OptimizeRx
Annual Report 2013

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 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, 2013 [ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ________ Commission file number: 000-53605 OptimizeRx Corporation(Exact name of registrant as specified in its charter)Nevada26-1265381(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.) 400 Water Street, Ste. 200Rochester, MI 48307(Address of principal executive offices)(Zip Code) Registrant’s telephone number: 248-651-6568 Securities registered under Section 12(b) of the Exchange 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 $0.001 Indicate 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 preceding 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 preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). Yes [X] No [ ] 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. [ ] Large accelerated filer[ ] Accelerated filer[ ] Non-accelerated filer[X] Smaller reporting company 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. $15,276,153 Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 22,809,586 common shares asof March 31, 2014 Table of ContentsTABLE OF CONTENTS PagePART I Item 1.Business3Item 2.Properties4Item 3.Legal Proceedings7Item 4.Mine Safety Disclosures7 PART II Item 5.Market for Registrant’s Common Equity and Related Stockholder Matters and IssuerPurchases of Equity Securities7Item 6.Selected Financial Data9Item 7.Management’s Discussion and Analysis of Financial Condition and Results ofOperations9Item 7A.Quantitative and Qualitative Disclosures About Market Risk10Item 8.Financial Statements and Supplementary Data10Item 9.Changes In and Disagreements With Accountants on Accounting and FinancialDisclosure11Item 9A.Controls and Procedures11Item 9B.Other Information11 PART III Item 10.Directors, Executive Officers and Corporate Governance12Item 11.Executive Compensation15Item 12.Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters18Item 13.Certain Relationships and Related Transactions, and Director Independence18Item 14.Principal Accountant Fees and Services18 PART IV Item 15.Exhibits, Financial Statement Schedules19 2Table of ContentsPART IItem 1. BusinessCompany Overview OPTIMIZERx finished the fourth quarter with revenues of $1,810,610 bringing revenue for fiscal 2013 to a total of $4,957,016, an increase of 149% over2012. We achieved net income of $215,847 for the year. Our year end also recognizes a onetime adjustment relative to our cost of goods sold and reflects achange in accounting procedures for these expenses. Prior reporting was based upon how the revenue share expenses were paid per the agreements held withOPTIMIZERx’s channel partners. The change in accounting process will now accrue the expense as it is incurred. Our continued growth in revenues is again primarily driven by our SampleMD content delivery solution. During the 2013 fiscal year, OPTIMIZERxdelivered some 1,122,589 new ePrescriptions with co-pay coupons or free sample vouchers helping patients more affordably start and stay on their prescribedmedications. We continue to be very enthusiastic about our growth and the state of our core business. OPTIMIZERx continues to be resilient in growing our businessthroughout the year and is a . Its a testament to the core employee base and the dedication of its management and employees alike to move the organizationforward. We have gained the confidence of pharmaceutical manufacturers and partners, and continue to add new clients and partners that increases ouroffering portfolio and expands our network reach. During the second half of the year we have initiated a major tgechnology undertaking to develop SampleMD 2.0. This effort is focused on moving ourtechnology from flash to HTML 5 based that will improve our response times and user interfaces and offer infinite scalability to support our expected growth.Additionally, this work focuses on building modularity for ease of adding new features and functions to the core solution while simplifying the integrationprocess with future partners and other solution providers. On top of building out our updated software solution, we are also updating our infrastructure byreplacing and updating our computers in a high availability environment, taking greater precautions for security and building out the architecture tofacilitate disaster recovery with a secondary facilitated computer environment. This investment will increase performance, simplify integrations, insureavailability and protect the investments of our shareholders. It is anticipated that the release of SampleMD 2.0 be fully implemented by April 2014. Initial market reaction to the OPTIMIZERx announcement of its emerging OPTIMIZEHR consulting practice has been very positive as we have engaged inour first two (2) major pharmaceutical manufacture EHR strategy initiatives (pilot projects). Coordinating efforts with our strategic partners, we havecollaborated to deliver sound strategy for each of these manufacturers. These efforts have resulted in ongoing and growing commitments by these clients withnew and expanded contracts. OPTIMIZERx will continue to work with its partners in building out this practice as more clients are interested in Drug FileIntegration, Sales Force Training and Strategy. Additionally, we are expanding our partnership with WPP and have completed account sales training of Grey Health account personnel to resell our services.We are also working with their other agencies, including Sudler, who have expressed a strong interest in additionally collaborating to sell and develop newservices. The partnership has also been highly received by the pharmaceutical and EHR industries. The results of our efforts are reflected in the growth and record revenues experienced during 2013 despite overcoming growth challenges presented in theyear. The company remained very resilient and with the dedication of the employees and management, these challenges were overcome and the companyremained profitable for the year and continued to generate cash from operations. Going forward into the New Year, we continue to drive our three primary messages to the pharmaceutical industry: 1)SampleMD has the largest capacity to deliver targeted promotional and incentive messaging to physicians at point of prescription throughinteroperability with multiple disparate electronic health platforms; and 2)Electronic health platforms (EMRs, eRx, Patient Portals) are the most cost-effective way to reach physicians and patients, as opposed to external websites that have been traditionally the focus of their non-rep marketing, and should therefore be an increasing focus for all pharmaceutical marketingdollars. 3)Pharmaceutical brands must move their Financial and Educational Support programs into the physicians ePrescribe workflow to increaseprescriptions and fill rates. Samples are continuing to be restricted, as are pharmaceutical reps regular access and this is the most effective alternativechannel with demonstrated strong ROI. In summary, we remain committed to working with top organizations to provided better affordability and access to healthcare for the patients we serve. Toachieve this, we will continue to work with leading providers in partnering to provide simple to use solutions. As compliance and regulatory requirements(i.e. meaningful use) continue to surround healthcare providers, OptimizeRx continues through its partnerships and internal R&D to become the “HUB” forproviding access to these ease-of-use solutions. With these continued efforts, we believe that SampleMD continues to be regarded as the innovative industry leader, setting the standards within this newfrontier of digital EMR solution marketing for patient care. 3Table of ContentsPrincipal Products and Applications Our principal products and applications can be summarized as follows: §SampleMD - Today, almost 60% of doctors’ offices ban or limit drug representatives and the samples they offer. Although samples are still valuable,many healthcare systems and doctors are looking for an easier, more effective way to increase affordable access and adherence to their prescribedbranded medications which led us during the past year to develop our direct to physician solution called SampleMD. §SampleMD is a revolutionary virtual "Patient Support Center" that allows doctors and staff to access a universe of sample vouchers, co-pay couponsand other patient support through their EMR and/or e-Prescribe systems to search, print or electronically dispense directly to patients and a nationalnetwork of pharmacies. SampleMD eliminates the need for physicians to manage and store physical drug samples by offering a more convenient andefficient way to allocate, administer and track samples and co-pay savings provided to their patients.§OPTIMIZEHR – Our consulting practice focused at educating and working with pharmaceutical manufacturers on identifying, formulating, andimplementing new eRx media strategies for promoting their product. Our consulting services include 1) Drug File Integration - a service to insurethat the manufacturers drug is present in every ePrescribing platform available, 2) Sales Force Training – a service to educate the extended field salesforce on this new integrated solution and what to look for within their client base to insure maximum exposure of their bands and 3) StrategyDevelopment – a service that assists manufactures in identifying and building a competitive strategy to take advantage of this new digital frontier. §OPTIMIZERx.com – Our Direct to Consumer WebSite is a portal to healthcare savings for patients to centrally review and participate in prescriptionand healthcare savings and support programs. To date, we have over 2.4 million members who have registered. We strive to provide all theinformation and guidance that patients undergoing long-term pharmaceutical treatments may require. Patients can search by their medication ortheir condition in order to access educational information regarding their condition, information regarding their medication, coupons for instantsavings when they purchase their medications, information on free drug trials, and guidance to any other savings programs available to them. Marketing and Sales We continue to extend our marketing efforts to build both brand and capabilities awareness to the market. As mentioned above, we continue to activelyparticipate in industry and partner events such as exlPharma and the ACE – Allscripts Users Conference as well as taking a lead sponsor position in theinaugural CBInet eRx and EHR conference in March of 2014. During the course of the year, we also initiated and delivered successful email marketingcampaigns, webinar with CMI Compass on What Physicians want within their HER’s, as well as successful public relations and press release communicationsinitiatives. We ran advertising campaigns through Pharma Exec magazine that netted several responses and qualified leads. In 2013, we also announced our strategic partnership with WPP/Grey Health Group, a leading agency within the healthcare marketplace. We plan to continueto increase our marketing efforts with all of our strategic partners, as we intend to continue to promote OPTIMIZERx and SampleMD primarily through thefollowing: §Industry and Partner Events;§Email Campaigns;§Internet Marketing;§Public Relations Campaigns;§Physician Offices;§Direct to Consumer Marketing;§Trade Media Advertising;§Pharmacy Partners;§Physician Organizations and Associations; and§Strategic Relationships Additionally, we have attracted and hired a highly seasoned Sales and Marketing Executive who has decades of global pharmaceutical marketing and salesexperience at AstraZeneca and others as our Eastern Vice President of Sales. 4Table of ContentsResearch and Development We continue to invest in our technology and plan to release SampleMD 2.0 in 2014. This new and improved release will enhance the performance of our firstversion through quicker response times, easier integration to platform partners, modularity for the addition of new features and functions and an entirelyupdated user interface to speed and enhance the setup of new programs and campaigns. We will continue to offer reporting portal access to our clients with anew and improved user interface and updated reporting capabilities for monitoring program and campaign performance.The SampleMD 2.0 release will also be supported by a new and updated infrastructure that is a high availability clustered environment with remote disasterrecovery enabling us to be back up and running from the worst facility catastrophe in very short order.We continue our commitment to educate both our direct and our extended teams through an understanding of all market dynamics that have the potential toaffect our business in both the short and long term. Our primary goal is to help patients better afford and access the medicines their doctors prescribe, as wellas other healthcare products and services they need. Based on this goal, we continually seek better ways to meet this mission through the use of improvedtechnology, user feedback, and working closely with the pharmaceutical industry. We are continually seeking new ways we can engage the pharmaceuticalindustry to provide new support programs to patients in need of their products. At OPTIMIZERx, we are still keen on the opinions and input that we gain from all stakeholders by which our products and solutions cross. From theprescribing clinicians that utilize our solutions to add value to the patients they serve, to the partners we use to leverage their channels for distribution andpromotion of the services, we are able to greatly assist the pharmaceutical manufacturing clients that depend on our solutions to increase their brandawareness and assist patients in need of their offerings. This “Voice of the Stakeholder” is a mantra that we leverage in analyzing industry trends and marketshifts and identifying enhancements and new offerings through our SampleMD™ solution. This effort involves all of our officers and directors as part of ourcontinual research development team while monitoring new technologies, trends, services, and partnerships that can help us provide additional services andincreased value to the healthcare and pharmaceutical industries and to the patients they serve. Our technology roadmap for potential new solutions continues to grow as we continued to finalize the two development programs initiated this yearfeaturing a live chat or conversation between the health provider and product manufacturer or service, as well as a one click way to request a representativevisit. These solutions address major access barriers that limit doctors’ interaction with the manufacturer and allow the health system or provider to accessneeded information when they want it. As we are in collaboration with our partners, further content and information delivery solutions are being flushed outas we continue to integrate with new channels and partners Under the leadership of the Director of Technology and Director of Software Development, whom were added late in 2011 to strengthen our core technicalteam, we have added an additional developer and a technical intern while leveraging a new development partner in Simple eSolutions, whom providedvaluable architecture, system design and database management support on the SampleMD 2.0 effort. We also continued to work with the Engineering andInformation Technology department of Oakland University in Rochester Michigan. As the University has opened the doors of its new medical school, it alsobrings highly skilled technology and application developers whom possess a solid knowledge of medical industry IT requirements. Competition SampleMD has faced some competition based on the growth in the space primarily by Physicians Interactive. As noted, we have filed a patent infringementsuit against the company. The OptimizeRx.com website continues to compete in the highly competitive pharmaceutical and healthcare advertising industry that is dominated by largewell-known companies with established names, solid market niches, wide arrays of product offerings and marketing networks. Our largest competitorsinclude a variety of healthcare website publishers and networks that provide online advertising competition to OPTIMIZERx.com, including Quality Health,WebMD, McKesson, and Drugs.com. Despite these competitors, we do not have major competition in our space of the market. We have been experiencing a growing list of potential partnerswhom either have content that want to deliver through the SampleMD engine and network, or whom have complementary technology and want to integrateour solution as a channel partner, expanding the reach to clinicians for OPTIMIZERx. Intellectual Property In the fourth quarter of 2012, we were awarded a patent for our innovative SampleMD solution (US Patent No. 8,341,015). This award highlighted ourcontinued research and development efforts. The awarded claims cover our ability to electronically process, display and distribute eligible prescriptionsavings on the medications and therapies healthcare providers wish to prescribe for their patients. We have also recently submitted and will be preparingadditional filings to protect our intellectual property on forthcoming solutions that will further assist and support physicians, pharmacists and patients. In addition, we have hired Harness, Dickey & Pierce, a nationally ranked IP firm, to further expand and protect our intellectual property. Through them, wehave filed two additional patents on our technology. We also used the firm to file a patent infringement lawsuit against Physicians Interactive. Managementbelieves the current and expanding IP will allow us to continue being the leader in this rapidly growing space.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. 5Table of ContentsGovernment Regulation Fraud and Abuse Laws Anti-Kickback Statutes The 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 Laws Federal 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. Employees As of March 31, 2014, we had 13 employees in addition to 4 contracted programmers through our established relationship with Simple eSolutions a technicaland programming resources partner. Additionally we have one contracted business development individual targeting new EMR channel and pharma client. Subsidiaries We conduct our operations through our wholly-owned subsidiary, OptimizeRx Michigan. Item 2. Properties Currently, we do not own any real estate. Our principal executive offices are located at 400 Water Street, Suite 200, Rochester, Michigan, 48307. We haveentered into a 3 year lease for this 2,886 square foot facility, with a cost of approximately$5,049.25 per month. We believe that our properties are adequatefor our current needs, but growth potential may require larger facilities due to anticipated addition of personnel. We do not have any policies regardinginvestments in real estate, securities or other forms of property. 6Table of Contents Item 3. Legal Proceedings Aside 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 February 6, 2013, we filed a Complaint for Patent Infringement against Physicians Interactive Inc., Physicians Interactive Holdings,Inc. andSkyscape.com, in which we allege that one or more of those entities has infringed on United States Patent No. 8,341,015. As of September 30, 2013, thedefendants responded denying the assertions made in our Complaint, but no further action has occurred in the case.We recently learned of an action in New Jersey brought by Milton J. Wilson and the Milton Wilson 2000 Trust. Last November 2013, we were served noticethat we would be added as an additional party to the case titled Milton Wilson et al. v. Continental Capital Corporation, C-289-06, in the Superior Court ofNew Jersey. There is an existing default judgment of roughly $1,000,000 in the case. We are uncertain of the substance of the allegations lodged against theexisting defendants and now perhaps us, as we are likely now a party to the action. We intend to investigate and, if necessary, vigorously defend the matter.We hope to have more information in subsequent SEC filings. Item 4. Mine Safety Disclosures Not applicable. Fiscal Year Ending December 31, 2012Quarter Ended High $ Low $ December 31, 2012 1.61 0.85 September 30, 2012 1.85 0.43 June 30, 2012 1.35 0.75 March 31, 2012 1.23 0.53 Fiscal Year Ending December 31, 2013 Quarter Ended High $ Low $ December 31, 2013 1.65 0.91 September 30, 2013 1.80 0.88 June 30, 2013 1.91 1.12 March 31, 2013 1.42 0.96 PART II Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is quoted under the symbol “OPRX” on the OTCQB operated by OTC Markets Group, Inc. Only a limited market exists for our securities.There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell hissecurities in our company. The following tables set forth the range of high and low prices for our common stock for the each of the periods indicated as reported by the OTCQB. Thesequotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. On March 18, 2014, the last sales price per share of our common stock was $1.70.7Table of ContentsPenny Stock The 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 Stock As of March 31, 2014, we had 22,809,586 shares of our common stock issued and outstanding, held by 316 shareholders of record. Dividends We currently intend to retain future earnings for the operation of our business. We have never declared or paid cash dividends on our common stock, and wedo 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. Securities Authorized for Issuance under Equity Compensation Plans On June 13, 2013, our Board of Directors adopted the 2013 Equity Incentive Plan (the “Plan”). The purpose of the Plan is to attract and retain the bestavailable personnel for positions of substantial responsibility with us, to provide additional incentive to employees, directors and consultants, and topromote our success. Under the Plan, we may issue up to an aggregate total of 1,500,000 incentive or non-qualified options to purchase our common stock orstock awards. Equity Compensation Plans as of December 31, 2013 A B CPlan Category Number ofsecurities to beissued uponexercise ofoutstandingoptions,warrants andrights Weighted-averageexercise price ofoutstandingoptions, warrantsand right Number ofsecuritiesremainingavailable forfuture issuanceunder equitycompensationplans (excludingsecurities reflectedin column (A))Equity compensationplans approved bysecurity holders - - -Equity compensationplans not approvedby security holders 13,783,334 $2.42 — Total 13,783,334 $2.42 — 8Table of Contents Recent Sales of Unregistered SecuritiesOn August 14, 2013, we granted restricted stock awards under our 2013 Incentive Plan. Mr. David Harrell was awarded 121,875 shares of our common stockand Mr. Terry Hamilton was awarded 215,625 shares of our common stock. The restricted stock awards will vest 50% on the date six months and one day afterthe date of grant, and the remaining 50% one year after the first vesting date.On September 20, 2013, we entered into a Separation Agreement with Mr. Shad Stastney regarding the terms and conditions of his departure from ourcompany (the “Agreement”). Under the Agreement, among other things, we agreed to issue to Mr. Stastney 500,000 shares of our common stock, half now andthe rest by January 1, 2014.On March 17, 2014, we entered into a securities purchase agreement with accredited investors, pursuant to which we sold an aggregate of 8,333,333 shares ofthe Company’s common stock, par value $0.001 per share, for $1.20 per Share, or gross proceeds of $10,000,000. We issued warrants to purchase 804,139shares of our common stock with an exercise price of $1.20 per share and a term of 5 years to placement agents in the raise. These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention toacquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make aninformed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates withthe appropriate restrictive legend affixed to the restricted stock. Item 6. Selected Financial Data A 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 Operations Forward-Looking Statements Certain 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.” These forward-looking statementsgenerally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “willbe,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that aresubject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or theactual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects ona consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates,competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statementsand undue reliance should not be placed on such statements. Results of Operations for the Years Ended December 31, 2013 and 2012 Revenues Our total revenue reported for year ended December 31, 2013 was $4,957,016, an increase from $1,989,086 from the prior year. Our increased revenue for the year ended December 31, 2013 as compared with the prior year is a result of the continued viability of our SampleMD solutionand the setup and integration fees for pharmaceutical manufacturers whom are participating within this offering. The bulk of our revenue for the year endedDecember 31, 2013 came mainly from our core SampleMD solutions as opposed to our new consulting business. We expect revenues to increase on ourconsulting business for 2014. Operating Expenses Operating expenses increased to $2,973,990 for the year ended December 31, 2013 from $2,328,648 for the year ended December 31, 2012. Our majorexpenses for the year ended December 31, 2013 were salaries, wages and benefits of $1,319,712, professional fees of $552,824, stock-based compensation of$411,412, general and administrative expenses of $288,297, depreciation and amortization of $193,971, and consulting fees of $100,077. Our expensesincreased in 2013 as compared with 2012 largely as a result of salaries, wages and benefits, professional fees and stock-based compensation. We expect operating expenses to increase slightly, with the most increase coming as we will continue to add personnel to strengthen our operations, sales andmarketing efforts going forward. 9Table of Contents Net Loss Net income for the year ended December 31, 2013 was $215,847, compared to net loss of $ $454,553 for the year ended December 31, 2012. We believe that our company is starting to show real signs of improvement with positive income this year. With increased sales forecasted for next year, webelieve that we will achieve a small improvement to net income in 2014. Liquidity and Capital Resources As of December 31, 2013, we had total current assets of $2,696,978 and total assets in the amount of $4,008,020. Our total current liabilities as of December31, 2013 were $1,968,652. We had working capital of $728,326 as of December 31, 2013.Operating activities provided $1,132,628 in cash for the year ended December 31, 2013. Our revenue share payable of $1,103,084, stock-based compensationof $399,092, net income of $215,847 and depreciation and amortization of $193,791 were the primary components of our positive operating cash flow, offsetmainly by accounts receivable of $950,166.Investing activities used $298,648 during the year ended December 31, 2013 largely as a result of patent rights and website development costs.On March 17, 2014, we entered into a securities purchase agreement with accredited investors pursuant to which we sold an aggregate of 8,333,333 shares ofour common stock, par value $0.001 per share, for $1.20 per share, or gross proceeds of $10,000,000. We used $6,000,000 of the proceeds to exercise ouroption to redeem Vicis Capital Master Fund’s holdings in our company. The balance of the proceeds will be used for working capital. With the financing andcash on hand, we have sufficient cash to operate our business for the next twelve months. Off Balance Sheet Arrangements As of December 31, 2013, there were no off balance sheet arrangements. Critical Accounting Policies In 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 Pronouncements The 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 Risk A smaller reporting company is not required to provide the information required by this Item. Item 8. Financial Statements and Supplementary Data Index to Financial Statements Required by Article 8 of Regulation S-X: Audited Financial Statements: F-1Report of Independent Registered Public Accounting Firm;F-2Consolidated Balance Sheets as of December 31, 2013 and 2012;F-3Consolidated Statements of Operations for the years ended December 31, 2013 and 2012;F-4Consolidated Statement of Stockholders’ Equity as of December 31, 2013;F-5Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012; andF-6Consolidated Notes to Financial Statements. 10Table of ContentsSilberstein Ungar, PLLC CPAs and Business AdvisorsPhone (248) 203-0080Fax (248) 281-094030600 Telegraph Road, Suite 2175Bingham Farms, MI 48025-4586www.sucpas.com March 28, 2014 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of DirectorsOptimizeRx CorporationRochester, MI To 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 20, 2014, relating to the consolidated financial statements of OptimizeRx Corporation, a NevadaCorporation, as of and for the years ending December 31, 2013 and 2012. Sincerely, /s/ Silberstein Ungar, PLLC Silberstein Ungar, PLLC Bingham Farms, MI F-1Table of ContentsOPTIMIZERx CORPORATIONConsolidated Balance Sheet as ofDecember 31, 2013 and 2012 December 31, December 31, 2012 2013 (restated)ASSETS Current Assets Cash and cash equivalents $1,118,243 $284,263 Accounts receivable 1,566,964 616,798 Prepaid expenses 11,771 68,158 Total Current Assets 2,696,978 969,219 Property and equipment, net 15,057 20,685 Other Assets Patent rights, net 885,950 793,236 Web development costs, net 404,986 387,215 Security deposit 5,049 5,049 Total Other Assets 1,295,985 1,185,500 TOTAL ASSETS $4,008,020 $2,175,404 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable - trade $188,739 $54,693 Accounts payable - related party 570,000 570,000 Accrued expenses 12,000 6,000 Revenue share payable 1,193,661 90,577 Deferred revenue 4,252 49,252 Total Liabilities 1,968,652 770,522 Stockholders' Equity Preferred stock, $.001 par value, 10,000,000 shares authorized,65 shares issued and outstanding -0- -0- Common stock, $.001 par value, 500,000,000 sharesauthorized, 14,773,496 and 14,232,496 shares issued andoutstanding 14,773 14,232 Stock warrants 18,148,049 20,058,051 Additional paid-in-capital 8,726,708 6,164,666 Deferred stock compensation (233,942) -0- Accumulated deficit (24,616,220) (24,832,067)Total Stockholders' Equity 2,039,368 1,404,882 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,008,020 $2,175,404 The accompanying notes are an integral part of these financial statements. F-2Table of ContentsOPTIMIZERx CORPORATIONConsolidated Statements of Operations for the YearsEnded December 31, 2013 and 2012 For the For the year ended year ended December 31, December 31, 2012 2013 (restated) NET REVENUE $4,957,016 $1,989,086 REVENUE SHARE EXPENSE 1,767,425 115,360 GROSS MARGIN 3,189,591 1,873,726 EXPENSES Operating expenses (See Note 17) 2,973,990 2,328,648 INCOME (LOSS) FROM OPERATIONS 215,601 (454,922)OTHER INCOME (EXPENSE) Interest income 246 469 Interest expense -0- (100)TOTAL OTHER INCOME (EXPENSE) 246 369 INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 215,847 (454,553)PROVISION FOR INCOME TAXES -0- -0- NET INCOME (LOSS) $215,847 $(454,553)WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:BASIC 14,388,017 14,211,455 NET INCOME (LOSS) PER SHARE: BASIC $0.02 $(0.03)WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:DILUTED 14,713,017 14,211,455 NET INCOME (LOSS) PER SHARE: DILUTED $0.01 $(0.03) The accompanying notes are an integral part of these financial statements. F-3Table of ContentsOPTIMIZERx CORPORATIONConsolidated Statement of Stockholders’ Equity as ofDecember 31, 2013 PreferredStock Preferred Stock Common Stock CommonStock Stock AdditionalPaid-in Deferred Stock AccumulatedTotalStockholders’ Shares Amount Shares Amount Warrants Capital Compensation Deficit EquityBalance,January 1, 2012 65 $-0- 14,192,496 $14,192 $20,826,934 $5,125,558 $-0- $(24,377,514)$1,589,170Issuance ofstock options: to employees 150,367 150,367 forconsulting 75,098 75,098 Issuance ofcommon stock: for services 40,000 40 44,760 44,800 Reclassificationfor optionspreviouslyrecorded aswarrants (768,883) 768,883 -0- Net loss for theyear (restated) (454,553) (454,553) Balance,December 31,2012 (restated) 65 $-0- 14,232,496 $14,232 20,058,051 $6,164,666 $-0- $(24,832,067)$1,404,882Issuance ofstock options: to employees 7,720 7,720 forconsulting 70,961 (59,134) 11,827 Issuance ofcommon stock: for services 40,000 40 68,860 68,900 foremploymentseverance 500,000 500 504,500 (505,000) -0- for correctionof prior issue 1,000 1 (1) -0- Reclassifyexpiredwarrants (1,910,002) 1,910,002 -0- Expenseconsultingservices 330,192 330,192 Net income forthe period 215,847 215,847 Balance,December 31,2013 65 $-0- 14,773,496 $14,773 $18,148,049 $8,726,708 $(233,942)$(24,616,220)$2,039,368 The accompanying notes are an integral part of these financial statements. F-4Table of ContentsOPTIMIZERx CORPORATIONConsolidated Statements of Cash Flows for the YearsEnded December 31, 2013 and 2012 For the For the year ended year ended December 31, December 31, 2012 2013 (restated) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) for the period $215,847 $(454,553)Adjustments to reconcile net income (loss) to net cash provided by(used in) operating activities: Depreciation and amortization 193,791 187,104 Stock issued for services -0- 49,618 Stock options issued for services 19,547 40,007 Stock-based compensation 399,092 180,640 Bad debt expense -0- 6,923 Changes in: Accounts receivable (950,166) (151,851)Prepaid expenses 56,387 50,874 Accounts payable 134,046 (282,019)Revenue share payable 1,103,084 90,577 Accrued expenses 6,000 (60,000)Deferred revenue (45,000) (281,353)NET CASH PROVIDED BY (USED IN) OPERATINGACTIVITIES 1,132,628 (624,033)CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment -0- (2,230)Patent rights (150,588) -0- Web development costs (148,060) (48,640)NET CASH USED IN INVESTING ACTIVITIES (298,648) (50,870)NET INCREASE (DECREASE) IN CASH AND CASHEQUIVALENTS 833,980 (674,903)CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 284,263 959,166 CASH AND CASH EQUIVALENTS - END OF PERIOD $1,118,243 $284,263 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $-0- $-0- Cash paid for income taxes $-0- $-0- SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTINGAND FINANCING ACTIVITIES: Common stock issued for future services $233,942 $-0- The accompanying notes are an integral part of these financial statements. F-5Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 1 – NATURE OF BUSINESS Optimizer 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 April 14, 2008, RFID, Ltd., a Colorado corporation, consummated a reverse merger by enteringinto a share exchange agreement with the stockholders of OptimizeRx Corporation, pursuant to which the stockholders of OptimizeRx Corporationexchanged all of the issued and outstanding capital stock of OptimizeRx Corporation for 1,256,958 shares of common stock of RFID, Ltd., representing100% of the outstanding capital stock of RFID, Ltd. As of April 30, 2008, RFID’s officers and directors resigned their positions and RFID changed itsbusiness to OptimizeRx’s business. On April 15, 2008, RFID, Ltd.’s corporate name was changed to OptimizeRx Corporation. On September 4, 2008, amigratory merger was completed, thereby changing the state of incorporation from Colorado to Nevada, resulting in the current corporate structure, in whichOptimizeRx 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 patients. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis 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. 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. F-6Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fair Value of Financial InstrumentsThe fair value of cash, accounts receivable, prepaid expenses, patent rights, web development costs, accounts payable, accounts payable – related party,accrued expenses and deferred revenue approximates the carrying amount of these financial instruments due to their short-term nature. The fair value of long-term debt, which approximates its carrying value, is based on current rates at which the Company could borrow funds with similar remaining maturities. Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between marketparticipants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based onassumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value ofliabilities should include consideration of non-performance risk including our own credit risk. In addition to defining fair value, the disclosure requirements around fair value establish a fair value hierarchy for valuation inputs which is expanded. Thehierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair valuemeasurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in itsentirety. These levels are: Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similarinstruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can becorroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing theasset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models,and similar techniques. The Company’s stock options and warrants are valued using level 3 inputs. The carrying value of the Company’s financial assets and liabilities which consist of cash, accounts receivable, prepaid expenses, patent rights, webdevelopment costs, accounts payable, accounts payable – related party, accrued expenses and deferred revenue are valued using level 1 inputs. The Companybelieves that the recorded values approximate their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management’sopinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments. Accounts Receivable and Allowance for Doubtful AccountsAccounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the relatedrevenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors,including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation processrelated to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, whichmay impact the collectability of these receivables or reserve estimates. Bad debt expense was $0 and $6,923 for the years ended December 31, 2013 and2012, respectively. The allowance for doubtful accounts was $0 as of December 31, 2013 and 2012. F-7Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. Revenue Recognition and Revenue Share ExpenseAll revenue is recognized when it is earned. Revenues are generated either through the Company’s web-based activities, in which we earn revenue fromadvertising and lead generation activities, from our SampleMD activities by which we deliver eCoupons and eVouchers through a distribution network ofePrescribers and Electronic Health Record technology providers (channel partners), or from reselling services for other of our partners products thatcomplement our business. For our SampleMD business the company recognizes setup fees that are required for integrating client offerings and campaigns into the SampleMD contentdelivery system and network. Setup fees are recognized upon completion of the setup and launch of the client’s campaign within the SampleMD system. Asthe eCoupons and or eVouchers are distributed through the SampleMD platform and network of channel partners (a transaction), these transactions arerecorded and revenue is recognized. Revenue for transactions can be realized as cost per distribution or cost per redemption depending on the client contract.Additionally, the company also recognizes revenue for providing program performance reporting and maintenance, either by the company directly deliveringreports or by providing access to its online reporting portal that the client can utilize. These fees are administered monthly and recognized as recurringmonthly revenue. The company on occasion has also resold products and or services that are available through our channel partners, and that is complementary to our corebusinesses and client base. In these events net revenue is recognized as this is a commission based revenue split that the company recognizes. Based on the volume of transactions that are delivered through our channel partner network, we provide a revenue share to compensate the partner for theirpromotion of the campaign. Revenue shares are a negotiated percentage of the transaction fee depending upon if the revenue is generated throughdistributions and or redemptions and can also be specific to special considerations and campaigns. Traditionally, revenue share has been recognized between25% and 50% of the transaction value. See Note 18. 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 at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Estimates and assumptions have been made in determining the depreciable lives of such assets and the allowance fordoubtful accounts receivable. Actual results could differ from these estimates. Concentration of Credit RisksThe Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has notexperienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financialdifficulties.F-8Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Research and DevelopmentThe Company’s key members are part of a continual research 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 it serves. The Company seeks to educate team members through understanding of all market dynamics that have the potential to affect the business both short term andlonger term. The primary goal is to help patients better afford and access the medicines their doctor prescribes, 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 for patients needing their products. The Company is always seeking new services and solutions to offer. At thistime, the three current platforms provide robust opportunities and growth during the next five years. 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 included in the diluted earnings per share calculation for theyear ended December 31, 2013. They have not been included in the diluted earnings per share calculation for the year ended December 31, 2012 since theireffect 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 ofoperations, financial position or cash flow. NOTE 3 – PREPAID EXPENSES Prepaid expenses consisted of the following as of December 31, 2013 and 2012: 2013 2012Insurance $6,722 $6,437 Rent 5,049 5,049 Consulting 0 31,672 Legal 0 25,000 Total prepaid expenses $11,771 $68,158 F-9Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 4 – PROPERTY AND EQUIPMENT The Company owned equipment recorded at cost which consisted of the following as of December 31, 2013 and 2012: 2013 2012Computer equipment $22,360 $22,360 Furniture and fixtures 11,088 11,088 Subtotal 33,448 33,448 Accumulated depreciation (18,391) (12,763) Property and equipment, net $15,057 $20,685 Depreciation expense was $5,628 and $5,476 for the years ended December 31, 2013 and 2012, respectively. NOTE 5 – WEB-BASED TECHNOLOGY The Company has capitalized costs in developing their web-based technology, which consisted of the following as of December 31, 2013 and 2012: 2013 2012OptimizeRx web-based technology $154,133 $154,133 SampleMD web-based technology 602,517 602,517 SampleMD 2.0 web-basedtechnology 148,060 0 Subtotal, web-based technology 904,710 756,650 Accumulated amortization (440,641) (310,352)Impairment (59,083) (59,083) Web-based technology, net $404,986 $387,215 Amortization is recorded using the straight-line method over a period of five years. The Company is currently developing enhanced SampleMD web-basedtechnology and has capitalized $148,060. The development is currently in process. It was not completed at December 31, 2013. Accordingly, noamortization has been recorded. The development is expected to be completed in 2014. Amortization expense for the web-based technology costs was$130,289 and $126,923 for the years ended December 31, 2013 and 2012, respectively. NOTE 6 – PATENT AND TRADEMARKS 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 in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition 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 the related party. The Company has capitalized costs in purchasing and defending the SampleMD patent, which consisted of the following as of December 31, 2013 and 2012: 2013 2012Patent rights and intangible assets $930,000 $930,000 Patent defense costs 87,993 0 New patents and trademarks 62,595 0 Accumulated amortization (194,638) (136,764) Patent rights and intangibleassets, net $885,950 $793,236 F-10Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 6 – PATENT AND TRADEMARKS (CONTINUED) 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 July 2010.In 2013, the Company began incurring costs related to defense of the patent. These costs have been capitalized and will be amortized using the straight-linemethod over the remaining useful life of the original patent. Amortization expense was $57,874 and $54,705 for the years ended December 31, 2013 and2012, respectively. NOTE 7 – ACCRUED EXPENSES Accrued expenses at December 31, 2013 and 2012 consisted of amounts owed to the Company’s outside independent auditors for services rendered forperiods reported on in these financial statements. NOTE 8 – DEFERRED REVENUE The Company has signed several contracts with customers for either the distribution or redemption of coupons. The payments are not taken into revenue untileither the coupon is distributed to a patient or the coupon has been redeemed depending on the specific contract. The distributions and redemptions aretracked by the Company’s administrative tool. Additionally, customer setup contracts that have been paid in full are deferred until the Company hascompleted the obligations of the contacts. Deferred revenue was $4,252 and $49,252 as of December 31, 2013 and 2012, respectively. NOTE 9 – RELATED PARTY TRANSACTIONS 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. NOTE 10 – COMMON STOCK OptimizeRx Corporation has 500,000,000 shares of $.001 par value common stock authorized as of December 31, 2013. There were 14,773,496 and14,232,496 common shares issued and outstanding at December 31, 2013 and 2012, respectively. On June 1, 2012, the Company entered into a consulting agreement with North Coast Advisors, Inc. for various services. The Company agreed to issue 40,000shares of common stock as of the date of the contract. However, these shares were not issued until July 12, 2012. The Company also agreed to issue anadditional 40,000 shares every six months in alignment with the agreement renewal up to the two years of the agreement. The first 40,000 shares were valuedat the Company’s common stock price as of the date of the contract, which was $1.12/share and has been expensed. No additional shares were issued and theagreement was voided and replaced by a new agreement as noted below. On June 1, 2013, the Company entered into a consulting agreement with North Coast Advisors, Inc. for various services. The Company agreed to issue 20,000shares of common stock as of the date of the contract. The Company also agreed to issue an additional 20,000 shares every six months in alignment with theagreement renewal up to the two years of the agreement. The first 20,000 shares were valued at the Company’s common stock closing price as of the date ofthe contract, which was $1.945/share; and the second 20,000 shares were valued at the Company’s common stock closing price of $1.50/share on the date ofissuance, and have been expensed.F-11Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 10 – COMMON STOCK (CONTINUED) On September 20, 2013, the Company entered into a separation agreement that includes post-employment consulting services with a former officer. TheCompany agreed to issue 500,000 shares of common stock, 250,000 shares immediately and 250,000 by January 1, 2014. The first 250,000 shares have beenissued and the Company has recognized the entire issuance in the December 31, 2013 shares outstanding. The shares were valued at $505,000 and $174,808of that amount remains as deferred stock compensation as of December 31, 2013. NOTE 11 – PREFERRED STOCK Series A Preferred During 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 Companyat the stated 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 30 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. On March 25, 2011, theCompany’s Board declared and issued 176,768 common shares for its semi-annual dividend payment. On September 21, 2011, the Company's Board declaredand issued 156,306 common shares for its semi-annual dividend payment. The Company has undeclared dividends that were due in February and September2012 totaling $350,000 and undeclared dividends of $350,000 that were due in February and September 2013 for a total undeclared amount of $700,000 asof December 31, 2013. F-12Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 11 – PREFERRED STOCK (CONTINUED) Series B Preferred During the year ended December 31, 2010, 15 preferred shares were issued for $1,500,000. The 15 shares are convertible to 1,000,000 shares of commonstock and bear a 10% cumulative dividend. In addition, there was a warrant issued to purchase 3,000,000 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. During the quarter ended September 30, 2011, 15 preferred shares were issued to an investor for $1,500,000. The 15 shares are convertible to 1,000,000 sharesof common stock and bear a 10% cumulative dividend. In addition, there was a warrant issued to purchase 1,000,000 shares of common stock at an exerciseprice of $3 for a period of seven years. Based on the fair values of the preferred stock and common stock warrants on the issue date, $855,460 was allocated topreferred stock and $644,540 was allocated to the common stock warrants. See Note 12. 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. On March 25, 2011, the Company’s Board declared and issued 75,758 common shares for its semi-annual dividend payment. On September 21, 2011, theCompany's Board declared and issued 66,988 common shares for its semi-annual dividend payment. The Company has undeclared dividends that were due inFebruary and September 2012 totaling $150,000 and undeclared dividends of $150,000 that were due in February and September 2013 for a total undeclaredamount of $300,000 as of December 31, 2013. NOTE 12 – STOCK OPTIONS AND WARRANTS The 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. F-13Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 12 – STOCK OPTIONS AND WARRANTS (CONTINUED) 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. On May 31, 2011, the Company issued 285,000 stock options to 3 employees at an exercise price of $1.00. The options were valued on the grant date usingthe Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 218%, risk-free interest rate of 1.68%and expected life of 60 months. The total value of the options was $320,585. The options vest over one year. The Company recognized share-basedcompensation expense of $187,005 during the year ended December 31, 2011. The remaining balance of $133,580 was recognized over the first five monthsof 2012. During the quarter ended December 31, 2011, the Company issued 20,000 stock options to 2 employees at an exercise price of $1.00. The options werevalued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 204-205%, risk-free interest rate of 0.88-0.93% and expected life of 60 months. The total value of the options was $19,270. The options vest over one year. TheCompany recognized share-based compensation expense of $2,480 and $16,790 during the years ended December 31, 2012 and 2011, respectively. On November 21, 2011, the Company issued 100,000 stock options to an individual at an exercise price of $0.73. The options were valued on the grant dateusing the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 205%, risk-free interest rate of0.92% and expected life of 60 months. The Company recognized expenses of $91,811 and $8,346 during the years ended December 31, 2012 and 2011,respectively. During the quarter ended March 31, 2012, the Company issued 50,000 stock options to 4 non-employees at an exercise price of $0.89. The options werevalued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 198%,risk-free interest rate of 0.65% and expected life of 48 months. The total value of the options was $35,091. The options vest over 4 months. The Companyrecognized share-based compensation expense of $35,091 during the six months ended June 30, 2012. During the quarter ended December 31, 2012, the Company issued 25,000 stock options to a non-employee at an exercise price of $1.58. The options werevalued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 200%,risk-free interest rate of 0.67% and expected life of 60 months. The total value of the options was $40,007. The options vest over 1 year. The Companyrecognized share-based compensation expense of $31,672 and $8,335 during the years ended December 31, 2013 and 2012, respectively. On October 30, 2013, the Company issued 50,000 stock options to 6 employees at an exercise price of $1.00. The options were valued on the grant dateusing the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 171%, risk-free interest rate of1.30% and expected life of 60 months. The total value of the options was $46,322. The options vest over one year. The Company recognized share-basedcompensation expense of $7,720 during the year ended December 31, 2013. The remaining balance will be recognized during 2014. F-14Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 12 – STOCK OPTIONS AND WARRANTS (CONTINUED) On November 8, 2013, the Company issued 75,000 stock options to 2 non-employees at an exercise price of $1.00. The options were valued on the grant dateusing the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 171%, risk-free interest rate of1.42% and expected life of 60 months. The total value of the options was $70,961. The options vest over 1 year. The Company recognized share-basedcompensation expense of $11,827 during the three months ended December 31, 2013. The remaining balance of $59,134 has been recorded as deferred stockcompensation and will be recognized during 2014. The Company had the following options outstanding as of December 31, 2013: Number of Options Weighted averageexercise price Outstanding, January 1,2012 405,000 $1.01 Granted - 2012 75,000 1.17 Exercised - 2012 0 0 Expired – 2012 (455,000) (.98) Balance, December31, 2012 25,000 1.58 Granted – 2013 125,000 1.00 Exercised – 2013 0 0 Expired – 2013 (25,000) (1.58) Balance,December 31, 2013 125,000 $1.00 The Company had the following warrants outstanding as of December 31, 2013: Number of Warrants Weighted averageexercise price Outstanding, January 1,2012 14,344,434 $2.41 Granted - 2012 0 0 Exercised - 2012 0 0 Expired - 2012 0 0 Balance, December31, 2012 14,344,434 2.41 Granted - 2013 0 0 Exercised - 2013 0 0 Expired - 2013 (686,100) (2.71) Balance,December 31, 2013 13,658,334 $2.44 NOTE 13 – OPERATING LEASES The Company signed a lease for new office space on December 1, 2011 at an approximate rent of $5,000 per month. The new offices are in Rochester,Michigan. The lease is for three years with an option to renew for an additional two years at approximately $5,200 per month with six months advance noticeto exercise the option. Minimum annual rent is as follows for the initial term of the lease: Year ended December 31, 2014 $55,542 Total lease commitment $55,542 F-15Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 14 – MAJOR CUSTOMERS The Company had two major customers that accounted for 58% and two major customers that accounted for 52% of the Company’s revenues for the yearsended December 31, 2013 and 2012, respectively. The Company expects to continue to maintain these relationships with the customers. NOTE 15 – INCOME TAXES For the year ended December 31, 2013, the Company incurred net income of approximately $216,000 but has no tax liability. The Company beganoperations in 2007 and has previous net operating loss carry-forwards of approximately $13,934,000 through December 31, 2012. The cumulative loss ofapproximately $13,718,000 will be carried forward and can be used through the year 2033 to offset future taxable income. In the future, the cumulative netoperating loss carry-forward for income tax purposes may differ from the cumulative financial statement loss due to timing differences between book and taxreporting. The provision for Federal income tax consists of the following for the years ended December 31, 2013 and 2012: 2013 2012Federal income tax (expense)benefit attributable to: Current operations $(73,000) $155,000 Valuation allowance 73,000 (155,000) Net provision for federalincome tax $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, 2013 and2012: 2013 2012Deferred tax asset attributableto: Net operating loss carryover $4,665,000 $4,738,000 Valuation allowance (4,665,000) (4,738,000) Net deferred tax asset $0 $0 Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $13,718,000 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 16 – CONTINGENT LIABILITY On January 14, 2013, the Company hired a new CEO. The employment agreement required annual compensation of $175,000 that was to be accrued anddeferred until at least January 1, 2014. Additionally, the agreement required the issuance of 2,000,000 options with an exercise price of $1.00 for a term offive years. The options were not exercisable until at least January 1, 2014, and were only exercisable after reaching certain financial terms and conditions.Due to these restrictions, no accrual was made for the issuance of these options. On September 20, 2013, the Company entered into a separation agreement with the CEO. As part of the terms of the separation agreement, the accruedcompensation up to the date of separation was paid and the options were terminated. F-16Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 17 – OPERATING EXPENSES Operating expenses consisted of the following for the years ended December 31, 2013 and 2012, respectively: Years endedDecember 31, Years endedDecember 31, 2013 2012Advertising $47,105 $57,218 Professional fees 552,824 263,396 Consulting 100,077 19,148 Salaries, wages and benefits 1,319,712 1,184,367 Rent 60,592 62,362 Depreciation and amortization 193,971 187,104 Stock-based compensation 411,412 285,605 General and administrative 288,297 269,448 Total Operating Expenses $2,973,990 $2,328,648 NOTE 18 – RESTATEMENT During the quarter ended December 31, 2013, the Company corrected an accounting error related to revenue share expenses. The Company will accrue theexpense for amounts due, versus when they are paid, for proper matching. The revenue share expense was not properly accrued at the end of 2012 or at theend of each 2013 quarter The restated Consolidated Balance Sheet, Consolidated Statement of Operations and Consolidated Statement of Cash Flows for the year ended December 31,2012 is as follows: Year ended December 31, 2012 Financial Statement Line Item Corrected PreviouslyStated Balance sheet Revenue sharepayable $90,577 $0 Income statement Revenue shareexpense $115,360 $24,783 Income statement Loss from operations $(454,922) $(364,345)Income statement Loss beforeprovision for incometaxes $(454,553) $(363,976)Income statement Net loss $(454,553) $(363,976)Statement of cashflows Net loss $(454,553) $(363,976)Statement of cashflows Increase in revenueshare payable $90,577 $0 NOTE 19 – SUBSEQUENT EVENTS On January 2, 2014 the Company executed an amendment to their securities redemption option agreement with Vicis Capital Master Fund that provides anoption to purchase all of the outstanding shares and derivative securities held by Vicis for a total of $6,000,000. The term of the option is through March 31,2014. The original agreement payment was for $9,000,000 and term was through December 30, 2013. On March 17, 2014, the Company entered into a securities purchase agreement, pursuant to which the Company sold an aggregate of 8,333,333 shares of theCompany’s common stock for $1.20 per share, or gross proceeds of $10,000,000. F-17Table of ContentsOPTIMIZERx CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2013 NOTE 19 – SUBSEQUENT EVENTS (CONTINUED) Placement agents in the offering received commissions equal to approximately 9.7% of gross proceeds, for an aggregate commission of approximately$970,000, including reimbursements for their reasonable out of pocket expenses. Placement agents also received warrants to purchase up to 804,139 sharesof the Company's common stock with an exercise price of $1.20 per share and a term of 5 years. The agent warrants also provide for piggy-back registrationrights. The Company used a portion of the net proceeds of the offering to exercise the securities redemption option agreement, as amended, with Vicis CapitalMaster Fund that provides the Company with an option to purchase all of the outstanding shares and derivative securities held by Vicis for total payment of$6,000,000. The shares and derivative securities include the Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, Common Stock, andwarrants to purchase shares of common stock held by Vicis in the Company. The balance of the net proceeds will be used for working capital purposes. On November 5, 2012, LDM Group, LLC (“LDM”) commenced an action against the Company in the United States District Court for the Eastern District ofMissouri, Eastern Division. The complaint alleged that OptimizeRx infringed on a patent issued on February 21, 2012 in favor of LDM. LDM alleged that itspatent is an invention of a method for making available targeted content to a prescription medication patient while the patient is still in the physician’soffice. According to LDM, the Company’s Integrated SampleMD uses systems and methods that perform the elements of the LDM patent and, therefore,infringes on its patent. On February 25, 2013, a Settlement and Patent License Agreement was reached with LDM, and LDM subsequently dismissed thelawsuit with prejudice. On April 23, 2013, however, LDM reinstituted the patent infringement action in the United States District Court for the EasternDistrict of Missouri, Eastern Division claiming that OptimizeRx breached the Settlement and Patent License Agreement. The Company continued tovigorously defend the OptimizeRx technology, preparing for litigation, depositions and patent protection while also positioning for legal actions againstLDM. On February 28, 2014, a Settlement Agreement was reached with LDM, and the judge dismissed the case with prejudice on March 18, 2014. Per theterms of the settlement agreement, the Company paid a one-time fee of $400,000 and will pay LDM the greater of $0.37 per patient discount distributed byOptimizeRx or 10% of the total revenue earned by OptimizeRx for distribution and redemption of all patent discounts. In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2013 through the date these financial statements wereissued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events describedabove.F-18Table of ContentsItem 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure No events occurred requiring disclosure under Item 304 of Regulation S-K during the fiscal year ending December 31, 2013. Item 9A. Controls and Procedures Disclosure Controls and Procedures As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls andprocedures as of the end of the period covered by this annual report, being December 31, 2013. This evaluation was carried out under the supervision andwith the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filedor submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securitiesand Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that informationrequired to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management,including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls andprocedures were ineffective as of the end of the period covered by this annual report. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under theSecurities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2013 basedon criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As aresult of this assessment, management concluded that, as of December 31, 2013, our internal control over financial reporting was not effective. Ourmanagement identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies withsmall staff: (i) inadequate segregation of duties and effective risk assessment; (ii) insufficient written policies and procedures for accounting and financialreporting with respect to the requirements and application of both US GAAP and SEC guidelines; and (iii) insufficient levels of supervision and review of theaccounting and financial reporting process. We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report onForm 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the followingchanges during our fiscal year ending December 31, 2014: (i) appoint additional qualified personnel to address inadequate segregation of duties andineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. 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 an exemption for non-accelerated filers set forth inSection 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Limitations on the Effectiveness of Internal Controls Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or ourinternal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how welldesigned and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control systemmust reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherentlimitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that allcontrol issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments indecision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual actsof some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certainassumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potentialfuture conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk. Item 9B. Other Information None11Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The following information sets forth the names, ages, and positions of our current directors and executive officers as of December 31, 2013. Name Age Position(s) andOffice(s) HeldDavid Lester 56 Chief OperatingOfficer, Secretary,Treasurer andDirectorDavid A. Harrell 48 Chairman, ChiefExecutive Officer,Chief StrategicOfficer and DirectorTerence J. Hamilton 48 Director and VP ofSales Set forth below is a brief description of the background and business experience of each of our current executive officers and directors. David Lester Mr. 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, businesstax reform, and sustainability. David A. Harrell Mr. 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. Directors Our 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 three (3) Directors. Term of Office Our 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.12Table of Contents Significant Employees We have no significant employees other than our officers and directors. Family Relationships There 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 Proceedings To 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, oremployee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time ofthe bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding(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 her involvement in any type ofbusiness, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities FuturesTrading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. Audit Committee We 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, 2013, 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, 2013 to be included in this Annual Report on Form 10-K and filed with the Securities and Exchange Commission. 13Table of ContentsSection 16(a) Beneficial Ownership Reporting Compliance Section 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, thefollowing 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, 2013: Name and principal position Number oflatereports Transactionsnot timelyreported Knownfailures tofile arequiredformShad Stastney Former Chairman, President, CEO andDirector 0 1 0 David Lester COO, Secretary, Treasurer and Director 0 0 0 David A. Harrell CEO, Vice Chairman, Chief StrategicOfficer and Director 0 0 0 Terence J. Hamilton VP of Sales and Director 0 0 0 Richard Kraniak 10% Holder 0 0 0 Code of Ethics As of December 31, 2013, 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.14Table of Contents Item 11. Executive Compensation 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, 2013 and 2012. SUMMARY COMPENSATION TABLEName and principal position Year Salary($) Bonus($) Stock Awards($) OptionAwards($)(2) Non-Equity Incentive PlanCompensation($) Nonqualified Deferred CompensationEarnings ($) All OtherCompensation($) Total($) ShadStastney FormerChairman,President,CEO andDirector 20122013 0126,762 0126,762 DavidLester COO,Secretary,TreasurerandDirector 20122013 157,500157,500 10,00015,000 167,500 172,500 David A.Harrell Chairman,ChiefExecutiveOfficer,ChiefStrategicOfficerandDirector 20122013 166,698180,104 50,00019,151 216,698 199,255 Terence J.Hamilton VP ofSales andDirector 20122013 157,500157,500 7,00011,000 164,500 168,500 Narrative Disclosure to the Summary Compensation Table On January 14, 2013, we entered into a written Employment Agreement with Shad Stastney. Pursuant to the terms and conditions of the EmploymentAgreement: §Mr. Stastney will serve as Chairman and Chief Executive Officer of our company for a period of twelve (12) months;§Mr. Stastney will earn a base salary of $175,000;§We will issue to Mr. Stastney an option to acquire two million (2,000,000) shares of our common stock at an exercise price per share of $1.00 with aterm of 5 years; and§Mr. Stastney will be entitled to participate in any employee benefit plans, as established by our board of directors. Mr. Stastney also agreed to keep certain information confidential and not compete with or solicit from our company for a period of time. On August 14, 2013, we amended the employment agreement with Mr. Stastney. Pursuant to the terms and conditions of the Amendment to EmploymentAgreement with Shad Stastney: §Mr. Stastney agreed to non-competition and non-solicitation restrictions with our company during the term of his employment and two yearsthereafter;§The term of Mr. Stastney’s employment shall be for one year, and shall automatically renew for each year thereafter unless terminated on thirty day’snotice before the end of the term; and§Mr. Stastney shall be entitled to two years of severance pay if he is terminated with or without cause. 15Table of ContentsOn September 20, 2013, we entered into a Separation Agreement with Mr. Stastney regarding the terms and conditions of his departure from the Company(the “Agreement”). Pursuant to the provisions of the Agreement, we agreed with Mr. Stastney as follows: §As of the date of the Agreement, Mr. Stastney is no longer an officer or director of our company and all prior agreements with Mr. Stastney areterminated in their entirety;§Mr. Stastney shall receive 500,000 shares of our common stock, half now and the rest by January 1, 2014;§We agreed to use our best efforts to register Mr. Stastney’s shares on Form S-8 by March 1, 2014;§We agreed to pay Mr. Stastney $126,762 and his reasonable out of pocket expenses incurred on our behalf;§The parties agreed to a mutual release of all claims and Mr. Stastney further agreed to certain covenants as provided for in the Agreement; and§Mr. Stastney will be involved with our company in a limited role as a consultant for one year to assist us on financing, strategic and legal initiativesand to help the transition with several ongoing projects. On April 6, 2009, we entered into an employment agreement with Mr. Lester to serve as our Chief Executive Officer. The agreement was amended on January14, 2013 to account for his new positions as COO, Secretary and Treasurer. Under the agreement, we agreed to compensate Mr. Lester $150,000 annually andwe granted him options to purchase 500,000 shares of our common stock, with 25% vesting immediately and 25% vesting after the completion of eachquarter of hire. Mr. Lester is also eligible for additional quarterly and annual bonus compensation, stock options, and stock grants based on performancemetrics outlined by our board of directors. He is entitled to vacation and sick days, and other benefits included in the agreement. On August 14, 2013, we amended the employment agreement with Mr. Lester. Pursuant to the terms and conditions of the Amendment to EmploymentAgreement with David Lester: §Mr. Lester will serve as Chief Operating Officer of our company; and§Mr. Lester will earn a base salary of $157,500 per year. 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 August 14, 2013, we amended the employment agreement with Mr. Hamilton. Pursuant to the terms and conditions of the Amendment to EmploymentAgreement with Terry Hamilton: §Mr. Hamilton will earn a base salary of $157,500 per year. On August 14, 2013 we granted restricted stock awards under our 2013 Incentive Plan. Mr. Hamilton was awarded 215,625 shares of our common stock. Therestricted stock awards will vest 50% on the date six months and one day after the date of grant, and the remaining 50% one year after the first vesting date. On June 1, 2008, we entered into an employment agreement with Mr. Harrell to serve as our CEO. The agreement was amended on January 14, 2013 toaccount for his new positions as CSO and Vice Chairman. The terms of his compensation, which is still in effect, 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 quarterly and annual bonus compensation, stock options, andstock 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 March 18, 2010, we entered into an addendum to the employment agreement to increase his compensation to $152,004 annually. On August 14, 2013, we amended the employment agreement with Mr. Harrell Pursuant to the terms and conditions of the Amendment to EmploymentAgreement with David Harrell: §Mr. Harrell will serve as Vice Chairman of the Board and Chief Strategy Officer of our company;§The term of Mr. Harrell’s employment shall be for one year, and shall automatically renew for each year thereafter unless terminated on thirty day’snotice before the end of the term; and§Mr. Harrell will earn a base salary of $183,750 per year; On August 14, 2013 we granted restricted stock awards under our 2013 Incentive Plan. Mr. David Harrell was awarded 121,875 shares of our common stock.The restricted stock awards will vest 50% on the date six months and one day after the date of grant, and the remaining 50% one year after the first vestingdate. 16Table of ContentsOutstanding Equity Awards at Fiscal Year-End The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officers as ofDecember 31, 2013. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-ENDOPTION AWARDS STOCK AWARDS Name Number of Securities Underlying UnexercisedOptions (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying UnexercisedUnearned Options (#) OptionExercisePrice($) Option ExpirationDate Numberof Shares or Unitsof StockThat Have Not Vested (#) MarketValue of Shares or Units of Stock That Have Not Vested($) EquityIncentivePlanAwards:NumberofUnearnedShares,Units orOtherRightsThatHaveNotVested(#) EquityIncentivePlanAwards:MarketorPayoutValue ofUnearnedShares,Units orOtherRightsThatHave NotVested(#) DavidLester 375,000 125,000 55,000 $0.35(1)$0.35(1)$1.00 10/1/14 12/22/14 5/31/16 DavidHarrell 100,000 200,000 102,500 $1.00 $1.81 $1.00 3/5/14 4/26/15 5/31/16 121,875 225,468 TerenceJ.Hamilton 150,000 127,500 $1.00 $1.00 3/5/14 5/31/16 215,625 398,906 (1) These are warrants that were revalued on October 1, 2009 to $0.35 per share. 17Table of ContentsItem 12. Security Ownership of Certain Beneficial Owners and Management and Related The following table sets forth, as of March 31, 2014, the beneficial ownership of our common and preferred stock by each executive officer and director, byeach person known by us to beneficially own more than 5% of the our common stock and by the executive officers and directors as a group. Unless otherwisenoted, the address of each beneficial owner is located at 400 Water Street, Ste. 200, Rochester, MI 48307. Title of class Name and address ofbeneficial owner(1) Amount ofbeneficialownership Percent ofclass (2) Common David Lester(3) 483,348 2.1%Common David Harrell(4) 3,599,687 15.5%Common Terence J. Hamilton(5) 754,812 3.2%Total of All Directorsand Executive Officers: 4,837,847 20.5% More Than 5%Beneficial Owners: Common Bradley Louis Radoff 117 W Loop S, Ste1625 Houston, TX77027 3,250,000 14.2%Common Wolverine FlagshipFundTrading Limited 175 W Jackson Blvd,3rd Flr Chicago, IL 60604 2,083,500 9.1% (1)As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or sharedinvestment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes ofthis table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60days after such date.(2)The percent of class is based on 22,809,586 voting shares as of March 31, 2014.(3)Includes 428,348 shares held in his name and options to purchase 55,000 shares of common stock at $1.00 per share.(4)Includes 3,197,187 shares held in his name, options to purchase 402,500 shares of common stock at prices ranging from of $1.00 to $1.81 pershare.(5)Includes 527,312 shares held in his name and options to purchase 227,500 shares of common stock at a price of $1.00 per share. Item 13. Certain Relationships and Related Transactions, and Director Independence Other than the transactions described under the heading “Executive Compensation” (or with respect to which such information is omitted in accordance withSEC regulations), since January 1, 2013 there have not been, and there is not currently proposed, any transaction or series of similar transactions to which wewere or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets atyear-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or anymember of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest. Securities Redemption Option AgreementOn March 17, 2014, we raised gross proceeds of $10,000,000 in an unregistered offering (the “Offering”) with certain accredited investors. We used a portionof the net proceeds of the Offering to exercise the Securities Redemption Option Agreement, as amended, with Vicis Capital Master Fund (“Vicis”) thatprovides us with an option to purchase all of the outstanding shares and derivative securities held by Vicis for total payment of six million dollars($6,000,000). The shares and derivative securities include the Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, Common Stock,and warrants to purchase shares of common stock held by Vicis in our company.Item 14. Principal Accounting Fees and Services Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for theyears ended: FinancialStatements forthe YearEndedDecember 31 AuditServices Audit RelatedFees Tax Fees Other Fees 2013 $33,900 $0 $2,800 $0 2012 $24,650 $0 $2,750 $0 18Table of ContentsPART IV Item 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) Exhibits ExhibitNumberDescription3.1Articles of Incorporation of OptimizeRx Corporation (the “Company”)13.2Amended and Restated Bylaws of the Company13.3Certificate of Designation, filed on September 5, 2008, with the Secretary of State of the State of Nevada by the Company110.1Termination Agreement and Release, dated September 16, 2011210.2Securities Purchase Agreement, dated September 16, 2011210.3Amended and Restated Guarantee Agreement, dated September 16, 2011210.4Second Amended and Restated Registration Rights Agreement, dated September 16, 2011210.5Third Amended and Restated Security Agreement, dated September 16, 2011210.6Third Amended and Restated Guarantor Security Agreement, dated September 16, 2011210.7Employment Agreement, dated January 14, 2013310.8Securities Redemption Option Agreement, dated January 10, 2013410.9Amendment No. 1 to Securities Redemption Option Agreement510.10Separation Agreement, dated September 20, 2013610.11Shad Stastney Amendment to Employment Agreement, dated August 14, 2013710.12David Lester Amendment to Employment Agreement, dated August 14, 2013710.13David Harrell Amendment to Employment Agreement, dated August 14, 2013710.14Terrance Hamilton Amendment to Employment Agreement, dated August 14, 2013721.1List of Subsidiaries123.1Consent of Independent Registered Public Accounting Firm31.1Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant toSection 302 of the Sarbanes-Oxley Act of 200232.2Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant toSection 302 of the Sarbanes-Oxley Act of 200232.1Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002 1 Incorporated by reference to the Form S-1, filed by the Company with the Securities and Exchange Commission on November 12, 2008.2 Incorporated by reference to the Form 8-K, filed by the Company with the Securities and Exchange Commission on September 21, 2011.3 Incorporated by reference to the Form 8-K, filed by the Company with the Securities and Exchange Commission on January 18, 2013.4 Incorporated by reference to the Form 8-K, filed by the Company with the Securities and Exchange Commission on January 11, 2013.5 Incorporated by reference to the Form 8-K, filed by the Company with the Securities and Exchange Commission on January 2, 2014.6 Incorporated by reference to the Form 8-K, filed by the Company with the Securities and Exchange Commission on September 20, 2013.7 Incorporated by reference to the Form 8-K, filed by the Company with the Securities and Exchange Commission on August 15, 2013 19Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized. OptimizeRx Corporation By:/s/ David Harrell Shad StastneyChief Executive Officer, Principal Executive Officer and Director March 31, 2014 OptimizeRx Corporation By:/s/ H. David Lester H. David LesterChief Operating Officer, Chief Financial Officer, Principal Financial Officer and Director March 31, 2014 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated. By:/s/ David Harrell David HarrellTitle:DirectorDate:March 31, 2014 By:/s/ David Lester David Lester Title:DirectorDate:March 31, 2014 By:/s/ Terence J. Hamilton Terence J. HamiltonTitle:DirectorDate:March 31, 2014 20CERTIFICATIONS I, David Harrell, certify that; 1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2013 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, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 most recentfiscal 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 are reasonablylikely 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 internal controlover financial reporting. Date: March 31, 2014 /s/ David HarrellBy: David HarrellTitle: Chief Executive OfficerCERTIFICATIONS I, H. David Lester, certify that; 1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2013 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, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 most recentfiscal 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 are reasonablylikely 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 internal controlover financial reporting. Date: March 31, 2014 /s/ H. David LesterBy: H. David LesterTitle: Chief Financial OfficerBy:/s/ David HarrellName:David HarrellTitle:Principal Executive Officer and DirectorDate:March 31, 2014By:/s/ H. David LesterName:H. David LesterTitle:Principal Financial Officer and DirectorDate:March 31, 2014CERTIFICATION OF CHIEF EXECUTIVE OFFICER ANDCHIEF FINANCIAL OFFICERPURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the annual Report of OptimizeRx Corp (the “Company”) on Form 10-K for the year ended December 31, 2013 filed with the Securitiesand Exchange Commission (the “Report”), We, David Harrell and H. David Lester, Chief Executive Officer and Chief Financial Officer, respectively, of theCompany, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and 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. This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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