Consent”) submitted by William Febbo.
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Without admitting or denying the findings, Mr. Febbo consented to the sanctions and to the entry of findings that he permitted Merriman Capital, Inc. to conduct a securities business while below its net capital requirement. From August 2012 to October 2015, Mr. Febbo was the Financial and Operations Principal (FinOp) for a registered broker-dealer, Merriman Capital, Inc. (“Merriman”).
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During certain months while Mr. Febbo was FinOp, FINRA found that certain of Merriman’s net capital filings with FINRA were inaccurate because of the method by which Merriman calculated net capital and that, when corrected, it was retroactively determined that Merriman had operated below its minimum net capital requirements. Mr.
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Febbo, as FinOp, signed certain of these reports and was thus held responsible. Based on the Consent, in settlement, Mr.
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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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder 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.
Biggest changeUnder 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. No shares were repurchased under the program during 2024. This stock repurchase authorization expired on March 12 , 2024. Item 6. Reserved
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.
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 March 11, 2025, there were approximately 274 shareholders of record of our common stock. We currently intend to retain future earnings for the operation of our business.
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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 changeTwelve 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.
Biggest changeTwelve Months Ended December 31 2024 2023 (in thousands) Revenue per average full-time employee $ 701 $ 586 Results of Operations for the Years Ended December 31, 2024 and 2023 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 (in thousands): Years Ended December 31, (in thousands, except percentage data) 2024 2023 Total Net Revenue $ 92,127 100.0 % $ 71,522 100.0 % Cost of Revenues 32,749 35.5 % 28,622 40.0 % Gross margin 59,378 64.5 % 42,900 60.0 % Operating expenses 73,084 79.3 % 69,302 96.9 % Loss from operations (13,706 ) (14.8 )% (26,402 ) (36.9 )% Other (expense) income (5,679 ) (6.2 )% 1,238 1.7 % Loss before provision for income taxes (19,385 ) (21.0 )% (25,164 ) (35.2 )% Income tax (expense) benefit (725 ) (0.8 )% 7,598 10.6 % Net loss $ (20,110 ) (21.8 )% $ (17,566 ) (24.6 )% * Balances and percentage of total revenue information may not add due to rounding Net Revenue Our net revenue increased 29% to $92.1 million for the year ended December 31, 2024 from $71.5 million for the year ended December 31, 2023. 66% of the $20.6 million year over year revenue increase resulted from the October 2023 acquisition of Medicx Health, with the remaining increase being primarily due to increased DAAP related sales as the Company generated 48 DAAP deals in 2024 compared to 24 DAAP deals in 2023.
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.
The impairment charges recorded during 2023 relate to intangible assets, primarily technology and patent and trademarks relating to certain non-core assets. 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.
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.
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 transaction on our consolidated tax returns, and our forecast of future earnings, future taxable income and prudent and feasible tax planning strategies.
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.
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.
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.
We have updated the definition of “top 20 pharmaceutical manufacturers” in our key performance indicators to be based upon Fierce Pharma’s most updated list of “The top 20 pharma companies by 2023 revenue”. We previously used “The top 20 pharma companies by 2022 revenue”. As a result of this change, prior periods have been restated for comparative purposes.
In addition, the remaining useful life of the impaired asset is revised, if necessary. We recorded impairment charges of $6.7 million against the value of our intangible assets during the year ended December 31, 2023. No events or circumstances were noted that would be indicative of potential impairment during the year ended December 31, 2022.
In addition, the remaining useful life of the impaired asset is revised, if necessary. No events or circumstances were noted that would be indicative of potential impairment during the year ended December 31, 2024. We recorded impairment charges of $6.7 million against the value of our intangible assets during the year ended December 31, 2023.
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.
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 2023 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.
Goodwill impairment charges may be recognized in future periods to the extent changes in factors or circumstances occur, including deterioration in the macro-economic environment or in the equity markets, including the market value of the Company’s common shares, deterioration in its performance or its future projections, or changes in its plans for one or more reporting units.
Goodwill impairment charges may be recognized in future periods to the extent changes in factors or circumstances occur, including deterioration in the macro-economic environment or in the equity markets, including a decline in the market value of the Company’s common shares, deterioration in its performance or its future projections, or changes in its plans for one or more reporting units.
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.
We expect these seasonality trends to continue and our ability to effectively manage our resources in anticipation of these trends may affect our operating results. 22 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.
The method used to estimate the fair values of intangible assets incorporates significant estimates and assumptions regarding the estimates a market participant would make in order to evaluate an asset, including a market participant's use of the asset, future cash inflows and outflows, probabilities of success, asset lives, and the appropriate discount rates.
The method used to estimate the fair values of intangible assets incorporates significant estimates and assumptions regarding the estimates a market participant would make to evaluate an asset, including a market participant’s use of the asset, future cash inflows and outflows, probabilities of success, asset lives and the appropriate discount rates.
Based on the volume of transactions that are delivered through the channel partner network, we provide a revenue-share to compensate the partner for their promotion of the campaign. Revenue-shares are a negotiated percentage of the transaction fees and can also be specific to special considerations and campaigns.
Based on the volume of transactions that are delivered through a channel partner network, we provide a revenue-share to compensate the channel partner for its or their promotion of the campaign. Revenue-shares are a negotiated percentage of the transaction fees and can also be specific to special considerations and campaigns.
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 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 2023 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 2022 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 2023 revenue” over the last twelve months, divided by our consolidated revenue over the same period.
This judgement and determination effects the amount of consideration paid that is allocated to assets acquired and liabilities assumed in the business purchase transaction. The Company engages third-party appraisal firms to assist in determining fair value of assets acquired and liabilities assumed when appropriate.
This judgement and determination affects the amount of consideration paid that is allocated to assets acquired and liabilities assumed in the business purchase transaction. The Company engages third-party appraisal firms to assist in determining fair value of assets acquired and liabilities assumed when appropriate.
Revenues are primarily generated from content delivery activities in which we deliver financial, clinical, or brand messaging through a distribution network of eprescribers and electronic health record technology providers (channel partners), directly to consumers, or from reselling services that complement the business. This content delivery for a customer is referred to as a program.
Revenues are primarily generated from content delivery activities in which we deliver financial, clinical, or brand messaging through a distribution network of e-prescribers and electronic health record technology providers (channel partners), directly to consumers, or from reselling services that complement the business. This content delivery for a customer is referred to as a program.
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.
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 are not top 20 pharmaceutical manufacturers stayed relatively consistent year over year.
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.
On October 11, 2023, we entered into a financing agreement that provided for a $40.0 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.
In some instances, we also resell messaging solutions that are available through channel partners that are complementary to the core business and client base. These partner specific solutions are frequently similar to our own solutions and revenue recognition for these programs is the same as described above.
In some instances, we also resell messaging solutions that are available through channel partners that are complementary to our HCP marketing business and customer base. These channel partner-specific solutions are frequently similar to our own solutions and revenue recognition for these programs is the same as described above.
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.
Net Income (Loss) We finished the year ended December 31, 2024 with a net loss of $20.1 million, compared to $17.6 million during the year ended December 31, 2023. The reasons for specific components are discussed above. Overall, we had an increase in revenue and gross margin partially offset by increased operating expenses.
In instances where we resell these messaging solutions and have all financial risk and significant operation input and risk, we record the revenue based on the gross amount sold and the amount paid to the channel partner as a cost of sales. Cost of Revenues The primary cost of revenue is revenue-share expense.
In instances where we resell these messaging solutions and have all financial risk and significant operation input and risk, we record the revenue based on the gross amount sold and the amount paid to the channel partner as a cost of sales. 28 Cost of Revenues The primary costs of revenue are revenue-share expense and data acquisition costs.
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.
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 for the year ended December 31, 2023 is discussed in Part II, Item 8.
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.
Financial Statements and Supplementary Data; Note 16 – Commitments. 27 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.
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.
Twelve Months Ended December 31 2024 2023 Percent of top 20 pharmaceutical manufacturers that are customers 100 % 100 % Percent of total revenue attributable to top 20 pharmaceutical manufacturers.
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.
Financials Statements and Supplementary Data; Note 7 - Goodwill and Intangibles. Transaction related costs for the year ended December 31, 2023 arose due to the acquisition of Medicx Health, discussed in Part II, Item 8. Financials Statements and Supplementary Data; Note 3 - Acquisitions.
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.
In addition, the loss in both periods included significant noncash items. We had $24.3 million in noncash operating expenses in 2024 compared to $25.9 million in noncash operating expenses in 2023. Liquidity and Capital Resources Historically, our primary sources of liquidity have been cash receipts from customers and proceeds from equity offerings.
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.
Overall, we employ a “land and expand” strategy focused on growing our existing customer base and generating greater and more consistent revenues in part through a continued shift in our business model toward enterprise level engagements, while also broadening our platform with innovative proprietary virtual communication solutions such as our patented Micro-Neighborhood Targeting and our AI-powered DAAP, which uses sophisticated machine-learning algorithms to find the best audiences in the correct channels at the right time.
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 use a 5-step model to recognize revenue: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when or as the performance obligations are satisfied.
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.
As of December 31, 2024, we had total current assets of $54.0 million, compared with current liabilities of $18.7 million, resulting in working capital of $35.3 million and a current ratio of 3 to 1. This compares with a working capital balance of $36.4 million and a current ratio of 3 to 1 at December 31, 2023.
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 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 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.
The retention rate in 2024 increased due to increased DAAP related revenue streams from existing clients and full year benefit of the October 2023 acquisition of Medicx Health. 23 Twelve Months Ended December 31 2024 2023 Net revenue retention 121 % 105 % Revenue per average full-time employee.
Financial Statements and Supplementary Data; Note 16 – Commitments. 27 Term Loan On October 11, 2023 (the “Loan Date”), in connection with the acquisition of Medicx Health, we entered into a financing agreement that provided for a $40.0 million term loan.
Term Loan On October 11, 2023 (the “Loan Date”), in connection with the acquisition of Medicx Health, we entered into a financing agreement that provided for a $40.0 million term loan.
Twelve Months Ended December 31 2023 2022 Percent of total revenue attributable to top 20 pharmaceutical manufacturers 65 % 62 % Net revenue retention.
Twelve Months Ended December 31 2024 2023 Percent of total revenue attributable to top 20 pharmaceutical manufacturers 64 % 67 % Net revenue retention.
During 2023, we raised $38 million pursuant to the Term Loan to partially fund the acquisition of Medicx Health. In connection with the Term Loan we incurred debt issuance costs of approximately $2.3million, and have made repayments of approximately $1.7 million. In addition, during 2023, we repurchased 526,999 shares of common stock for $7.5 million.
In connection with the Term Loan, we incurred debt issuance costs of approximately $2.3 million, and made repayments of approximately $1.7 million. In addition, during 2023, we repurchased 526,999 shares of common stock for $7.5 million.
Our potential additional interest expense over one year that would result from a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate on all of our variable rate obligations would be approximately $0.4 million on a pre-tax basis. See Part II, Item 8.
We estimate our potential additional interest expense over the next twelve months that would result from a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate on our Term Loan would be approximately $0.3 million on a pre-tax basis.See Part II, Item 8.
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.
Loss of one of more of our larger customers could have a negative impact on our operating results. Our top five customers represented approximately 49% and 44% of our revenue for the years ended December 31, 2024 and December 31, 2023, respectively.
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.
Interest income decreased to $0.3 million for the year ended December 31, 2024, from $2.2 million for the year ended December 31, 2023. 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.
The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09.
This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09.
The Term loan bears a variable interest rate which is currently priced at 14.1%. We incurred debt issuance costs of approximately $2.3 million, in connection with this Term Loan and made repayments of approximately $1.7 million.
The Term loan bears interest at a variable rate, which was 13.3% at December 31, 2024. We incurred debt issuance costs of approximately $2.3 million, in connection with this Term Loan and made repayments of approximately $4.0 million and $1.7 million for the year ended December 31, 2024 and 2023, respectively.
Our 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.
Our 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.
We also incurred capitalized software development costs of $0.8 million, and purchased $0.1 million of tangible property, primarily personal computers and received $2.5 million from the disposal of our Access products (see Part II, Item 8.
We also incurred capitalized software development costs of $0.8 million, and purchased $0.1 million of tangible property, primarily personal computers and received $2.5 million from the disposal of our Access products (see Part II, Item 8. Financials Statements and Supplementary Data; Note 7 - Goodwill and Intangibles). Financing activities used $4.9 million in 2024, and provided $28.2 million in 2023.
Additionally, within the cost of revenues is data acquisition costs which are amortized over the period for which we have access to the data. Intangible Assets Intangible assets are stated at cost.
Data acquisition costs consist primarily of the costs to acquire data through flat-fee data licensing agreements. Data acquisition costs are amortized over the period for which we have access to the data. Intangible Assets Intangible assets are stated at cost.
In addition to the cash payment, net of cash acquired of $82.9 million related to the acquisition of Medicx Health, we purchased $162.8 million and redeemed $218.7 million in Treasury bills during 2023.
In 2024, we incurred capitalized software development costs of $0.3 million, and purchased $0.1 million of tangible property, primarily personal computers. During 2023, in addition to the cash payment of $82.9 million related to the acquisition of Medicx Health, we purchased $162.8 million and redeemed $218.7 million in Treasury bills during 2023.
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.
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.
Many pharmaceutical companies allocate the largest portion of their brand marketing to the fourth quarter of the calendar year. As a result, the first quarter tends to reflect lower activity levels and lower revenue, with gradual increases in the following quarters.
As a result, the first quarter tends to reflect lower activity levels and lower revenue, with gradual increases in the following quarters.
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.
Our cost of revenues as a percentage of revenue decreased to approximately 36% in the year ended December 31, 2024 from approximately 40% in the year ended December 31, 2023. This decrease in our cost of revenues as a percentage of revenue resulted primarily due to favorable network utilization.
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.
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. Historically, during periods of economic uncertainty and downturns, businesses may slow spending, which may impact our business and our customers’ businesses.
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.
Sales general, and administrative expense increased to $49.6 million for the year ended December 31, 2024, from $39.8 million for the year ended December 31, 2023. There were a variety of increases, the largest of which was in compensation, which increased by $7.7 million from $24.1 million in 2023 to $31.8 million in 2024.
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.
Years Ended December 31 2024 2023 Stock-based compensation $ 11,467 $ 13,717 Depreciation and amortization 4,329 2,402 Impairment charges 7,489 6,738 Loss on disposal of a business — 2,142 Transaction costs 243 4,482 Other sales, general, and administrative expense 49,556 39,821 Total operating expense $ 73,084 $ 69,302 Stock-based compensation decreased to $11.5 million for the year ended December 31, 2024, from $13.7 million for the year ended December 31, 2023 as a result of the lower grant date fair value of awards due to declines in the Company’s stock price partially offset by the acceleration of the market based restricted stock units for the former CEO which was fully expensed as of December 31, 2024 upon his resignation.
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.
If the fair value is less than carrying value, an impairment charge is recognized, equivalent to the amount that the carrying value exceeds the fair value. 29 For both the years ended December 31, 2024 and 2023, our annual reviews determined there was no impairment as our single reporting unit had a fair value in excess of its carrying value.
For details regarding long-term obligations, see Part II, Item 8. Financial Statements and Supplementary Data; Note 12 – Long Term Debt in the Consolidated Financial Statements. ● Lease liabilities: Total obligations under short- and long-term operating leases were $0.7 million, with $0.3 million due over the next twelve months.
For details regarding short and long term operating lease liabilities, see Part II, Item 8. Financial Statements and Supplementary Data; Note 13 – Leases in the Consolidated Financial Statements. We have obligations under our former employee severance agreements.
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.
Gross Margin Our gross margin, which is the difference between our revenues and our cost of revenues, increased from 2023 to 2024 and our gross margin percentage increased to 64.5% in 2024 from 60% in 2023. We had higher revenues in 2024, which increased gross margin.
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%.
Our gross margin percentage increased for the reasons discussed above in the cost of revenues section. 24 Operating Expenses Total operating expenses increased to $73.1 million for the year ended December 31, 2024, from $69.3 million for the year ended December 31, 2023, an increase of approximately 5%.
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.
Cost of Revenues Our total cost of revenues, composed primarily of revenue-share expense paid to our channel partners, increased in the year ended December 31, 2024 compared to the year ended December 31, 2023.
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.
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. 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.
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.
Interest expense represents interest charges on our Term Loan, which was raised during 2023 to partially fund the acquisition of Medicx Health, together with the amortization of the related issuance costs, (see Part II, Item 8. Financials Statements and Supplementary Data; Note 12 - Long Term Debt for further details concerning our Term Loan).
ASU 2023-09 addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures.
Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.
(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.
Cash Flows Following is a table with summary data from the consolidated statement of cash flows for the years ended December 31, 2024 and 2023, as presented. 2024 2023 (in thousands) Net cash provided by / (used in) operating activities $ 4,889 $ (7,240 ) Net cash used in investing activities (450 ) (25,337 ) Net cash (used in) / provided by financing activities (4,911 ) 28,220 Net decrease in cash and cash equivalents $ (472 ) $ (4,357 ) 26 Our operating activities provided $4.9 million in the year ended December 31, 2024, as compared with approximately $7.2 million used by operating activities in the year ended December 31, 2023.
Contractual Obligations The Company’s contractual obligations and cash commitments at December 31, 2023, consisted of long term debt, operating lease liabilities, and payments to partners to acquire minimum amounts of media, data or messaging capabilities as follows: ● Long-term debt: Total obligations under the Term Loan were $38.3 million, with $2.0 million due over the next twelve months.
As of December 31, 2024, total obligations under former employee severance agreements were $1.2 million, with $1.0 million due over the next twelve months. Off Balance Sheet Arrangements From time to time, the Company enters into arrangements with channel partners to acquire minimum amounts of media, data or messaging capabilities.
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.
In 2024 and 2023, we had two customers and one customer, respectively, that represented more than 10% of our revenues. Seasonality In general, the pharmaceutical brand marketing industry spends its advertising budget seasonally. Many pharmaceutical companies allocate the largest portion of their brand marketing to the fourth quarter of the calendar year.
For details regarding short- and long-term operating lease liabilities, see Part II, Item 8. Financial Statements and Supplementary Data; Note 13 – Leases in the Consolidated Financial Statements. ● Partner payment obligations: Total obligations for partner payments were $25.1 million, with $11.0 million due over the next twelve months.
Financials Statements and Supplementary Data; Note 12 - Long Term Debt for additional information regarding the Term Loan. Other Contractual Obligations We have obligations under our operating leases for office space. Total obligations under short and long term operating leases were $0.4 million, with $0.2 million due over the next twelve months.
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.
Interest earned in 2024 reflects the lower average balance on amounts held in short-term investments during that period. Income tax (expense) benefit We recorded an income tax expense of $0.7 million for the year ended December 31, 2024 compared to an income tax benefit of $7.6 million for the year ended December 31, 2023.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview OptimizeRx is a digital healthcare technology company that connects over two million HCPs and millions of their patients through an intelligent technology platform embedded within a proprietary omnichannel network.
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.
Depreciation and amortization increased to $4.3 million for the year ended December 31, 2024, from $2.4 million for the year ended December 31, 2023, as a result of the amortization associated with the identifiable intangibles arising from the Medicx Health acquisition.
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.
The above mentioned top 5 client accounts averaged $9.0 million in revenue, which was primarily driven by growth in DAAP and omnichannel messaging expansion. Twelve Months Ended December 31 2024 2023 (in thousands) Average revenue per top 20 pharmaceutical manufacturer $ 2,933 $ 2,399 Percent of top 20 pharmaceutical manufacturers that are customers.
We are subject to market risks arising from changes in interest rates which relate primarily to the Term Loan our term loan, which is variable rate debt. (see Part II, Item 8. Financials Statements and Supplementary Data; Note 12 - Long Term Debt).
As of December 31, 2024, total obligations under the Term Loan were $34.3 million, with $2.0 million of principal payments due over the next twelve months. We are subject to market risks arising from changes in interest rates which relate primarily to the Term Loan, which is variable rate debt.
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.
In 2023, as a result of the Medicx Health acquisition, the Company recorded a deferred tax liability of $7.7 million which was reduced in 2024 for the change in deferred tax liability. This was partially offset by a $2,544 increase in net loss. Investing activities used $0.5 million in 2024, compared with $25.3 million in 2023.
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.
The increase in the average in 2024, as compared to 2023, is primarily the result of higher revenue in the Company’s top 5 client accounts, all of which are included in the average revenue per top 20 pharmaceutical manufacturer KPI calculation.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We are a digital health technology company enabling care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout the patient care journey.
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OptimizeRx helps life sciences organizations engage and support their customers through our combined HCP and DTC marketing strategies. OptimizeRx has historically generated revenue by delivering messages to HCPs via their EHR systems and eRx platforms using our proprietary network of channel partners.
Removed
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.
Added
We have gradually expanded our offerings to include audience development, audience creation, and media execution across different messaging types and media distribution channels.
Removed
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.
Added
In addition, by aiming to transition our DAAP customers to a more predictable subscription-based model for data services, we believe will further improve margins, increase visibility, and enhance the overall predictability of our revenue streams over time.
Removed
In addition, the October 2023 acquisition of Medicx Health provided the Company with a significant footprint for direct-to-consumer healthcare marketing.
Added
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. We have approximately 100 pharmaceutical companies as customers, and our revenues are concentrated among the largest pharmaceutical companies in the world.
Removed
Historically, during periods of economic uncertainty and downturns, businesses may slow spending, which may impact our business and our customers’ businesses. 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.
Added
Federal Reserve raising interest rates have led to economic uncertainty in the recent past, and threats of multinational tariffs and retaliatory tariffs provide uncertainty as to heightened inflation in the domestic markets in the next twelve months.
Removed
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.
Added
Our revenue rate per employee increased year over year due to revenue growing at a higher rate than the average number of FTEs over the last 12 month period.
Removed
The increase is due to the addition of Medicx Health employees since the acquisition date and higher severance, employee benefit and commission costs.

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