Good morning, my name is Stephanie and I will be your conference operator today. At this time I would like to welcome everyone to the OptimizeRx Corporation Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the call over to Doug Baker, Chief Financial Officer. Please go ahead sir.

Thank you, Stephanie. I’d also like to welcome everybody to the call and I’m going to start out by reading the Safe Harbor language. This conference may contain certain forward-looking statements within the definition of Section 27A of the Securities Act of 1933 as amended in subsection 20(1) (e) of the Securities Act of 1934, amended. These forward-looking statements should not be used to make any investment decisions, the words “potentially” “estimate” “possible” “seeking” and similar expressions identified forward-looking statements which speak only as of the date the statement was made. The company undertakes no obligation to publicly update or revise any forward-looking statements only because of new information, future events or otherwise. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Further events and natural results could differ materially from set forth and contemplated buy or underlying the forward-looking statements, the risks and uncertainties to which forward-looking statements are subject to include but are not limited to the effective government regulation, competition and other material risk. With that, I’m going to now turn the call over to our CEO, David A. Harrell.

Good morning or afternoon to everybody and again, first let me apologize that we had to schedule this on particularly a Friday, it certainly wasn’t our intention or certainly moving forward it going to be standard protocol but we did have an important mission in Chicago with Allscripts as I referred to you this week and just got back late evening yesterday, so again I apologize. So what we thought we do for this call is rather than follow our traditional framework for these calls in which we go over the specifics of the latest financials, I thought I just jump in and make some general comments and just speak to the nature of our business assuming most of you likely have at least looked at the primary financial information already and then we certainly can take questions on that and Doug is well prepared for that. So I guess in starting I just like to say although we are pleased that we did have an increase in sales of 50 plus percent over the same period last year and certainly our eCoupon business has increased because of increased utilization. And we did generate a couple of hundred thousand dollars excluding non-cash. Frankly we are somewhat disappointed with the sales and profits and for the first half of the year based on a couple of key factors out of control of our company that we wanted to speak to and make sure everybody has some further clarity on that. And one of them is kind of a continuation of what we had talked about last quarter involving Allscripts. Most of you know Allscripts is a huge EMR e-prescribe platform and it’s our largest platform, and as we spoke in the first quarter that they did have a few issues and…

(Operator Instructions) Your first question comes from the line of Brian Murphy with Merriman Capital.

Hi. Thanks for taking my questions. David, I just wanted to clarify one of the comments that you made in reference to the top-five provider that you had lined up, I guess for November. You mentioned there was an opportunity to get $50,000 there. Did you mean it was an opportunity to reach 50,000 doctors?

Yes. Thank you for that clarification.

Okay. Great. And – so could you just remind again what kind of reach Allscripts has?

So, Allscripts has complete reach. The last figures – they use interestingly upwards of 180,000 healthcare providers, but what we focus on is active ePrescribers, which has a total reach of I think around 78,000 doctors.

Okay.

So, I mean, they are the second largest EHR in the country serves only [biotic] which has [indiscernible] last year.

Got it. And could you talk to us a little bit about how you guys are understanding end-user adoption. I mean, you guys are becoming embedded in the lot of these systems now and you reach is increasing substantially? Can you give us a sense for what percentage of the doctors, you’re reaching have adopted this stuff yet? And also once you embedded in these systems could you talk a little bit about maybe some of the levers you have to increase awareness and usage after you’ve actually been embedded in the workflow?

So, if we’ve been embedded correctly, the beauty of our system is if they prescribe a drug it’s likely that it’s going to happen. So what it really comes down to is, number of usages of our system is the number of uses that prescribe, the 60 or 70 drugs that we have. So, clearly we continue to expand our reach from our number of brands now to the full 370 brands that have coupons. The user rate will go up dramatically. And of course those for dietist and surgeons and anesthesiologists that likely would never use us. But clearly, again, we have about roughly speaking maybe a 35% [reiterate] now with the number of drugs that we have. But again, as we bring more specialty drugs and more brands again that will increase. So, the adoption, if it’s correctly working, should happen automatically. The workflow is when they prescribe a drug and select it that’s when they electronically the EHR call us and we determine if that physician and patient is eligible for co-pay coupon and we send in real-time back to them. It’s automatically printed and electronically sent to the pharmacy. Is that clarifies things, Brian.

Yes. That helps. Thanks. And Doug maybe one for you, it is typically some language in your filings about customer concentration I didn’t see any language of our customer concentration in the Q this quarter. Can you give us a sense for maybe how many 10% customers you had or anything would help?

Sure, that’s actually an annual requirement, which is why didn’t put in the Q, but I’d say we have three customers over 10% of revenue.

Okay. Okay. So kind of maybe similar to what it was last quarter, I think you had the top three, it was about 44% of sales last quarter?

And again those are the ones that we’ve expanded more towards enterprise wide agreements, which is what are model is for all of our 20 plus pharma companies.

Okay. All right. And I think we just talking about distributions, I think you guys said that on a sequential basis distributions were up about 30%. What was that year-over-year?

Well, I think we compared we didn’t – I don’t know if look at, we just compared second quarter to first quarter.

Okay. All right. I’ll hop back in the queue.

Yes, thank you, Brian.

Thank you.

(Operator Instructions) Your next question comes from Gus Halas with Optimizer.

Great, Gus, thanks for joining us.

I just wanted to mention a couple of things, that how excited I am in joining the Board and the potential that I see in the company. And what I’ve spoken and the discussions I’ve with Doug and Dave, I think the company is in good hands that has tremendous potential and where I can help is hopefully and my core confidence which is primarily the turnaround for structuring companies and I look forward to working with them. I look forward to working with the company. I think it’s an excellent product worked with health and wellness companies and with pharma companies as well in my past preferably and so I look forward to pitching in many where I can. But it’s a good organization with a lot of opportunities. Thank you.

Thank you, Gus for those comments and we are very, very excited to Gus’s committee’s who wants to have, he is willing to have active participation and again with these enormous opportunities we can certainly use his expertise and guidance and welcome it. So thank you again.

Your next question comes from the line of Joseph [Delahoussaye], a Private Investor.

Yes. Hi. Thanks for taking the call. You had mentioned or stated that the sequential distribution were up 30% from first quarter, but I noticed revenue increased was only about 10% and I know that they’ll be I guess royalty payments kicked in probably in the second quarter somehow. But it still seems like there is some delta there if you will between the number or the sequential increase in distribution versus the revenue, and I just wondering if anything to add or explain that discrepancies?

In the first quarter there was a lot more drugs, so we get revenue from three sources; reporting which is small; distributions and then setup and launch a drug. So in the first quarter there were lots of drug launched where we got setup fee, where drugs were then launch late in the quarter or even maybe in the second quarter. And so distributions kicked in became 30% increase but we had less setup ease second quarter.

Right. So annually we use to get a lot of setup these January with our programs.

Okay. I thought in the first quarter company thought that there was a question regarding the sources of the revenue in the quarter and it’s came from settle fees and more distribution than I thought to comment or…?

Yes. I mean, it’s always a smaller percentage by far but.

Yes. It was still more distribution in the first quarter but basically what it was setup fees were been down in the third quarter.

Yes. Yes, okay. And then is would healthy royalty, would that show up in the – it would show up in the revenue share expense, it similarly to show up in the operating expense line.

Yes. It’s in the revenue share expense and that wouldn’t affect the revenue part of the question. The revenue share line, it includes our payments or our partner whether it’s LEM or Allscripts or DrFirst journey.

Okay. That’s interesting. The healthy payment those began in the second quarter, correct not the first quarter?

I believe they – it was before my time and I think in March.

Yes. Right, in early March.

We did start in the first quarter.

Okay. Because then I notice the revenue share expense as a percent of revenue was fairly stable from first quarter to the second around 62% or I guess 38% something like that. And I guess I would have thought a bigger impact from the healthy revenue share or royalty share if you will?

And remember, we’re net in net with our partners.

Yes. Yes. But the net revenue line that’s before the healthy percentage, correct?

But on the revenue share, we’re sharing that percentage with our EHR partners too.

Right. Yes. I understand that, because I just thought that the revenue line is the respective of any healthy royalty then the healthy royalty shows up on revenue share expense line item than I guess I would expected to see the revenue share expense to be higher in Q2 than it was in Q1, but that didn’t happened.

Yes. It looks kind of a whole mix of everything too, because it is different percentages like channel sometime.

Okay. Alright. Would you expect the revenue share expense item to be fairly stable around 38%?

I think we’re probably – I think we’re forecasting about 40%, 42%.

Yes. I think we’ve might been even said in the Q that it looks likely to go up slightly.

Yes. That’s right, you just said that. Okay. Okay. Fair enough. Thanks guys.

Okay. Thank you.

Your next question comes from the line of Harvey Poppel with Poptech LP.

Yes. Guys, certainly appreciate your optimism about the second half of the year. Some questions, from what you’re saying overall it sounds like with the problems that are being resolved this quarter, the new launches and so forth that you really backend loaded to the fourth quarters really where you start to see the true benefits of all of these events happening, is that a fair assessment?

Yes. I mean, we see third quarter continuing to be better than it was last year and certainly better than second quarter here. But the reality is the fixes of the Allscripts and the expansions of the Allscripts platform won’t be done until end of September anyways to your point. And again that’s where we see. If everything sitting on all the stones that we anticipate it should be full bloom in the first quarter.

And just reflecting on what happened this past year in terms of seasonality, you had a relatively big fourth quarter in 2013 and then the revenues drop off fairly sharply in the first quarter of this year and now ramping back up again. To the extend that you have a big fourth quarter, is there any reason either seasonally or otherwise why as we start to look at 2015 that number would drop back down again?

Well, it does have some seasonal effect just the way pharma operate in terms of getting budget aligned, getting the new offers up, et cetera. So over time, next year we see that being a lot less, but to some extend it would happen, but it would be less of an effect as we get more and more brands and position. We’re becoming much more of a strategic source of working together to avoid any delays with any budgets, delays with getting products setup et cetera, and I would say to a lesser extend, but its generally follow that curve.

Okay. On LDM part of the arrangement that you reached with them in addition to their taking a revenue share was that you were going to be working with them on some other initiatives, maybe I missed it in your earlier comments, but what’s going to happen on that front?

Yes. So that’s a great question. So we’re in the process in the process of integrating with them, so that they can -- we can serve our co-pay coupons and vouchers in their network. So, we’re anticipating that we’re going to start rolling out some programs in September which will help our distribution hopefully to. But it could go into October. So that’s aggressively happening. We’ve got some brands that have approved the channel and we’re in the process of making that happen. So we’re doing technology integration if you will with them.

And can you put any numbers on when you talk about their network order of magnitude how many doctors additional this?

Well, again, there’s been discussion of 50,000 to 100,000 new doctors. So, the difficulty of what we have here and until we get these platforms up and running you never know what utilization is until you’re couple of months into it. And then from there its pretty standard assuming that the brands state at same and as we grow. So any time, we think it’s significant which is very important why we did this deal, and it is advancing, but it’s hard to talk about the impact of any channel distinctively besides hey these are significant amounts of doctors. So we know that they have a pretty good mix of primary care and cardiologists which are good. But until you see the full utilization happening, it’s tough to quantify what type of consistent revenue we’ll able to see. We think it can be very substantial.

Okay. And along that front when you talk about 78,000 as being number of doctors that are potentially or materially participating with Allscripts. Is that a number – that’s after shaking the ones that aren’t – I mean, that’s the number that you think are really going to be or have been active there? Is that right?

They have not been active in there. So, I mean if Allscripts turns on their Allscripts PRO wholly we’re getting 30,000 extra doctors, that’s why I getting a whole new EMR, a bit EMR.

Okay. But how it relates that to the 78 number you threw out earlier, I’m trying to put this 78 k number into context?

Yes. In our primary platform that we’ve had since initially there’s about 25,000 and there is about 35,000 in the PRO, which we hope most will be active in September. And then they have another platform that’s targeting to health systems more on an individual they sell the technology to them. And they’re introducing us, in fact they are solution to those as well. So, my goal would be that we reach about 60,000 to 65,000 of those and then next year gets all the health systems additional health systems on board. And they want that too, because they get the revenue share.

Okay. And just again along that line trying to relate that to the reach on the Quest side, what is the reach there in terms of doctors?

So, I think the Quest, again Harvey, I believe it was 28,000 roughly, happy to confirm that I don’t think I’m too far off. So, again as we roll that out it will be really good next call to quarter to monitor fourth quarter and then going or at least a few months and that couple of months and look at their utilization, which we think it’s going to exciting.

Okay. Good. Thank you very much.

(Operator Instructions) Your next question comes from [Randy Hughes] at Private Investor.

Yes. Hello, gentlemen.

Hi, Randy, how are you.

Good. So just a quick question, I was taking note that one of the directors had reduced his holdings rather dramatically over the last couple of months. It looks like Brad is a Radoff.

Yes. He’s not a Director. He is a one of our leading investors.

Okay.

Not sure, Brad or anybody has it. Do you have any color?

I think I’d add to that is. He would be reinvested in the private placement and he ended up with over 10% ownership in the company which subjected to reporting requirements and nobody like to do that. So I think one of its goal was to gradually and painlessly get under that 10% and he did in two black trade both of which I think were kind of new negotiating, new buyer, he didn’t go into the open market.

Well, its still operate in.

Right.

That’s helpful. And you referenced that for third quarter you probably see still coming in a lost probably for the quarter which saw some profitability in the fourth quarter?

Doug say, yes, okay, but I’d like to see a small profit frankly. But I don’t know.

Definitely, I’d say, definitely it would more cash flow – our cash flow can improve in the third quarter.

Okay.

Great. Thanks guys.

Sure. Thank you.

Your next question comes from the line of Neal Goldman with Goldman Capital Management.

Hi, Neal.

Can you just review the legal issue, I see you had 400,000 costs in the second quarter and you just settle one of the case recently in August?

So we had 400,000 with LDM.

Okay.

That was first quarter. So it just…

Is there any other cost associated in this quarter with this last settlement?

No.

So you only have the one remaining case at this point?

Yes, which we feel is...

We don’t see it was in [EMR], yes.

Yes. When you talk about loss you’re talking about based on a reported GAAP number not cash generation is what accounts?

Yes, that was stated artfully, that was the point I was going to make.

Right. Now as cash flow accounts and that – because the stock-based comp is your biggest negative, right?

Right.

Right.

Okay. All right. And the stock-based comp in this past quarter was how much?

I don’t know this quarter the number. I got to be 654, but quarter was a smaller, it was less than $200.

Okay. And going forward what do you think that number will run?

Less, I mean, what are you saying Doug.

I would say, as you know actually going by the third quarter 100,000 or less like that.

Okay. So it won’t meaningful going forward and with the legal costs going away, okay, the key is the cash flow generation. Okay, guys, thank you.

No problem, Neal. Looks like we have one more question. Joe.

Again, your next question comes from the line of Joseph [Delahoussaye] at Private Investor

Yes, hi. My question was sort of answered couple of calls ago, but maybe I could ask it in different way. I was trying to – I was wondering you mentioned 78,000 of ePrescribing doctors on the Allscripts platform. You talked about a little about Quest. I guess, I was wondering if maybe you could compare how many ePrescribing docs you had on all of your platform system wide at the end of the second quarter versus what you would see it at that end of the year given all the initiatives, all the additional systems coming on line. But it sounds like you don’t know how many doctors are actually ePrescribing doctors on any given new platform until you usage, is that correct?

Exactly. Now again, concerning we’re getting – if we can – we’re looking at significant increase of active [utilizers] and we’re actually projecting its high as double a number of unique doctors using this from second quarter into fourth quarter at the end of fourth quarter, so we’re – its kind of a very aggressive statement, but looking at what we anticipate we’re hopefully going to achieve that.

And that’s this raw doctors or you think ePrescribing doctors?

ePrescribing doctors utilizing this system, utilizing our co-pay coupons.

Okay. And I think I’ve ask this question few times in previous calls. Do you still see a million distributions per quarter like at least for Q4, obviously Q3 doesn’t like doable, but you can hit this thing before?

Again, when I do the math I look at the number of doctors, it seems like we can certainly achieve that. So, its certainly a goal for us, until we get utilization the tricky part of that again its hard to really look at what you anticipate is hopefully going to be an – utilization is hopefully will be in line with what we’re anticipating. If it is I think we would come close to that.

Okay. And then obviously growth sequentially from there into 2015?

Yes. I mean, again, not is our network growing hopefully we’re continue to garner more and more brand, more and more pharmaceutical companies and the utilization itself ePrescribing is increasing to. Again, lot of doctors is strange; they sound still -- one hand with the paper and one hand with the ePrescribe platform. So that’s continuing to go moving towards strictly the hand that ePrescribe, so I think that’s very favorable for us to.

Okay. Great. Thanks good luck gentlemen.

Thank you. Appreciate it.

Again. Go ahead sir.

So it looks we have no more questions, but again we do very, very much appreciate all the interest in the company and support and again look forward to resolving the speed bumps which I’m confident we have in terms of what we’ve experienced the first half of the year. And key goal and importance is to continue to grow our network and grow our promotion of more products. So, thank you very much. Thanks for taking the time on this Friday in the middle of summer, though it doesn’t feel that way here in Michigan. And we hope everybody has a great weekend.

Thank you. This concludes today’s conference. You may now disconnect.