OptimizeRx Annual Report 2010

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-K [X]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2010 [ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from _________ to ________ Commission file number: 000-53605OptimizeRx Cororation(Exact name of registrant as specified in its charter) Nevada 26-1265381(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 407 6th StreetRochester, MI, 48307(Address of principal executive offices)(Zip Code) Registrant’s telephone number: 248-651-6568 Securities registered under Section 12(b) of theExchange Act: Title of each className of each exchange on which registerednonenot applicable Securities registered under Section 12(g) of the Exchange Act: Title of each classCommon Stock, par value of $0.001Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes [X] No [ ]Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). Yes [ ] No [X]Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 232.405 of this chapter) is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K orany amendment to this Form 10-K. Yes [ ] No [X]Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which thecommon equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recentlycompleted second fiscal quarter. $5,401,247Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 13,606,676 as of December31, 2010. Table of ContentsTABLE OF CONTENTS PagePART IItem 1.Business3Item 1A.Risk Factors11Item 1B.Unresolved Staff Comments11Item 2.Properties11Item 3.Legal Proceedings11Item 4.(Removed and Reserved)11PART IIItem 5.Market for Registrant’s Common Equity and Related Stockholder Matters andIssuer Purchases of Equity Securities12Item 6.Selected Financial Data15Item 7.Management’s Discussion and Analysis of Financial Condition and Results ofOperations15Item 7A.Quantitative and Qualitative Disclosures About Market Risk19Item 8.Financial Statements and Supplementary Data20Item 9.Changes In and Disagreements With Accountants on Accounting andFinancial Disclosure21Item 9A.Controls and Procedures21Item 9B.Other Information21PART IIIItem 10.Directors, Executive Officers and Corporate Governance22Item 11.Executive Compensation25Item 12.Security Ownership of Certain Beneficial Owners and Management andRelated Stockholder Matters27Item 13.Certain Relationships and Related Transactions, and Director Independence28Item 14.Principal Accountant Fees and Services28PART IVItem 15.Exhibits, Financial Statement Schedules29 2Table of Contents PART IItem 1. BusinessCompany OverviewOptimizeRx Corporation is no longer a development stage company as of the current report. Throughout the 2010 fiscal year, our operation focus has beenon the further development and initial launch of the SampleMD solution – targeting Pharmaceutical Manufacturers brand vouchers and copay coupons rightat the point of prescribing, while on the business front we sought additional rounds of funding and positioning of strategic partnerships. We conduct all ofour operations, development, sales and marketing through our wholly owned subsidiary, OptimizeRx Michigan.Although in our initial business model for OptimizeRx we recognized that patients have increasing influence in their healthcare decisions, particularly intheir medications: what to buy, where to buy, and how to buy, we also came to realize that there was a great potential to influence these choices physiciansmake on behalf of the patient right at the point of care. Did physicians have information to assist in understanding formulary status and affordability forpatients, additional savings to encourage patient persistency, special medical bulletins, etc., during the prescribing process? By creating a core technologyengine – SampleMD channels this critical information right to the physician, within their work flow, and at the point of care.We now have developed two of the most important informational channels for pharmaceutical manufacturers and their brands within the health care industry:“Direct to Patient” through our OptimizeRx website; and “Direct to Physician” via SampleMD. 3Table of Contents Recent DevelopmentsDuring the current reporting period, we have continued to invest in SampleMD, which offers a virtual “patient support center” that allows physicians andstaff to easily search, select and distribute sample prescription drug vouchers, co-pay coupons and other support information to patients and pharmacies --right from their desktop or electronic medical records (EMR) system. For example, if a physician or staff member searches for a particular drug, all availablecoupons or vouchers for that particular drug will appear on the clinician’s desktop. The clinician can then choose to electronically send or print out thecoupon or voucher for the patient from the SampleMD desktop widget, or they will be sent directly to the pharmacy from within a physician’s ePrescribingapplication when the prescription is finalized by the doctor at the point of care.Throughout 2010, we made many strides in establishing our company and our SampleMD solution within the marketplace.On July 16, 2010, we entered into a Master Services Agreement with Walgreens Health Initiatives in order to promote Walgreens product savings and specialoffers within the SampleMD platform. In turn for our promotional services, our primary compensation will be based on the number of Walgreens offertransactions that are generated by physicians using the SampleMD platform to help their patients better afford the medicines and healthcare products theyneed.In addition, Advocate Health Partners, a joint venture between the Advocate Health Care system and 3,600 physicians on the medical staffs of Advocatehospitals, not only signed an agreement to utilize SampleMD, but it beta launched the application on November 15, 2010 throughout its clinics. Additionalhealth systems that launched late in 2010 include NuHealth System, a Long Island healthcare organization and Carillion Health, a Virginia health careprovider.On the strategic relationship front, we have entered into a partnership with Physicians Interactive Holding, LLC (“PI”), a leading digital sales and marketingpartner of life sciences companies, to provide healthcare professionals with SampleMD. The partnership will allow each company to distribute each other’sproducts and services via web, desktop and mobile applications as well as to develop a joint solution that will combine each of the industry leadingtechnologies for a “one-stop-shop” for clinicians to access numerous pharmaceutical samples, vouchers, co-pay programs and other patient support.We hope this partnership will increase the speed, ease and convenience with which clinicians can access pharma and life science products to better care fortheir patients. Doctors will be able to review a selected drug’s formulary status within the patients’ insurance plan to determine at what level the product ispaid/reimbursed, as well as the latest product information, and can directly contact the representative for more information through SampleMD. In addition tothe partnership, PI has made a financial investment in our company, which is described in more detail below under the section titled “Liquidity and CapitalResources,” to help finance our operations going forward.We also entered into a relationship with Allscripts, a leading ePrescribing and Electronic Medical Records technology company serving some 100,000 plusdoctors and prescribing physicians. This integration of the SampleMD technology right within the ePrescribing application streamlines the process withwhich doctors find available vouchers and coupons for patients. Once a drug is prescribed by the doctor, if a program exists then it is automatically searchedand presented to the doctor right at the point of prescribed care. The initial beta of this application was launched on December 13, 2010 within the Allscriptsenvironment.We believe the launch of this new technology will expand accessibility options to healthcare providers and extends the channel reach of pharmaceuticalcompanies eager to build loyalty, trust and credibility among physicians and office staff, as well as to overcome increasingly typical bans and restrictions ondrug reps and sampling. 4Table of Contents Principal Products and Applications·SampleMD - Today, almost 2/3 of doctors’ offices ban or limit drug representatives and the samples they offer. Although samples are stillvaluable, many healthcare systems and doctors are looking for an easier, more effective way to increase affordable access and adherence totheir prescribed branded medications which led us during the past year to develop our direct to physician solution called SampleMD. SampleMD is a revolutionary downloadable virtual "Patient Support Center" that allows doctors and staff to access a universe of samplevouchers, co-pay coupons and the fulfillment and adjudication of claims directly from their desktops. Doctors and healthcare providersutilize the SampleMD application from their computer desktops or integrate it into their EMR and/or e-Prescribe systems to search, print orelectronically dispense drug samples and co-pay coupons through a national network of pharmacies. SampleMD eliminates the need forphysicians to manage and store physical drug samples by offering a more convenient and efficient way to allocate, administer and tracksamples and co-pay savings provided to their patients. Doctors can also review a branded drug's formulary status within the patients'insurance plan to determine at what level the product is paid/reimbursed. With an integrated automated communications capability,SampleMD will also provide on-going patient support and delivery of monthly co-pay savings to promote continued drug compliance forchronic conditions such as diabetes, heart disease and asthma.· OPTIMIZERx.com – Our Site is a portal to healthcare savings for patients to centrally review and participate in prescription and healthcaresavings and support programs. We strive to provide all the information and guidance that patients undergoing long-term pharmaceuticaltreatments may require. Patients can search by their medication or their condition in order to access educational information regardingtheir condition, information regarding their medication, coupons for instant savings when they purchase their medications, information onfree drug trials, and guidance to any other savings programs available to them. By providing information as well as significant savings opportunities to users of our Site, we hope to become the default medical websitefor both patients and the pharmaceutical industry. We feel that the aging of the baby boom generation, combined with the preponderanceof internet usage to access information and savings in all areas, has created a large potential market for our Site. The Site is also thelaunching point for our other products, OFFERx and ADHERxE.·OFFERx – Our turn-key online platform, OFFERx, allows manufacturers to create, promote, and fulfill new medication offering programs.Through our simple online interface, pharmaceutical manufacturers can offer coupons, discounts, and free trials directly to patients on ourSite. This gives a significant level of control to manufacturers regarding the timing and level of their discounts. It also allowsunprecedented flexibility in responding to market conditions as manufacturers will no longer need to allow for the long lead timesnecessary to prepare, print, and distribute the materials traditionally required for such programs.· AHERxE is our turn-key online platform that allows manufacturers to engage and monitor patients each month in exchange for activationof their monthly co-pay coupons. Pharmaceutical companies that wish to monitor the usage and effectiveness of their products throughonline surveys are able to provide incentives for patients to participate in the surveys by providing discounts through online couponsavailable on our Site. Patients complete an initial survey to determine their treatment status. Each month, when patients respond toreminder emails and complete the manufacturer’s ongoing survey, they receive a coupon for discounts on their medications copays. Thishelps patients afford their medications and provides a way for pharmaceutical companies to track patient usage and results of treatmentprograms. 5Table of Contents Marketing and SalesWith our marketing partners, we intend to promote OPTIMIZERx and SampleMD primarily through the following:· Internet Marketing· Public Relations Campaigns· Physician Offices· Direct to Consumer Marketing· Newspaper and Advertising· Cable TV· Pharmacy Partners· Fortune 500 Employers- Benefits Departments· Unions and Other Church and Civic organizations· Physician Organizations and Associations· Strategic RelationshipsFor distribution and sales purposes, we rely on internal and independent sales representatives. Additionally, we have entered into co-promotional agreementswith Physicians Interactive and Allscripts as detailed above. Research and DevelopmentAll of our officers and directors are part of our continual research development team and monitor new technologies, trends, services, and partnerships that canhelp us provide additional services and increased value to the healthcare and pharmaceutical industries and to the patients we serve.Additionally, for the development of SampleMD and enhancements to our technology, OPTIMIZERx has aligned with the Engineering and InformationTechnology department of Oakland University in Rochester Michigan. They bring highly skilled technology and application developers as well as a solidknowledge of the medical industry.As mentioned prior, we are currently in the launch phase of SampleMD, our direct to physician solution aimed at simplifying the business processes ofproviding, administrating, and distributing branded prescription medications to patients. Our continued efforts, complimenting SampleMD withOPTIMIZERx is to provide better affordability for better healthcare.We seek to educate both our direct and our extended teams through an understanding of all market dynamics that have the potential to affect our business inboth the short and long term. Our primary goal is to help patients better afford and access the medicines their doctors prescribe, as well as other healthcareproducts and services they need. Based on this goal, we continually seek better ways to meet this mission through the use of improved technology, userfeedback, and working closely with the pharmaceutical industry. We are continually seeking new ways we can engage the pharmaceutical industry to providenew support programs to patients in need of their products. 6Table of Contents Competition Direct to Physician Sampling Environment (SampleMD)SampleMD has faced little competition as it enters the market. The biggest of challengers was physicians having physical samples available on site andwithin their clinics. MedManage, a technology company who provides a web enables service allowing physician to order physicial sample on line fordelivery to their clinics was the most prevalent of competitors. MedManage is a Physicians Interactive owned company, and through the partnership allowsfor the integration of the SampleMD engine within its application (and as another distribution channel for SampleMD) providing the best of either samplingenvironment for physicians. This integration of SampleMD within multiple distribution channels continued to be a major growth potential for SampleMD,unlike more competitive direct to consumer environment and the OptimizeRx website activity.The OptimizeRx.com website will compete in the highly competitive pharmaceutical and healthcare advertising industry that is dominated by large well-known companies with established names, solid market niches, wide arrays of product offerings and marketing networks. Our largest competitors include avariety of healthcare website publishers and networks that provide online advertising competition to OPTIMIZERx.com, including Quality Health, WebMD,McKesson, and Drugs.com.· Quality Health – Quality Health hosts an interactive website that allows users to research information regarding medical conditions, medications,and treatments. Visitors to their website can also search for doctors or health centers in their area, both generally and specific to their condition.· WebMD – WebMD provides in-depth reference material regarding medical conditions and medicines to users. Individuals can search for adiagnosis via symptoms or research details regarding their previously diagnosed medical conditions. Online support forums are also hosted forpatients with particularly challenging conditions.· McKesson – McKesson Corporation has been providing health care services in the United States for over 175 years. They act as a distributor forpharmaceutical companies to a network of pharmacies, and have developed online solutions for customers, third-party payors, and manufacturers.McKesson has significantly greater financial resources and brand recognition than we do.· Drugs.com – Drugs.com provides free, accurate, and independent advice on more than 24,000 prescription drugs, over-the-counter medicines, andnatural products. Their data sources include Micromedex™, Cerner Multum™, Wolters Kluwer™, and others. Users can search by condition ormedication.Our competitors who have not done so already may be able to enter into the field by developing a website to promote health care offers. However, most maybe limited in their ability to create, promote and manage new and exclusive prescription trials or offers. Additionally, with ADHERxE and the ability tocreate multiple offers activated each month for returning patients who sign up, we believe that we are uniquely positioned with significant barriers to entryfor potential competitors in this area. 7Table of Contents Intellectual PropertyAll key aspects of our promotional and offer development platforms are pending patent review. However, our business is not predicated on being awardedpatent exclusiveness. Rather, patent protection represents a huge asset and further opportunity upon its receipt.OPTIMIZERx is a licensed trademark.SampleMD is a licensed trademark Our intellectual property is developed significantly each month. Since inception, we have developed and launched OFFERx and ADHERxE, and we arefurther integrating these platforms to provide more robust offerings. OPTIMIZERx.com and OFFERx are patent pending. The following table summarizes the status of our patents and patent applications as of the date hereof:App Number/Filing Date Brief Summary(Products Covered) StatusS.N. 11/528,292September 27, 2006 System for providing patient savings and promoting healthcare product sales Patent application pending.S.N. 61/277,161September 21,2009 Virtual Sample Cabinet System and Method for PrescribingDrug Marketing Patent application pending 8Table of Contents Government RegulationFraud and Abuse LawsAnti-Kickback StatutesThe federal healthcare program Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providingremuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the furnishing, arranging for or recommending agood or service for which payment may be made in whole or part under a federal healthcare program such as Medicare or Medicaid. The definition ofremuneration has been broadly interpreted to include anything of value, including for example gifts, discounts, the furnishing of supplies or equipment,credit arrangements, payments of cash and waivers of payments. Several courts have interpreted the statute's intent requirement to mean that if any onepurpose of an arrangement involving remuneration is to induce referrals or otherwise generate business involving goods or services reimbursed in whole or inpart under federal healthcare programs, the statute has been violated. The law contains a few statutory exceptions, including payments to bona fideemployees, certain discounts and certain payments to group purchasing organizations. Violations can result in significant penalties, imprisonment andexclusion from Medicare, Medicaid and other federal healthcare programs. Exclusion of a manufacturer would preclude any federal healthcare program frompaying for its products. In addition, kickback arrangements can provide the basis for an action under the Federal False Claims Act, which is discussed in moredetail below. The Anti-Kickback Statute is broad and potentially prohibits many arrangements and practices that are lawful in businesses outside of thehealthcare industry. Recognizing that the Anti-Kickback Statute is broad and may technically prohibit many innocuous or beneficial arrangements, theOffice of Inspector General of Health and Human Services, or OIG, issued a series of regulations, known as the safe harbors, beginning in July 1991. Thesesafe harbors set forth provisions that, if all the applicable requirements are met, will assure healthcare providers and other parties that they will not beprosecuted under the Anti-Kickback Statute. The failure of a transaction or arrangement to fit precisely within one or more safe harbors does not necessarilymean that it is illegal or that prosecution will be pursued. However, conduct and business arrangements that do not fully satisfy each applicable safe harbormay result in increased scrutiny by government enforcement authorities such as the OIG. Arrangements that implicate the Anti-Kickback Law, and that do notfall within a safe harbor, are analyzed by the OIG on a case-by-case basis. Government officials have focused recent enforcement efforts on, among otherthings, the sales and marketing activities of healthcare companies, and recently have brought cases against individuals or entities with personnel whoallegedly offered unlawful inducements to potential or existing customers in an attempt to procure their business. Settlements of these cases by healthcarecompanies have involved significant fines and/or penalties and in some instances criminal pleas. In addition to the Federal Anti-Kickback Statute, manystates have their own kickback laws. Often, these laws closely follow the language of the federal law, although they do not always have the same exceptionsor safe harbors. In some states, these anti-kickback laws apply with respect to all payors, including commercial health insurance companies.False Claims LawsFederal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government orknowingly making, or causing to be made, a false statement to get a false claim paid. Manufacturers can be held liable under false claims laws, even if they donot submit claims to the government, if they are found to have caused submission of false claims. The Federal Civil False Claims Act also includes whistleblower provisions that allow private citizens to bring suit against an entity or individual on behalf of the United States and to recover a portion of anymonetary recovery. Many of the recent highly publicized settlements in the healthcare industry related to sales and marketing practices have been casesbrought under the False Claims Act. The majority of states also have statutes or regulations similar to the federal false claims laws, which apply to items andservices reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. Sanctions under these federal and state lawsmay include civil monetary penalties, exclusion of a manufacturer's products from reimbursement under government programs, criminal fines andimprisonment.Privacy and Security The Health Insurance Portability and Accountability Act of 1996, or HIPAA, and the rules promulgated there under require certain entities, referred to ascovered entities, to comply with established standards, including standards regarding the privacy and security of protected health information, or PHI. HIPAAfurther requires that covered entities enter into agreements meeting certain regulatory requirements with their business associates, as such term is defined byHIPAA, which, among other things, obligate the business associates to safeguard the covered entity's PHI against improper use and disclosure. While notdirectly regulated by HIPAA, our customers or distributors might face significant contractual liability pursuant to such an agreement if the business associatebreaches the agreement or causes the covered entity to fail to comply with HIPAA. It is possible that HIPPA compliance could become a substantialregulatory burden and expense to our operations, although we do not believe that this will occur as a general website publisher. 9Table of Contents Corporate HistoryOptimizer Systems, LLC was formed in the State of Michigan on January 31, 2006. It then became a corporation in the state of Michigan on October 22,2007 and changed its name to OptimizeRx Corporation on October 22, 2007. On April 14, 2008, our company, known at the time as RFID Ltd.,consummated entering into a share exchange agreement with the stockholders of OptimizeRx Corporation, pursuant to which the stockholders ofOptimizeRx Corporation exchanged all of the issued and outstanding capital stock of OptimizeRx Corporation for 10,664,000 shares of common stock ofRFID Ltd.. As of April 30, 2008, RFID’s officers and directors resigned their positions and RFID changed its business to OptimizeRx’s business. As a result,the historical discussion and financial statements included in this annual report are those of OptimizeRx Corporation. On April 15, 2008, RFID Ltd’scorporate name was changed to OptimizeRx Corporation. On September 4, 2008, we then completed a migratory merger, thereby changing our state ofincorporation from Colorado to Nevada, resulting in the current corporate structure in which we, OptimizeRx Corporation, a Nevada corporation is the parentcorporation, and OptimizeRx Corporation, a Michigan Corporation is our wholly-owned subsidiary.EmployeesAs of December 31, 2010, we had five full-time employees and one independent sales contractor who perform various services for us. We also engageconsultants, independent sales representatives, investor relations, accounting and legal services. We also established a relationship with Oakland Universityfor technical and programming resources.SubsidiariesWe conduct our operations through our wholly-owned subsidiary, OptimizeRx Michigan. 10Table of Contents Item 1A. Risk FactorsA smaller reporting company is not required to provide the information required by this Item.Item 1B. Unresolved Staff CommentsNoneItem 2. PropertiesCurrently, we do not own any real estate. Our principal executive offices are located at 407 Sixth Street, Rochester, Michigan, 48307. We have entered into asix-month lease for this 2,000 square foot facility, with a cost of approximately $2,500 per month. We believe that our properties are adequate for our currentneeds, but growth potential towards mid to end of 2011 may require larger facilities due to anticipated addition of personnel. We do not have any policiesregarding investments in real estate, securities or other forms of property. Item 3. Legal ProceedingsAside from the following, we are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers,directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.On August 18, 2010, we commenced an action against Midtown Partners & Co., LLC (“Midtwon Partners”) in the Circuit Court for the County of Oakland inthe State of Michigan. The action is based on a dispute between our company and Midtown Partners surrounding a placement agent agreement that wasentered into on June 27, 2008. We filed the action seeking declaratory relief that no compensation is due and owing to Midtown Partners in connection withan investment made by Vicis on June 4, 2010.Midtown Partners removed the action to the United States District Court for the Eastern District of Michigan. We are in the initial pleading stage of thislitigation.Item 4. (Removed and Reserved) 11Table of ContentsPART IIItem 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMarket InformationSince October 28, 2009, our common stock has been quoted on the OTC Bulletin Board, under the symbol “OPRX.”The following table sets forth the range of high and low prices for our common stock for the each of the periods indicated as reported by the OTC BulletinBoard.Fiscal Year Ending December 31, 2010Quarter Ended High $ Low $December 31, 2010 1.50 0.80September 30, 2010 2.02 0.75June 30, 2010 2.45 1.26March 31, 2010 2.65 0The following table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by the OTCBulletin Board. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actualtransactions.Fiscal Year Ending December 31, 2009Quarter Ended High $ Low $December 31, 2009 2.20 0.10September 30, 2009 3.00 0.20June 30, 2009 4.00 1.05March 31, 2009 4.25 0.40On March 30, 2011, the last sales price per share of our common stock was $0.75. 12Table of Contents Penny StockThe SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securitieswith a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, providedthat current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules requirea broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains adescription of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of thebroker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or otherrequirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and thesignificance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significantterms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, includinglanguage, type size and format, as the SEC shall require by rule or regulation.The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock;(b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or othercomparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value ofeach penny stock held in the customer's account.In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make aspecial written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of thereceipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitabilitystatement.These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty sellingour securities.Holders of Our Common StockAs of December 31, 2010, we had 13,606,676 shares of our common stock issued and outstanding, held by 312 shareholders of record, not including thoseheld in street name. DividendsWe currently intend to retain future earnings for the operation of our business. We have never declared or paid cash dividends on our common stock, andwe do not anticipate paying any cash dividends in the foreseeable future. In the event that a dividend is declared, common stockholders on the record date are entitled to share ratably in any dividends that may be declared fromtime to time on the common stock by our board of directors from funds legally available. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. The Nevada Revised Statutes, however, doprohibit us from declaring dividends where, after giving effect to the distribution of the dividend: 1.We would not be able to pay our debts as they become due in the usual course of business; or 2.Our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders whohave preferential rights superior to those receiving the distribution. 13Table of Contents Securities Authorized for Issuance under Equity Compensation PlansOn March 5, 2008, our Board of Directors adopted the 2008 Company Stock Option Plan. The purpose of this plan is to provide incentives to attract, retainand motivate eligible persons whose present and potential contributions are important to our success, by offering them an opportunity to participate in theour future performance through awards of options, the right to purchase common stock and stock bonuses. We reserved 1,490,000 shares of our CommonStock for awards to be made under the 2008 Plan. The 2008 Plan is administered by a committee of two or more members of the Board of Directors or, if nocommittee is appointed, then by the Board of Directors. The committee, or the Board of Directors if there is no committee, determines who is eligible toreceive awards under the plan, grant awards and interpret the 2008 Plan.We also have warrants outstanding to purchase 10,361,100 shares of our common stock as of December 31, 2010.Equity Compensation Plans as of December 31, 2010 ABCPlan Category Number of securities to be issued uponexercise of outstanding options,warrants and rights Weighted-average exercise price ofoutstanding options, warrants andrightNumber of securities remainingavailable for future issuance underequity compensation plans (excludingsecurities reflected in column (A))Equity compensation plansapproved by securityholders Equity compensation plansnot approved by securityholders10,836,100$2.131,015,000Total 14Table of Contents Recent Sales of Unregistered SecuritiesOn March 11, 2010, we issued 12,000 shares of common stock for services valued at $27,960.On April 20, 2010, we issued 66,000 shares to board members for services valued at $130,680.Additionally on May 27, 2010, we issued 25,000 for services valued at $42,500.On September 27, 2010, we issued 100,000 shares of common stock for services valued at $100,000.On October 14, 2010, we issued 24,000 shares to a board member or advisory services valued at $30,000.During the year ended December 31, 2010, we issued 410,520 shares of common stock to satisfy $700,000 of preferred dividends.On February 19, 2010, 75,400 stock warrants were exercised for 43,039 shares of common stock in a cashless exchange.On May 19, 2010, 25,000 stock warrants were exercised for 25,000 shares of common stock for total proceeds of $8,750.On April 26, 2010, we acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for the SampleMDpatent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000 stock optionsvalued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party.These issuances were deemed to be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended, since, among otherthings, the transactions did not involve a public offering, the investors were accredited investors and / or qualified institutional buyers, the investors hadaccess to information about the Company and their investment, the investors took the securities for investment and not resale, and the Company tookappropriate measures to restrict the transfer of the securities. Item 6. Selected Financial DataA smaller reporting company is not required to provide the information required by this Item.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking StatementsCertain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, andexpected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the PrivateSecurities 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 thesafe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement forpurposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject torisks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actualeffect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on aconsolidated 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 statementsand 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 couldmaterially affect our financial results, is included herein and in our other filings with the SEC. 15Table of Contents Results of Operations for the Years Ended December 31, 2010 and 2009RevenuesOur total revenue reported for year ended December 31, 2010 was $71,065, an increase from $26,723 from the prior year.Our increased revenue for the year ended December 31, 2010 as compared with the prior year is a result of the initial launch of our SampleMD solution andthe setup and integration fees for pharmaceutical manufacturers whom are participating within this offering.Operating ExpensesOperating expenses decreased to $1,917,296 for the year ended December 31, 2010 from $4,613,039 for the year ended December 31, 2009. Our operatingexpenses for year ended December 31, 2010 as compared to the prior year is set forth below: 20102009 OPERATING EXPENSES Salaries, wages, taxes andbenefits$803,774$524,632Share-based compensation toemployees6,2031,321,226Consulting fees355,9291,554,415Advertising130,061686,545Professional fees213,970154,752Travel58,13276,142Investor relations53,45030,900Depreciation, amortization andimpairment119,08332,516Research and development78,43739,388Insurance22,32814,054Website maintenance22,48015,801General and administrative53,449162,668Our expenses decreased in 2010 as compared with 2009 largely as a result of less expenses related to share-based compensation, consulting fees andadvertising.Other Income/ExpensesOther expenses were $162,793 for year ended December 31, 2010 a decrease from other income of $30,627 for same period ended 2009. We had $106,551 ininterest expenses and an impairment of $59,083 for the year ended December 31, 2010, that resulted in the major difference between 2010 and 2009.Net LossNet loss for the year ended December 31, 2010 was $2,009,024, compared to net loss of $4,555,689 for the year ended December 31, 2009. 16Table of Contents Liquidity and Capital ResourcesAs of December 31, 2010, we had total current assets of $2,084,145 and total assets in the amount of $3,748,627. Our total current liabilities as of December31, 2010 were $854,829. We had working capital of $1,229,316 as of December 31, 2010.Operating activities used $1,311,413 in cash for the year ended December 31, 2010. Our net loss of $2,009,024 was the primary component of our negativeoperating cash flow, offset mainly by $281,140 in stock issued for services, $186,425 in stock warrants issued for services and a $225,720 increase in deferredrevenue. Investing activities used $225,637 during the year ended December 31, 2010 largely as a result of website development costs. Financing activitiesprovided $2,158,750 for the year ended December 31, 2010 largely as a result of the sale of our Series B Preferred Stock and proceeds from a note payable.On October 5, 2010, we issued a secured promissory note (the “Note”) in the principal amount of $1,000,000 to Physicians Interactive, Inc., a Delawarecorporation (the “Investor”). The Investor also received a seven year warrant to purchase up to 1,000,000 shares of our common stock at an initial exerciseprice of $2.25 per share and a contingent seven year warrant to purchase up to an aggregate of 1,000,000 shares of our common stock at an initial exerciseprice of $2.00 based on royalties we may receive under a Strategic Partnering Agreement we entered into with Physicians Interactive Holdings, LLC (togetherthe “Warrants”).The Note accrues interest at a rate of 6% per annum, compounded on April and October each year, which will be paid together with the repayment of theprincipal amount at the earliest of (i) September 12, 2012; (ii) prepayment of the Note at our option (iii) the occurrence of an Event of Default (as defined inthe Note); or (iv) the “Maturity Date” as defined in our Certificate of Designation for our Series B Convertible Preferred Stock.The Notes and Warrants were issued pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) dated as of October 5, 2010 with theInvestor. The Investor is entitled to certain contractual benefits under the Purchase Agreement, which are summarized as follows:§ Until June 4, 2012 or until prepayment in full of all obligations under the Note, the right, subject to certain exceptions, to participate in anysubsequent sale of our common stock or any securities convertible into our common stock up to 30% of the amount of the financing;§ At any time when the Note is outstanding, the right to nominate a designee of Investor for election to our Board of Directors and to provide suchnominee with D&O insurance coverage;§ At any time when the Note is outstanding, we are prohibited from: issuing dividends or repurchasing our outstanding shares, incurring certainindebtedness, issuing securities that are senior to the Note; disposing of 20% of our assets; incurring a change in control; increasing the authorizedsize of our Board of Directors; entering into certain transactions with affiliates; or registering certain shares; and§ Upon the occurrence and continuance of an Event of Default (as defined in the Purchase Agreement), the Investor may at any time (unless alldefaults shall theretofore have been remedied) require us to pay immediately 125% of the sum of all unpaid principal on the Note plus all accruedbut unpaid interest and other amounts payable thereunder. 17Table of Contents Our wholly-owned subsidiary, OptimizeRx Corporation, a Michigan corporation (the “Guarantor”), entered into a Guaranty Agreement (the “Guaranty”) withInvestor to guarantee the prompt and complete payment when due of all principal, interest and other amounts under the Note. The obligations under theGuaranty are independent of our obligations under the Note and separate actions may be brought against the Guarantor.Vicis Capital Master Fund, a sub-trust of Vicis Capital Series Master Trust, a unit trust organized and existing under the laws of the Cayman Islands (“Vicis”)was instrumental in facilitating our $1,000,000 financing transaction with Investor by participating and by making certain concessions in our transactiondocuments with the Investor. As previously reported, we entered into two financing transactions with Vicis. The first was a Securities Purchase Agreement forthe sale of Series A Convertible Preferred Stock dated as of September 8, 2008 and the second was a Securities Purchase Agreement dated as of June 4, 2010for the sale of Series B Convertible Preferred Stock (the “Vicis Financings”). In connection with the Vicis Financings, we granted Vicis a security interest inour assets and further agreed to register certain shares brought about by the financings. In order to induce the Investor to enter into an agreement with us,Vicis agreed to modify its security agreement and registration rights agreement.Specifically, we entered into a Second Amended and Restated Security Agreement with Vicis and the Investor, which granted the parties a security interest insubstantially all of our assets. The Guarantor also entered into a Second Amended and Restated Guarantor Security Agreement with Vicis and the Investor,which granted the parties a security interest in substantially all of the Guarantor’s assets.We further entered into an Amended and Restated Registration Rights Agreement with Vicis and the Investor to file a registration statement upon demand tocover the resale of the shares of our common stock issuable upon exercise of the Investor’s Warrants, the shares of our common stock issuable uponconversion of Vicis’ Series B Convertible Preferred Stock, and the shares of our common stock issuable as dividends on the Series B Convertible PreferredStock.We were also a party to a Securityholders’ Agreement where Vicis and the Investor contracted over matters including, the maturity date for the Series AConvertible Preferred Stock and Series B Convertible Preferred Stock, preemptive rights for future financings, and voting rights for ominee directors. Finally,we were a party to an Intercreditor Agreement where Vicis and the Investor contracted over matters including, confirming the relative priority with respect toour collateral assets, providing for the orderly sharing of the proceeds of such assets, and agreeing upon the terms of the subordination of our obligations.Also, as previously reported, during the year ended December 31, 2010, we issued 15 preferred shares for $1,500,000.As of December 31, 2010 with the current level of financing and cash on hand, we have sufficient cash to operate our business at the current level for the nexttwelve months but insufficient cash to achieve our business goals unless we: a) realize cash revenues on sales generated; b) meet the milestones as defined inthe second round of financing with Vicis and satisfy the conditions to secure the second tranche of funding; and/or c) obtain additional financing throughdebt and/or equity based financing arrangements which may be insufficient to fund our capital expenditures, working capital, or other cash requirements.There can be no assurance that such additional financing will be available to us on acceptable terms, or at all. 18Table of ContentsOff Balance Sheet ArrangementsAs of December 31, 2010, there were no off balance sheet arrangements.Going ConcernThe accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustainedsubstantial losses since inception.In view of this matter, the ability of the Company to continue as a going concern is dependent upon growth of revenues and the ability of the Company toraise additional capital. Management believes that its successful ability to raise capital and increases in revenues will provide the opportunity for theCompany to continue as a going concern.Critical Accounting PoliciesIn December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SECindicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requiresmanagement’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherentlyuncertain.Our critical accounting policies are set forth in Note 2 to the financial statements.Recently Issued Accounting PronouncementsThe Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results ofoperation, financial position or cash flow. Item 7A. Quantitative and Qualitative Disclosures About Market RiskA smaller reporting company is not required to provide the information required by this Item. 19Table of Contents Item 8. Financial Statements and Supplementary DataIndex to Financial Statements Required by Article 8 of Regulation S-X:Audited Financial Statements:F-1Report of Independent Registered Public Accounting FirmF-2Consolidated Balance Sheets as of December 31, 2010 and 2009F-3Consolidated Statements of Operations for the years endedDecember 31, 2010 and 2009F-4Consolidated Statement of Stockholders’ Equity as of December31, 2010F-5Consolidated Statements of Cash Flows for the year endedDecember 31, 2010 and 2009F-6Consolidated Notes to Financial Statements 20Table of Contents Silberstein Ungar, PLLC CPAs and Business Advisors Phone (248) 203-0080Fax (248) 281-094030600 Telegraph Road, Suite 2175Bingham Farms, MI 48025-4586www.sucpas.comREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of DirectorsOptimizeRx CorporationRochester, MichiganWe have audited the accompanying consolidated balance sheets of OptimizeRx Corporation as of December 31, 2010 and 2009, and the related consolidatedstatements of operations, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Companiesmanagement. Our responsibility is to express an opinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company hasdetermined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits includedconsideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no suchopinion. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of OptimizeRxCorporation, as of December 31, 2010 and 2009 and the results of their operations and cash flows for the years then ended, in conformity with accountingprinciples generally accepted in the United States.The accompanying consolidated financial statements have been prepared assuming that the OptimizeRx Corporation will continue as a going concern. Asdiscussed in Note 17 to the financial statements, the Company has limited working capital, has received limited revenue from sales of products or services,and has incurred losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’splans with regard to these matters are described in Note 17. The accompanying consolidated financial statements do not include any adjustments that mightresult from the outcome of this uncertainty./s/ Silberstein Ungar, PLLCSilberstein Ungar, PLLCBingham Farms, MichiganMarch 30, 2011 F-1Table of Contents OPTIMIZERx CORPORATIONCONSOLIDATED BALANCE SHEETSAS OF DECEMBER 31, 2010 AND 2009 ASSETS 2010 2009 Current Assets Cash and cash equivalents $1,278,094 $656,394 Account receivable – trade 226,000 14,465 Prepaid expenses 80,051 8,092 Debt discount – current portion 500,000 0 Total Current Assets 2,084,145 678,951 Property and Equipment, net 13,061 13,581 Other Assets Web development costs, net 332,107 197,610 Patent rights and intangible assets, net 902,647 0 Debt discount – net of current portion 416,667 0 Total Other Assets 1,651,421 197,610 TOTAL ASSETS $3,748,627 $890,142 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable $38,409 $33,224 Accrued expenses 5,700 4,606 Accrued interest 15,000 0 Deferred revenue 225,720 0 Accounts payable – related party 570,000 0 Total Current Liabilities 854,829 37,830 Long-Term Liabilities Note payable 1,000,000 0 TOTAL LIABILITIES 1,854,829 37,830 STOCKHOLDERS’ EQUITY Common stock, par $.001, 500,000,000 shares authorized, 13,606,676 sharesissued and outstanding (12,826,117 – 2009) 13,607 12,826 Preferred stock, par $.001, 10,000,000 shares authorized, 50 shares issued andoutstanding (35 – 2009) 0 0 Stock warrants 20,281,328 18,139,252 Additional paid in capital 3,355,615 1,747,962 Accumulated deficit (21,756,752) (19,047,728)Total Stockholders’ Equity 1,893,798 852,312 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $3,748,627 $890,142 The accompanying notes are an integral part of the financial statements. F-2Table of Contents OPTIMIZERx CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONSFOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 Year endedDecember31, 2010 Year endedDecember31, 2009 GROSS REVENUES $71,065 $26,723 OPERATING EXPENSES Salaries, wages, taxes and benefits 803,774 524,632 Share-based compensation to employees 6,203 1,321,226 Consulting fees 355,929 1,554,415 Advertising 130,061 686,545 Professional fees 213,970 154,752 Travel 58,132 76,142 Investor relations 53,450 30,900 Depreciation and amortization 119,083 32,516 Research and development 78,437 39,388 Insurance 22,328 14,054 Website maintenance 22,480 15,801 General and administrative 53,449 162,668 TOTAL OPERATING EXPENSES 1,917,296 4,613,039 NET OPERATING LOSS (1,846,231) (4,586,316) OTHER INCOME (EXPENSES) Interest income 2,841 30,189 Other income 0 1,471 Interest expense (106,551) (1,033)Impairment (59,083) 0 TOTAL OTHER INCOME (EXPENSES) (162,793) 30,627 NET LOSS BEFORE INCOME TAXES (2,009,024) (4,555,689) PROVISION FOR INCOME TAXES 0 0 NET LOSS $(2,009,024) $(4,555,689) WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 13,231,341 12,583,841 NET LOSS PER SHARE: BASIC AND DILUTED $(0.15) $(0.36) The accompanying notes are an integral part of the financial statements. F-3Table of Contents OPTIMIZERx CORPORATIONCONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITYAS OF DECEMBER 31, 2010 Common Stock Preferred Stock Stock AdditionalPaid in Accumulated Shares Amount Shares Amount Warrants Capital Deficit Total Balance,December 31,2008 12,262,958 $12,263 35 $0 $16,905,280 $0 $(14,492,039) $2,425,504 Outstanding shareadjustment (86,749) (87) - - - 87 - 0 Issuance ofcommon stock forservices 284,000 284 - - - 1,007,956 - 1,008,240 Issuance of stockwarrants andoptions toemployees - - - - 1,321,226 - - 1,321,226 Issuance of stockwarrants andoptions forservices - - - - 618,031 - - 618,031 Conversion ofstock warrants tocommon stock 365,908 366 - - (705,285) 739,919 - 35,000 Net loss for theyear endedDecember 31,2009 - - - - - - (4,555,689) (4,555,689) Balance,December 31,2009 12,826,117 12,826 35 0 18,139,252 1,747,962 (19,047,728) 852,312 Outstanding shareadjustment 75,000 75 - - - (75) - 0 Issuance of stockwarrants forservices - - - - 57,425 - - 57,425 Stock warrantsconverted tocommon stock 43,039 43 - - (153,816) 153,773 - 0 Issuance ofcommon stock forservices 12,000 12 - - - 27,948 - 27,960 Issuance ofcommon stock toboard of directors 66,000 66 - - - 130,614 - 130,680 Issuance ofcommon stock forservices 25,000 25 - - - 42,475 - 42,500 Issuance of stockoptions to acquirepatent rights - - - - - 360,000 - 360,000 Issuance ofcommon stock tosettle dividendson preferred stock 236,598 237 - - - 524,763 (525,000) 0 Stock warrantsconverted tocommon stock 25,000 25 - - (57,425) 66,150 - 8,750 Issuance ofpreferred stock - - 15 - - 1,500,000 - 1,500,000 Preferred stockissuance costs - - - - - (350,000) - (350,000)Issuance of stockwarrants inconnection withpreferred stock - - - - 1,158,900 (1,158,900) - 0 Issuance of stockwarrants forservices - - - - 129,000 - - 129,000 Issuance ofcommon stock forservices 100,000 100 - - 99,900 - 100,000 Issuance of stockoptions toemployee - - - - - 6,203 - 6,203 Issuance of stockwarrants andcontingent stockwarrants inconnection withdebt financing - - - - 1,007,992 - - 1,007,992 Issuance ofcommon stock toboard member 24,000 24 - - - 29,976 - 30,000 Issuance ofcommon stock tosettle dividendson preferred stock 173,922 174 - - - 174,826 (175,000) 0 Net loss for theyear endedDecember 31,2010 - - - - - - (2,009,024) (2,009,024) Balance,December 31,2010 13,606,676 $13,607 50 $0 $20,281,328 $3,355,615 $(21,756,752) $1,893,798 The accompanying notes are an integral part of the financial statements. F-4Table of Contents OPTIMIZERx CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009Cash Flows from Operating Activities:20102009Net Loss for the period$ (2,009,024)$ (4,555,689)Adjustments to Reconcile Net Loss to Net Cash Used in OperatingActivities: Depreciation and amortization expense59,93032,516Impairment of website asset59,0830Common stock issued for services281,1401,008,240Stock options issued for compensation6,2030Stock warrants issued for services186,4251,939,257Interest related to issuance of warrants7,9920Amortization of debt discount83,3330Changes in Assets and Liabilities (Increase) in accounts receivable – trade(211,535)(14,465)Decrease in accounts receivable - employee01,346(Increase) in prepaid expenses(21,959)(4,800)Increase (decrease) in accounts payable3,753(138,640)Increase (decrease) in accrued expenses2,526(37,327)Increase in accrued interest15,0000Increase in deferred revenue225,7200Net Cash Used in Operating Activities(1,311,413)(1,769,562) Cash Flows from Investing Activities: Acquisitions of property and equipment(1,230)0Web development costs(224,407)(107,700)Net Cash Used in Investing Activities(225,637)(107,700) Cash Flows from Financing Activities: Proceeds from note payable1,000,0000Repayments of notes payable – related parties0(4,000)Net proceeds from sale of preferred stock1,150,0000Proceeds from conversion of stock warrants to common stock8,75035,000Net Cash Provided by Financing Activities2,158,75031,000 Net Increase (Decrease) in Cash and Cash Equivalents621,700(1,846,262)Cash and Cash Equivalents – Beginning of year656,3942,502,656Cash and Cash Equivalents – End of year$ 1,278,094$ 656,394 Supplemental Cash Flow Information: Cash paid for interest$ 0$ 1,793Cash paid for income taxes$ 0$ 0Supplemental Disclosure of Non-Cash Investing and FinancingActivities: Stock options issued in connection with acquisition of patent rights$ 360,000$ 0Payable to shareholder to be settled in stock issued in connection withacquisition of patent rights$ 570,000$ 0Debt discount related to warrants issued in connection with debt financing$ 1,000,000$ 0Stock warrants issued in connection with preferred stock issuance$ 1,158,900$ 0Common stock issued to satisfy dividends related to preferred stock$ 700,000$ 0Common stock issued for services and classified as prepaid expense$ 50,000$ 0Non-cash conversions of stock warrants to common stock$ 211,241$ 705,285The accompanying notes are an integral part of the financial statements. F-5Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 1: Nature of OperationsOptimizer Systems, LLC was formed in the State of Michigan on January 31, 2006. It then became a corporation in the state of Michigan on October 22,2007 and changed its name to OptimizeRx Corporation on October 22, 2007. On April 14, 2008, RFID Ltd., a Colorado corporation, consummated a reversemerger by entering into a share exchange agreement with the stockholders of OptimizeRx Corporation, pursuant to which the stockholders of OptimizeRxCorporation exchanged all of the issued and outstanding capital stock of OptimizeRx Corporation for 1,256,958 shares of common stock of RFID Ltd.,representing 100% of the outstanding capital stock of RFID Ltd. As of April 30, 2008, RFID’s officers and directors resigned their positions and RFIDchanged its business to OptimizeRx’s business. On April 15, 2008, RFID Ltd’s corporate name was changed to OptimizeRx Corporation. On September 4,2008, a migratory merger was completed, thereby changing the state of incorporation from Colorado to Nevada, resulting in the current corporate structure inwhich OptimizeRx Corporation, a Nevada corporation is the parent corporation, and OptimizeRx Corporation, a Michigan Corporation is a wholly-ownedsubsidiary (together “OptimizeRx” and the “Company”).The wholly-owned subsidiary, OptimizeRx Corporation, is a technology solutions company targeting the health care industry. Their objective is to bringbetter access to better care through connecting patients, physicians, and pharmaceutical manufacturers through technology. Once defined as a marketing andadvertising company through its consumer website, OptimizeRx is maturing as a technology solutions provider as it launched its direct to physician solution,SampleMD. SampleMD allows physicians to search, print and send available sample trial vouchers and or co-pay coupons on behalf of their patients. TheSampleMD solution can either sit on the doctor’s desktop or can be integrated into the ePrescribing or Electronic Medical Records applications. OptimizeRxsolutions provide pharmaceutical manufacturers either a direct to consumer and or direct to physician channels for communicating and promoting theirproducts. It provides health care providers a means to provide sampling and coupons without having to physically store samples on site, and it providesbetter access and affordability to the patents.Note 2: Significant Accounting PoliciesBasis of PresentationThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of Americaand are presented in US dollars.Accounting BasisThe Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). TheCompany has adopted a December 31 fiscal year end.Principles of ConsolidationThe financial statements reflect the consolidated results of OptimizeRx Corporation (a Nevada corporation) and its wholly owned subsidiary OptimizeRxCorporation (a Michigan corporation). All material inter-company transactions have been eliminated in the consolidation.Development Stage in Prior PeriodsOptimizeRx was in the development stage from October 3, 2008 to May 31, 2010. The year ending December 31, 2010 is the first year during which theCompany is considered an operating company and is no longer in the development stage.ReclassificationsCertain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statements. F-6Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 2: Significant Accounting Policies (continued)Cash and Cash EquivalentsFor purposes of the accompanying financial statements, the Company considers all highly liquid instruments with an initial maturity of three months or lessto be cash equivalents.Concentration of Credit riskFinancial instruments that potentially subject the Company to concentrations of credit risk consist of demand deposits with a financial institution. AtDecember 31, 2010, the company’s cash balances exceed the FDIC insurance amount of $250,000. The Company believes there is minimal credit riskrelative to its cash and investment accounts.Fair Value of Financial InstrumentsThe fair value of cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, accrued interest, deferred revenue, accounts payable –related party and notes payable approximate the carrying amount of these financial instruments due to their short-term nature. The fair value of long-termdebt, which approximates its carrying value, is based on current rates at which the Company could borrow funds with similar remaining maturities.Property and EquipmentThe capital assets are being depreciated over their estimated useful lives, three to seven years, using the straight line method of depreciation for bookpurposes.Research and DevelopmentThe Company’s key members are part of a continual research and development team and monitor new technologies, trends, services and partnerships that canprovide the Company with additional services, value to healthcare and pharmaceutical industries and to the patients we serve.The Company seeks to educate team members through understanding of all market dynamics that have the potential to affect business both short term andlong term. The primary goal is to help patients better afford and access the medications their doctors prescribe, as well as other healthcare products andservices they need. Based on this, the Company continually seeks better ways to meet this mission through technology, better user experiences and new waysto engage industries to provide new support program for patients needing their products. The Company is always seeking new services and solutions tooffer. At this time, the three current platforms provide robust opportunities and growth during the next five years.Revenue RecognitionAll revenue is recognized when it is earned. Revenues are generated either through the Company’s website activities, in which we earn revenue fromadvertising and lead generation activities, or from our SampleMD activities, which include offering setup within the systems and our offers, coupons, andvouchers that enable our customers to save money on medical products and services. The Company’s processes are monitored by third parties who collectrevenues from clients on a per activity basis and report and forward the revenue to the Company’s account.Income TaxesIncome taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities aredetermined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted taxrates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements andthe reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-7Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 2: Significant Accounting Policies (continued)Earnings Per Common and Common Equivalent ShareThe computation of basic earnings per common share is computed using the weighted average number of common shares outstanding during the year. Thecomputation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus common stockequivalents which would arise from the exercise of warrants outstanding using the treasury stock method and the average market price per share during theyear. Options warrants and convertible preferred stock which are common stock equivalents are not included in the diluted earnings per share calculation forDecember 31, 2010 and 2009, respectively, since their effect is anti-dilutive.Impairment of Long-Lived AssetsThe Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable.When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carryingvalue of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount ofthose assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed ofare reported at the lower of the carrying amount or the fair value less costs to sell.Recently Issued Accounting GuidanceThe Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results ofoperation, financial position or cash flow.Note 3: Prepaid ExpensesPrepaid expenses consisted of the following as of December 31: 2010 2009 Insurance $6,111 $4,794 Web development 20,000 0 Investor relations 50,000 0 Employee advances 940 298 Advertising 3,000 3,000 Property and equipment, net $80,051 $8,092 Note 4: Property and EquipmentProperty and equipment is recorded at cost and consisted of the following at December 31: 2010 2009 Computer equipment $13,824 $12,594 Furniture and fixtures 4,293 4,293 Subtotal 18,117 16,887 Less: Accumulated depreciation (5,056) (3,306) Property and equipment, net $13,061 $13,581 Depreciation expense was $1,750 and $1,689 for the years ended December 31, 2010 and 2009, respectively. F-8Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 5: Web Development CostsCosts in developing the websites and web-based products have been capitalized and consist of the following at December 31: 2010 2009 OptimizeRx web development $154,133 $154,133 SampleMD web development 332,107 107,700 Subtotal, web development costs 486,240 261,833 Less: Accumulated amortization (95,050) (64,223)Less: Impairment (59,083) 0 Web development costs, net $332,107 $197,610 The Company began amortizing the OptimizeRx website costs, using the straight-line method over the estimated useful life of 5 years, once it was put intoservice in December of 2007. During the year end December 31, 2009, the Company began a new web-based project and the related programming anddevelopment costs have been capitalized for the SampleMD website. The project was completed in mid-December 2010 and no amortization was recorded in2010. Amortization will begin on the straight-line method in January 2011 over the period of five years. The Company determined that the originalOptimizeRx website was no longer useful so the remaining unamortized balance of $59,083 was impaired as of December 31, 2010. Amortization expensewas $30,827 and $30,827 for the years ended December 31, 2010 and 2009, respectively.Note 6: Patent Rights and Intangible AssetsOn April 26, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for theSampleMD patent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party.The Company has capitalized costs in acquiring the SampleMD patent, which consisted of the following at December 31: 2010 2009 Patent rights and intangibleassets $930,000 $0 Less: Accumulated amortization (27,353) 0 Patent rights and intangibleassets, net $902,647 $0 The Company began amortizing the patent, using the straight-line method over the estimated useful life of 17 years, once it was put into service in July2010. Amortization expense was $27,353 and $0 for the years ended December 31, 2010 and 2009, respectively.Note 7: Accrued ExpensesAccrued expenses consisted of the following at December 31: 2010 2009 Accrued payroll taxes $700 $106 Accrued audit fees 5,000 4,500 Total accrued expenses $5,700 $4,606 F-9Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 8: Deferred RevenueThe Company has signed several contracts with customers for coupon redemptions on their website. The payments are not taken into revenue until the enduser redeems the coupon. The redemptions are tracked via their website and revenues are recorded as the coupons are redeemed. As of December 31, 2010,$225,720 has been recorded as deferred revenue.Note 9: Note PayableOn October 5, 2010, the Company issued a promissory note for $1,000,000. The note accrues interest at 6% per annum, compounded in April and Octobereach year and has a maturity date of September 12, 2012. No principal or interest payments are required until the maturity date. Accrued interest was $15,000as of December 31, 2010. The terms of the note also granted 1,000,000 stock warrants and 1,000,000 contingent stock warrants in connection with thefinancing. The non-contingent warrants were valued at $1,007,992 with $1,000,000 recorded as debt discount and $7,992 recorded as interest expense in thecurrent period. The company analyzed the assumptions associated with the contingent warrants and determined that the performance objectives were notlikely to occur in 2011. Therefore, no value was recorded for the contingent warrants. The debt discount derived from the warrant valuation of $1,000,000will be amortized over the life of the loan using the straight-line method and charged to interest expense. As of December 31, 2010, $83,333 had beenamortized with the remaining balance of $916,667 to be amortized through October 5, 2012.Note 10: Common StockOptimizeRx Corporation has 500,000,000 shares of $.001 par value common stock authorized as of December 31, 2010. There were 13,606,676 and12,826,117 common shares issued and outstanding at December 31, 2010 and 2009, respectively.During 2009, 284,000 shares were issued as compensation for services valued at $1,008,240. There were 365,908 shares issued in a cashless exchange ofcommon stock warrants during the year ended December 31, 2009.On March 11, 2010, the Company issued 12,000 shares of common stock for services valued at $27,960.On April 20, 2010, the Company issued 66,000 shares to board members for services valued at $130,680.Additionally on May 27, 2010, the Company issued 25,000 for services valued at $42,500.On September 27, 2010, the Company issued 100,000 shares of common stock for services valued at $100,000.On October 14, 2010, the Company issued 24,000 shares to a board member or advisory services valued at $30,000.During the year ended December 31, 2010, the Company issued 410,520 shares of common stock to satisfy $700,000 of preferred dividends.On February 19, 2010, 75,400 stock warrants were exercised for 43,039 shares of common stock in a cashless exchange.On May 19, 2010, 25,000 stock warrants were exercised for 25,000 shares of common stock for total proceeds of $8,750.On April 26, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for theSampleMD patent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party. F-10Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 11: Preferred StockSeries A PreferredDuring the year ended December 31, 2008, 35 preferred shares were issued for $3,500,000. Issuance costs totaled $515,000 resulting in net proceeds of$2,985,000. The 35 shares are convertible to 3,500,000 shares of common stock and bear a 10% cumulative dividend. In addition, there was a warrant issuedto purchase 6,000,000 shares of common stock at an exercise price of $2 for a period of seven years.The holders of the preferred stock are entitled to semi-annual dividends payable on the stated value of the Series A preferred stock at a rate of 10% per annum,which shall be cumulative, and accrue daily from the issuance date. The dividends may be paid in cash or shares of the Company's common stock atmanagement’s discretion. If after the conversion eligibility date, the market price for the common stock for any ten consecutive trading days in which thestock trades for over $2 per share and trading exceeds 100,000 shares per day, the preferred shareholders can be required to convert their shares to commonstock.Each share of Series A preferred stock shall also be convertible at the option of the holder into that number of shares of common stock of the Company at thestated value of such share at a $1 conversion price.The holder may cause this conversion at the time the shares are eligible for resale by the holder. The conversion price is subject to adjustment as hereinafterprovided, at any time, or from time to time upon the terms and in the manner hereinafter set forth in the shareholder agreement. There is no conversionexpiration date, however, the holder must provide thirty days’ notice for the registration of the conversion.On May 12, 2010, the Company’s Board declared and issued 236,598 common shares as payment for all cumulative and current semi-annual dividends. OnNovember 16, 2010, the Company’s Board declared and issued 173,922 common shares for its semi-annual dividend payment. As of December 31, 2010,there is an undeclared dividend of $110,274.Series B PreferredDuring the year ended December 31, 2010, 15 preferred shares were issued for $1,500,000. The 15 shares are convertible to 1,500,000 shares of commonstock and bear a 10% cumulative dividend. In addition, there was a warrant issued to purchase 2,000,000 shares of common stock at an exercise price of $3for a period of seven years.The preferred stock was issued for $1,500,000 less associated issuance costs of $350,000 for net proceeds of $1,150,000. Additionally, 3,000,000 commonstock warrants were issued with the preferred stock. Based on the fair values of the preferred stock and common stock warrants on the issue date, $341,100was allocated to preferred stock and $1,158,900 was allocated to the common stock warrants. Equity issuance costs of $350,000 were allocated to thepreferred stock.The holders of the preferred stock are entitled to semi-annual dividends payable on the stated value of the Series B preferred stock at a rate of 10% per annum,which shall be cumulative, and accrue daily from the issuance date. The dividends may be paid in cash or shares of the Company's common stock atmanagement’s discretion. If after the conversion eligibility date, the market price for the common stock for any ten consecutive trading days in which thestock trades for over $2 per share and trading exceeds 100,000 shares per day, the preferred shareholders can be required to convert their shares to commonstock. Each share of Series B preferred stock shall also be convertible at the option of the holder into that number of shares of common stock of the Companyat the stated value of such share at a $1.50 conversion price.The holder may cause this conversion at the time the shares are eligible for resale by the holder. The conversion price is subject to adjustment as hereinafterprovided, at any time, or from time to time upon the terms and in the manner hereinafter set forth in the shareholder agreement. As of December 31, 2010,there is an undeclared dividend of $85,993. F-11Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 11: Preferred Stock (continued)Series B Preferred (continued)In the event the Company has added at least 1,750 active physicians to the system, and added 35 brands, the Company may issue and sell at its option, andthe Purchaser agrees to purchase, up to 15 shares of the Company’s Series B Preferred Stock at a subsequent date, provided that the date cannot occur earlierthan November 1, 2010. If the conditions have not fulfilled prior to June 30, 2011, the Purchaser shall have no obligation to purchase any securities from theCompany.Note 12: Stock Options and WarrantsThe Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718: Compensation – Stock Compensation,which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based ontheir fair values. The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring,or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees. In accordance with ASCTopic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value ofthe services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equityinstrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.The Company issued 300,000 stock warrants in connection with non-employee services. The Company also issued 750,000 options as part of employmentagreements with various employees. The Company has accounted for these warrants as equity instruments in accordance with EITF 00-19 (ASC 815-40),Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, and as such, will be classified instockholders’ equity as they meet the definition of “…indexed to the issuer’s stock” in EITF 01-06 (ASC 815-40) The Meaning of Indexed to a Company’sOwn Stock. The Company has estimated the fair value of the options and warrants issued in connection with the non-employee services at $618,031, and theemployment agreements at $1,321,226, as of December 31, 2009 using the Black-Scholes option pricing model.The fair value of each option and warrant granted in 2009 is estimated on the date of grant using the Black-Scholes option-pricing model with the followingassumptions: dividend yield of 0%, expected volatility of 44% to 233%, risk-free interest rate of .04% to .15% and expected life of 60 months.During the year ended December 31, 2009, the Company exchanged 173,000 common stock warrants with an exercise price of $1 and 108,908 commonstock warrants with an exercise price of $2, for 365,908 shares of common stock in a cashless exchange. This exchange has been reflected in theStockholders' equity for 2009.On January 6, 2010, the Company issued 25,000 stock warrants for services to a consultant with an exercise price of $0.35. The warrants were valued on thegrant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 259%, risk-freeinterest rate of 2.6% and expected life of 60 months. The Company recognized consulting expense of $57,425.On June 4, 2010, the Company issued 3,000,000 stock warrants in connection with the preferred stock issuance with an exercise price of $3.00. The warrantswere valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of260%, risk-free interest rate of 2.65% and expected life of 84 months. The Company recorded the stock warrants valued at $5,096,472 in an equitytransaction. F-12Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 12: Stock Options and Warratns (continued)On July 1, 2010, the Company issued 100,000 stock warrants for services to a consultant with an exercise price of $2.50. The warrants were valued on thegrant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 241%, risk-freeinterest rate of 1.26% and expected life of 60 months. The Company recognized consulting expense of $129,000.On October 5, 2010, the Company issued 1,000,000 stock warrants and 1,000,000 contingent stock warrants in connection with the Company’s debtfinancing with an exercise price of $2.25. The warrants were valued on the grant date using the Black-Scholes option-pricing model with the followingassumptions: dividend yield of 0%, expected volatility of 241%, risk-free interest rate of 1.83% and expected life of 84 months. The non-contingent warrantswere valued at $1,007,992 with $1,000,000 recorded as debt discount and $7,992 recorded as interest expense in the current period. The company analyzedthe assumptions associated with the contingent warrants and determined that the performance objectives were not likely to occur in 2011. Therefore, no valuewas recorded for the contingent warrants. The Company recorded $83,333 of the debt discount as interest expense in 2010 with the remaining balance of$916,667 to be amortized over the remaining term of the loan. See Note 9.On April 26, 2010, the Company issued 200,000 stock options to acquire from an officer and shareholder the technical contributions and assignment of allexclusive rights to and for the SampleMD patent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of theseller in addition to 200,000 stock options with an exercise price of $1.81. The options were valued on the grant date using the Black-Scholes option-pricingmodel with the following assumptions: dividend yield of 0%, expected volatility of 262%, risk-free interest rate of 2.54% and expected life of 60 months.The Company capitalized $360,000 as patent rights for these options.On October 1, 2010, the Company issued 25,000 stock options to an employee with a vesting period of one year and an exercise price of $1.21. The optionswere valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of241%, risk-free interest rate of 1.26% and expected life of 60 months. The Company recognized share-based compensation expense of $6,203 during the yearended December 31, 2010 with the remaining balance of $18,610 to be recognized in 2011.Note 13: Commitments and ContingenciesThe Company leases their offices for $2,500 a month on a month-to-month rental.Note 14: Related Party TransactionsThe Company had a note payable to an officer of the Company for $4,000 at December 31, 2008 that was repaid along with all accrued interest during theyear ended December 31, 2009.During the year ended December 31, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusiverights to and for the SampleMD patent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of the seller inaddition to 200,000 stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to therelated party. See Note 6, 11 and 13.Note 15: Major CustomersThe Company has two major customers that accounted for approximately 55% of revenues for the years ended December 31, 2010. The Company expects tocontinue to maintain these relationships with the customers. F-13Table of Contents OPTIMIZERx CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010Note 16: Income TaxesFor the year ended December 31, 2010, the Company incurred a net loss of approximately $2,009,000 and therefore has no tax liability. The Company beganoperations in 2007 and has previous net operating loss carry-forwards of $9,350,000 through December 31, 2009. The cumulative loss of approximately$11,359,000 will be carried forward and can be used through the year 2030 to offset future taxable income. In the future, the cumulative net operating losscarry-forward for income tax purposes may differ from the cumulative financial statement loss due to timing differences between book and tax reporting.The provision for Federal income tax consists of the following at December 31:Federal income tax benefitattributable to: 2010 2009 Current operations $683,000 $1,666,000 Less: valuation allowance (683,000) (1,666,000)Net provision for Federal incometax $0 $0 The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of December 31: 20102009Deferred tax asset attributable to: Net operating loss carryover$ 3,862,000$ 3,179,000Less: valuation allowance(3,862,000)(3,179,000)Net deferred tax asset$ 0$ 0Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $11,359,000 for Federalincome tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as touse in future years.Note 17: Going ConcernThe accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustainedsubstantial losses since inception.In view of this matter, the ability of the Company to continue as a going concern is dependent upon growth of revenues and the ability of the Company toraise additional capital. Management believes that its successful ability to raise capital and increases in revenues will provide the opportunity for theCompany to continue as a going concern.Note 18: Subsequent EventsIn accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to December 31, 2010 to March 25, 2011, the date thesefinancial statements were issued, and have determined that it does not have any material subsequent events to disclose in these financial statements. F-14Table of ContentsItem 9. Changes In and Disagreements with Accountants on Accounting and Financial DisclosureNo events occurred requiring disclosure under Item 307 and 308 of Regulation S-K during the fiscal year ending December 31, 2010. Item 9A(T). Controls and ProceduresEvaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in companyreports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the timeperiods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include without limitation, controls andprocedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated andcommunicated to management, including our chief executive officer and treasurer, as appropriate to allow timely decisions regarding required disclosure.As required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief executive officer and chief financial officer carried out an evaluation of theeffectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2010. Based on their evaluation, they concluded thatour disclosure controls and procedures were effective.Management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control over financial reporting is a process designed by, or under the supervision of, our chief executive officer andchief financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability ofour financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles.Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation ofour financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.Under the supervision and with the participation of our management, including our chief executive officer, we conducted an evaluation of the effectivenessof our internal control over financial reporting based on the criteria established in Internal Control – Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation under the criteria established in Internal Control – IntegratedFramework, our management concluded that our internal control over financial reporting was effective as of December 31, 2010.This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and ExchangeCommission that permit us to provide only management’s report in this annual report.During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected or isreasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other InformationNone 21Table of Contents PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceThe following information sets forth the names, ages, and positions of our current directors and executive officers as of December 31, 2010.NameAgePosition(s) and Office(s) HeldDavid Lester53President, Chief Executive Officer,Secretary and DirectorDavid A. Harrell45Chairman and DirectorTerence J. Hamilton45Director and VP of SalesShad Shastney42DirectorSet forth below is a brief description of the background and business experience of each of our current executive officers and directors.David LesterMr. Lester is a business veteran whom has accumulated over thirty years of executive experience in the areas of business, marketing, sales, operations,technology, and leadership. Prior to accepting his new role with us, Mr. Lester held the title of Director, Consumer & Industrial Products Marketing forDeloitte LLP. During his tenure at Deloitte, he established Deloitte as a leader through innovative programs and strategic partnerships. Prior to Deloitte, heworked with Sun Microsystems as Director, Industry Strategy & Marketing, and Manufacturing Industries.David Lester has worked with Governor Tommy Thompson, former Secretary of Health & Human Services, on health care reform and cost control; partneredwith Governor Tom Ridge, former head of Homeland Security on defending cyber security initiatives; and as a active participant within the NationalAssociation of Manufacturers and the Manufacturing Institute worked with former Michigan Governor John Engler, now President of the NationalAssociation of Manufacturers, on challenges inhibiting the competitiveness of manufacturers like health care reform, trade policy, renewable energy,business tax reform, and sustainability.David A. HarrellMr. Harrell founded the Company in January of 2006 and has served as our President and Chief Executive Officer. He became a director when the Companychanged from a limited liability to a corporation in 2007. Mr. Harrell was the Vice President of Development for Meridian Incorporated from 2003-2005 and,prior to that, had been Vice President of Sales and Marketing since 1999 at Advance Graphic Systems. Mr. Harrell has spent two decades leading sales,marketing and business development units within the pharmaceutical and national retail industries. Prior to his work at Advance Graphic Systems, Mr. Harrellserved for ten years at SmithKline Beecham, specializing in the managed markets healthcare segment. As part of the Integrated Health Division, Mr. Harrellwas responsible for contracting and achieving regional revenue growth for SmithKline Beecham's four business units: Pharmaceuticals, Consumer Health,Clinical Labs and Diversified Pharmaceutical Services (PBM). During his tenure with SmithKline Beecham, he was a recipient of numerous national awardsand served as a member of the Division's Strategic Planning Committee. Mr. Harrell graduated from Oakland University with a Bachelor of Science inBusiness Administration.Terence J. Hamilton Mr. Hamilton joined the Company as a Director and VP of Sales in February 2008. Prior to that, Mr. Hamilton was Manager at MedImmune since 2005 andwas Senior National Account Manager for Glaxo SmithKline pharmaceuticals for 13 years prior to that. Mr. Hamilton has spent the last 19 years working inthe pharmaceutical and biotech arenas within various sales, marketing and managed markets management positions. He also has held many positions withinthe pharmaceutical and biotech industries, including District Manager, Brand Manager, Managed Market Specialist, Contract Manager, Government AccountManager.Shad ShastneyMr. Stastney is a member of and the chief operating officer for Vicis Capital, LLC, a company he jointly founded in 2004. Mr. Stastney also jointly foundedVictus Capital Management LLC in 2001. From 1998 through 2001, Mr. Stastney worked with the corporate equity derivatives origination group of CreditSuisse First Boston, eventually becoming a Director and Head of the Hedging and Monetization Group, a joint venture between derivatives and equitycapital markets. In 1997, he joined Credit Suisse First Boston’s then-combined convertible/equity derivative origination desk. From 1994 to 1997, he was anassociate at the law firm of Cravath, Swaine and Moore in New York, in their tax and corporate groups, focusing on derivatives. He graduated from theUniversity of North Dakota in 1990 with a B.A. in Political Theory and History, and from the Yale Law School in 1994 with a J.D. degree focusing oncorporate and tax law. 22Table of Contents DirectorsOur bylaws authorize two (2) directors unless changed by the Board of Directors. The board has since changed the number of directors authorized, and wecurrently have four (4) Directors.Term of OfficeOur Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office inaccordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.Significant EmployeesWe have no significant employees other than our officers and directors.Family RelationshipsThere are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executiveofficers. Involvement in Certain Legal ProceedingsTo the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director, executive officer,or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer eitherat the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminalproceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed,suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or herinvolvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), theSEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not beenreversed, suspended or vacated. Audit CommitteeWe do not have a separately-designated standing audit committee. The entire board of directors performs the functions of an audit committee, but no writtencharter governs the actions of the board of directors when performing the functions of that would generally be performed by an audit committee. The board ofdirectors approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related tofinancial reporting. In addition, the board of directors reviews the scope and results of the audit with the independent accountants, reviews with managementand the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditingand accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor.We do not have an audit committee financial expert because of the size of our company and our board of directors at this time. We believe that we do notrequire an audit committee financial expert at this time because we retain outside consultants who possess these attributes as needed.For the fiscal year ending December 31, 2010, the board of directors:1. Reviewed and discussed the audited financial statements with management, and2. Reviewed and discussed the written disclosures and the letter from our independent auditors on the matters relating to the auditor's independence.Based upon the board of directors’ review and discussion of the matters above, the board of directors authorized inclusion of the audited financial statementsfor the year ended December 31, 2010 to be included in this Annual Report on Form 10-K and filed with the Securities and Exchange Commission. 23Table of Contents Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered classof the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equitysecurities of the Company. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies ofall Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us,the following persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year endedDecember 31, 2010: Name and principal positionNumber oflate reportsTransactions nottimely reportedKnown failures tofile a required formDavid LesterCEO and Director000David A. HarrellChairman and Director010Thomas E. MajerowiczFormer Secretary and Director000Terence J. HamiltonVP of Sales and Director000Shad ShastneyDirector100Code of EthicsAs of December 31, 2010, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principalfinancial officer, principal accounting officer or controller, or persons performing similar functions. 24Table of Contents Item 11. Executive CompensationSummary Compensation Table The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended December31, 2010 and 2009.SUMMARY COMPENSATION TABLENameandprincipalpositionYearSalary($)Bonus($)StockAwards($)OptionAwards($)Non-EquityIncentivePlanCompensation($)NonqualifiedDeferredCompensationEarnings($)All OtherCompensation($)Total ($)David Lester(1)President, CEOand Director20092010150,000164,375 -11,000 -32,580 552,343(2)--- -- -- 702,343207,955Thomas E.MajerowiczFormerSecretary 20092010 -- 12,240(2)30,000 ---- -- -- 12,24030,000Terence J.HamiltonVP of Salesand Director(4) 20092010 123,500164,375-25,500 -43,440461,330(2)--- -- -- 584,830233,315David Harrell,Chairman andDirectorFormerPresident andCEO(5) 20092010 152,000165,640 70,00020,500 -43,440 307,553(2)360,000(2)-- -- -- 529,553589,580 Mr. Lester has held office as our Chief Executive Officer since April 1, 2009.(2) This amount reflects the dollar amount recognized for financial statement reporting purposes for the fiscal year indicated in accordance with SFASNo. 123R, Share Based Payments of awards of restricted stock and stock options, as applicable.(3) Supplement.(4) Mr. Hamilton has held office as our VP of Sales since March 1, 2007.(5) Mr. Harrell has held office as our Chairman since April 2008.Narrative Disclosure to the Summary Compensation Table On April 6, 2009, we entered into an employment agreement with Mr. Lester to serve as our Chief Executive Officer. Under the agreement, we agreed tocompensate Mr. Lester $150,000 annually and we granted him options to purchase 500,000 shares of our common stock, with 25% vesting immediately and25% vesting after the completion of each quarter of hire. Mr. Lester is also eligible for additional quarterly and annual bonus compensation, stock options,and stock grants based on performance metrics outlined by our board of directors. He is entitled to vacation and sick days, and other benefits included in theagreement.On August 1, 2008, we entered into an employment agreement with Mr. Hamilton to serve as our VP of Sales. Under the agreement, we agreed to compensateMr. Hamilton $120,000 annually and we granted him options to purchase 150,000 shares of our common stock in 2009. Mr. Hamilton is also eligible foradditional quarterly and annual bonus compensation, stock options, and stock grants based on performance metrics outlined by our board of directors. He isentitled to vacation and sick days, and other benefits included in the agreement. On March 18, 2010, we entered into an addendum to the employmentagreement to increase his compensation to $150,000 annually.On June 1, 2008, we entered into an employment agreement with Mr. Harrell to serve as our CEO. Mr. Harrell is no longer our CEO, but will be our Chairmanand we intend to enter into an employment agreement with him in that capacity in the near future. The terms of his compensation as our CEO, which is still ineffect, are an annual salary of $144,000 with a 5% cost of living increase on each 12 month anniversary. Mr. Harrell is also eligible for additional quarterlyand annual bonus compensation, stock options, and stock grants based on performance metrics outlined by our board of directors. He is entitled to vacationand sick days, and other benefits included in the agreement. On March 18, 2010, we entered into an addendum to the employment agreement to increase hiscompensation to $152,004 annually. 25Table of Contents Outstanding Equity Awards at Fiscal Year-EndThe table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officers as ofDecember 31, 2010.OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-ENDOPTION AWARDSSTOCK AWARDS Name Number ofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable EquityIncentive PlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions(#) OptionExercise Price ($) OptionExpirationDate NumberofSharesor UnitsofStock ThatHaveNotVested(#) MarketValueofSharesorUnitsofStockThatHaveNotVested($) EquityIncentive PlanAwards: NumberofUnearned Shares,Units orOtherRightsThat Have NotVested(#)EquityIncentivePlanAwards:Market orPayoutValue ofUnearnedShares,Units orOtherRightsThatHave Not Vested(#)David Lester,President CEO,CFO and Director375,000125,000 $0.35(1)$0.35(1)10/1/1412/22/14 Thomas E.MajerowiczFormer Secretary David Harrell,Chairman, FormerPresident andCEO100,000200,000 $1.00$1.813/5/144/26/15 Terence J.HamiltonVP of Sales 150,000 $1.003/5/14 (1) These are warrants that were revalued on October 1, 2009 to $0.35 per share.The table below summarizes all compensation of our directors as of December 31, 2010.DIRECTOR COMPENSATION Name Fees EarnedorPaid inCash($) StockAwards($) OptionAwards($)Non-EquityIncentivePlanCompensation($)Non-QualifiedDeferredCompensationEarnings($) AllOtherCompensation($) Total($)Shad Shastney7,200------ 26Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and RelatedThe following table sets forth certain information known to us with respect to the beneficial ownership of our Common Stock as of December 31, 2010, by (1)all persons who are beneficial owners of 5% or more of our voting securities, (2) each director, (3) each executive officer, and (4) all directors and executiveofficers as a group. The information regarding beneficial ownership of our common stock has been presented in accordance with the rules of the Securitiesand Exchange Commission. Under these rules, a person may be deemed to beneficially own any shares of capital stock as to which such person, directly orindirectly, has or shares voting power or investment power, and to beneficially own any shares of our capital stock as to which such person has the right toacquire voting or investment power within 60 days through the exercise of any stock option or other right. The percentage of beneficial ownership as to anyperson as of a particular date is calculated by dividing (a) (i) the number of shares beneficially owned by such person plus (ii) the number of shares as towhich such person has the right to acquire voting or investment power within 60 days by (b) the total number of shares outstanding as of such date, plus anyshares that such person has the right to acquire from us within 60 days. Including those shares in the tables does not, however, constitute an admission thatthe named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, each person or entity named in the table has solevoting power and investment power (or shares that power with that person’s spouse) with respect to all shares of capital stock listed as owned by that personor entity.Except as otherwise indicated, all shares are owned directly and the percentage shown is based on 13,606,676 shares of common stock issued andoutstanding on December 31, 2010. Except as otherwise indicated, the address of each person named in this table is c/o OptimizeRx Corporation, 407 SixthStreet, Rochester, MI 48307. Title of className and addressof beneficial ownerAmount ofbeneficial ownershipPercentof class Executive Officers & Directors:CommonDavid Lester(1)518,000 shares3.67%CommonDavid A. Harrell(2)3,436,250 shares27.70%CommonTerence J. Hamilton(3)619,500 shares4.50%CommonShad Shastney0 shares0%Total of All Directors and Executive Officers:4,573,750 shares31.42%More Than 5% Beneficial Owners:CommonCypress Trust(4)1,150,000 shares8.45%CommonVicis Capital Master Fund(5)9,910,520 shares42. 89% (1)Includes 18,000 shares held in his name and warrants to purchase 500,000 shares of common stock at a price of $0.35 pershare.(2)Includes 3,136,250 shares held in his name, options to purchase 100,000 shares of common stock at a price of $1.00 pershare, and options to purchase 200,000 shares of common stock at $1.81 per share.(3)Includes 469,500 shares held in his name and options to purchase 150,000 shares of common stock at a price of $1.00 pershare.(4)Linwood C. Meehan III has voting and dispositive control over the shares held by Cypress Trust, which is located at 13750W. Colonial Dr., Ste. 250-317, Winter Garden, Florida 34787.(5)Chris Phillips holds investment and dispositive power of the shares held by Vicis Capital Master Fund. Shares beneficiallyowned represent an aggregate of 9,910,520 shares of Common Stock, consisting of (i) 410,520 shares held; (ii) 3,500,000shares issuable upon the conversion of the Series A Preferred Stock; and (iii) 6,000,000 shares issuable upon the exercise ofthe Series A Warrants. The selling stockholder has informed us that it is not a broker-dealer or affiliate of a broker-dealer. 27Table of Contents Item 13. Certain Relationships and Related Transactions, and Director IndependenceExcept as follows, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns,directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family(including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction sincethe beginning of our last fiscal year on January 1, 2009 or in any presently proposed transaction which, in either case, has or will materially affect us.§ Please refer to the section titled Executive Compensation.§ We engaged David Harrell for management services under a contract that paid him $48,000 for the period ended April 30, 2008 and $114,500 for theyear ended December 31, 2008. Mr. Harrell became an employee of our company beginning on June 1, 2008.§ Upon the transfer of the assets and liabilities from the Optimizer Systems, LLC to OptimizeRx Corporation, the LLC members were issuedpromissory notes totaling $253,750 under a dilution agreement for a portion of their interests in Optimizer Systems, LLC, except for David Harrell,our director. Under the exchange agreement, dated April 8, 2008, Mr. Harrell is entitled to the same benefits other LLC members received, onlyagainst our company in exchange for waiving his anti-dilution rights.§ There was a note to David Harrell for $4,000 and $24,000 at December 31, 2008 and 2007, respectively.Item 14. Principal Accounting Fees and ServicesBelow is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for theyears ended:Financial Statements for the Year EndedDecember 31Audit ServicesAudit Related FeesTax FeesOther Fees2009$23,981$0$0$02010$24,650$0$0$0 28Table of Contents PART IVItem 15. Exhibits, Financial Statements Schedules(a) Financial Statements and SchedulesThe following financial statements and schedules listed below are included in this Form 10-K.Financial Statements (See Item 8)(b) ExhibitsExhibitNumber Description3.1Articles of Incorporation of OptimizeRx Corporation (the “Company”)1.3.2Amended and Restated Bylaws of the Company1.3.3Certificate of Designation, filed on September 5, 2008, with the Secretary of State of theState of Nevada by the Company1.21.1List of Subsidiaries123.1 Consent of Independent Registered Public Accounting Firm31.1Section 302 Certification of Principal Executive Officer32.2Section 302 Certification of Principal Financial Officer32.1Section 906 Certification of Principal Executive Officer and Principal Financial Officer 1Incorporated by reference to the Form S-1, filed by the Company with the Securities and Exchange Commission on November 12, 2008. 29Table of Contents SIGNATURESIn accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto dulyauthorized. OptimizeRx CorporationBy:/s/ David Lester David LesterChief Executive Officer, Principal Executive Officer,Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director March 31, 2011In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated:By: By:/s/ David Harrell /s/ Terence J. HamiltonDavid Harrell Terence J. HamiltonDirector DirectorMarch 31, 2011 March 31, 2011By:/s/ Shad ShastneyShad ShastneyDirectorMarch 31, 2011Silberstein Ungar, PLLC CPAs and Business Advisors Phone (248) 203-0080Fax (248) 281-094030600 Telegraph Road, Suite 2175Bingham Farms, MI 48025-4586www.sucpas.comMarch 31, 2011CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard of DirectorsOptimizeRx CorporationRochester, MITo Whom It May Concern:Silberstein Ungar, PLLC hereby consents to the use in the Form 10-K, Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934, filedby OptimizeRx Corporation of our report dated March 30, 2011, relating to the consolidated financial statements of OptimizeRx Corporation, a NevadaCorporation, as of and for the years ending December 31, 2010 and 2009.Sincerely,/s/ Silberstein Ungar, PLLCSilberstein Ungar, PLLCBingham Farms, MICERTIFICATIONSI, David Lester, certify that; 1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2010 of OPTIMIZERx Corp (the “registrant”); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: March 31, 2011 /s/ David LesterBy: David LesterTitle: Chief Executive OfficerCERTIFICATIONSI, David Lester, certify that; 1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2010 of OPTIMIZERx Corp (the “registrant” 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: March 31, 2011 /s/ David LesterBy: David LesterTitle: Chief Financial OfficerCERTIFICATION OF CHIEF EXECUTIVE OFFICER ANDCHIEF FINANCIAL OFFICERPURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the annual Report of OPTIMIZERx Corp (the “Company”) on Form 10-K for the year ended December 31, 2010 filed with the Securitiesand Exchange Commission (the “Report”), I, David Lester, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the datespresented and the consolidated result of operations of the Company for the periods presented. By: /s/ David Lester Name: David Lester Title: Principal Executive Officer,Principal Financial Officer and Director Date: March 31, 2011This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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