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| OPRX.PK > SEC Filings for OPRX.PK > Form 10-Q on 13-Aug-2009 | All Recent SEC Filings |
13-Aug-2009
Quarterly Report
Forward-Looking Statements
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words "believes,"
"project," "expects," "anticipates," "estimates," "intends," "strategy," "plan,"
"may," "will," "would," "will be," "will continue," "will likely result," and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor
provisions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. Our ability to
predict results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.
Company Overview
We conduct all of our operations through our wholly-owned subsidiary, OptimizeRx Michigan. We are a development-stage company that has developed a website, www.optimizerx.com (our "Site"), to help medical patients better afford and manage their rising healthcare costs. In addition, we provide unique advertising programs to the pharmaceutical and healthcare industries.
We recognize that patients have increasing influence in their healthcare decisions, particularly in their medications: what to buy, where to buy, and how to buy. However, there is very little information available to consumers regarding how to access available savings and support programs. We developed our Site to enable consumers to meet their prescribed pharmacological therapies in the most cost-effective manner possible. Our Site is a portal that identifies programs and savings that are available to consumers, based upon their needs. By creating a portal by which consumers access savings on their pharmaceutical needs, we have also created a Site where pharmaceutical companies can reach consumers with their advertising and other programs.
Since our formation, we have concentrated on developing our business strategy and obtaining financing. We plan to expand awareness, traffic and database to our Site, as well as the launch of our offer development systems OFFERx and ADHERxE. We expect that the primary components of our business will be:
The Site and our network affiliates
OFFERx to develop, promote and fulfill new offers from pharmaceutical and healthcare manufactures
ADHERxE to allow manufacturers to re-engage their customers through the activation of new savings each month
We plan to generate revenues through: (i) advertising sales from our Site and affiliate network; (ii) its database; (iii) direct marketing and sponsorships and (iv) our platforms to create, promote and manage new savings offers for additional clients.
We have acquired over a million members to date. Upon this, management has been preparing and addressing all key issues to successfully serve and monetize the membership database, including: content, procurement of advertising sponsorships, technology and distribution. We originally planned to extend our reach and visibility through increased online, print and broadcast marketing to increase traffic and our database of qualified health care consumers. However, with our current membership base, along with the short period of time since acquiring the majority of our members and the sales cycle of attaining sponsorship and industry advertising programs to this new asset, we have not engaged in marketing to our database.
Management continues to believe the OPTIMIZERx database will be a very significant, on-going revenue stream over time. Currently we have over 10 advertising proposals pending to major pharmaceutical companies and agencies, including Lilly, AstraZeneca, Publicis and Novartis.
The company has aggressive plans to initiate advertising programs to its members in the second half of the year. This includes leveraging our formalized partnership with Cegedim Dendrite (www.cegedimdendrite.com), ValueClick Media (www.valueclick.com) and Sudler & Hennessey (http://sudler.com/), a division of WPP.
Results of Operations for the Three and Six Months Ended June 30, 2009 and 2008
Revenues
Our total revenue reported for three months ended June 30, 2009 was $3,449, a decrease from $16,679 for the three months ended June 30, 2008. Our total revenue reported for six months ended June 30, 2009 was $4,720, a decrease from $67,206 for the six months ended June 30, 2008. The decrease in revenue is attributable to the organization performing a onetime special fulfilment order for a client. During the period, the company has continued to focus on 1) building the functionality of its website for both the user interface and architecture for the backend transaction fulfilment and security, and 2) continued to focus at building brand recognition, market place presence, and direct client relationships to identify revenue generation opportunities and programs.
Operating Expenses
Operating expenses increased to $355,462 for the three months ended June 30, 2009 from $218,927 for the same period ended 2008. Our operating expenses for the three months ended June 30, 2009 consisted mainly of consulting fees of $14,198, advertising expenses of $9,282, payroll of $128,427, auto expenses of $18,984 and employee benefits of $12,929. Our operating expenses for the three months ended June 30, 2008 consisted of general and administrative expenses of $109,418, consulting expenses of $98,920 and depreciation and amortization of $10,589.
Operating expenses increased to $1,731,766 for the six months ended June 30, 2009 from $485,036 for the same period ended 2008. Our operating expenses for the six months ended June 30, 2009 consisted mainly of consulting fees of $890,993, advertising expenses of $316,853, payroll of $230,077, website maintenance of $15,726, auto expenses of $33,272 and employee benefits of $23,036. Our operating expenses for the six months ended June 30, 2008 consisted of general and administrative expenses of $273,017, consulting expenses of $193,490 and depreciation and amortization of $18,529.
Other Expenses
Other income was $9,868 for three months ended June 30, 2009 an increase from other expenses of $332,990 for same period ended 2008. Other income was $24,178 for three months ended June 30, 2009 an increase from other expenses of $332,990 for same period ended 2008. The other income for the three and six months ended June 30, 2009 is largely attributable to interest income. The other expenses for the three months ended June 30, 2008 is largely attributable to warrant based compensation.
Net Loss
Net loss for the three months ended June 30, 2009 was $342,145, compared to net loss of $535,238 for the same period 2008. Net loss for the six months ended June 30, 2009 was $1,702,868, compared to net loss of $750,820 for the same period 2008.
Liquidity and Capital Resources
As of June 30, 2009, we had total current assets of $1,347,230 and total assets in the amount of $1,466,979. Our total current liabilities as of June 30, 2009 were $48,343. We had working capital of $1,298,887 as of June 30, 2009.
Operating activities used $1,160,550 in cash for the six months ended June 30, 2009. Our net loss of $1,702,868 was the primary component of our negative operating cash flow, offset mainly by $696,000 in stock issued for services. We had no cash flows used by investing activities during the six months ended June 30, 2009. We used $4,000 in cash flows in financing activities during the six months ended June 30, 2009, for payments on loans payable.
Management feels that our current cash balance will allow us to meet the expenses required to support our growth plans over the next twelve months.
Off Balance Sheet Arrangements
As of June 30, 2009, there were no off balance sheet arrangements.
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