EX-99.4 6 icct_ex994.htm UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION. icct_ex994.htm

 

EXHIBIT 99.4

 

iCoreConnect Inc.

Unaudited Pro Forma Condensed Combined Financial Information

 

The unaudited pro forma condensed combined balance sheet as of June 30, 2021 and the unaudited pro forma condensed combined statements of income for the six months ended June 30, 2021 and for the year ended December 31, 2020 combine the financial statements of iCoreConnect Inc. (“iCoreConnect”), and Spectrum Technology Solutions, LLC (“STS”) giving effect to the transaction described in the Agreement, as if they had occurred on January 1, 2020 in respect of the unaudited pro forma condensed combined statements of operations and on June 30, 2021 in respect of the unaudited pro forma condensed combined balance sheet.

 

The unaudited pro forma condensed combined financial information should be read in conjunction with:

 

 

·

 iCoreConnect’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2020, as contained in the Form 10-K filed on April 15, 2021 with the United States Securities and Exchange Commission (the “SEC”).

 

 

 

 

·

 iCoreConnect’s unaudited condensed consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2021, as contained in its Quarterly Report on Form 10-Q filed on August 23, 2021 with the SEC.

 

 

 

 

·

 STS’s audited financial statements as of and for the years ended December 31, 2020 and 2019, contained elsewhere herein.

 

 

 

 

·

 STS’s unaudited condensed financial statements as of June 30, 2021 and for the six months ended June 30, 2021, contained elsewhere herein.

 

 

 

 

·

 the other information contained in or incorporated by reference into this filing.
 

The final purchase consideration and the allocation of the purchase consideration may materially differ from that reflected in the unaudited pro forma condensed combined financial information after final valuation procedures are performed and amounts are finalized following the completion of the acquisition.

 

The unaudited pro forma adjustments give effect to events that are directly attributable to the transaction and are based on available data and certain assumptions that management believes are factually supportable. In addition, with respect to the unaudited condensed combined statements of operations, the unaudited pro forma adjustments are expected to have a continuing impact on the combined results.

 

The unaudited pro forma condensed combined financial information is presented for informational purposes only and to aid you in your analysis of the financial aspects of the acquisition. The unaudited pro forma condensed combined financial information described above has been derived from the historical financial statements of iCoreConnect and STS and the related notes included elsewhere in this Form 8-K. The unaudited pro forma condensed combined financial information is based on iCoreConnect’s accounting policies. Further review may identify additional differences between the accounting policies of iCoreConnect and STS. The unaudited pro forma adjustments and the pro forma condensed combined financial information do not reflect the impact of synergies or post-transaction management actions and are not necessarily indicative of the financial position or results of operations that may have actually occurred had the transaction taken place on the dates noted, or of iCoreConnect’s future financial position or operating results.

 

 

 

 

iCoreConnect Inc. 

Unaudited Pro Forma Condensed Combined Statements of Operations 

For the Six Months Ended June 30, 2021 

       

 

 

iCoreConnect Inc.

 

 

Spectrum Technology Solutions LLC

 

 

Adjustment(s)

 

 

Consolidated

 

Revenue

 

 $ 1,685,379

 

 

 $ 1,036,237

 

 

 $ -

 

 

 $ 2,721,616

 

Cost of sales

 

 

 507,761

 

 

 

 647,446

 

 

 

 -

 

 

 

 1,155,207

 

Gross profit

 

 

 1,177,618

 

 

 

 388,791

 

 

 

 -

 

 

 

 1,566,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

 1,860,258

 

 

 

 322,275

 

 

 

 -

 

 

 

 2,182,533

 

Depreciation and amortization

 

 

 503,412

 

 

 

 -

 

 

 

 -

 

 

 

 503,412

 

Total operating expenses

 

 

 2,363,670

 

 

 

 322,275

 

 

 

 -

 

 

 

 2,685,945

 

Income (Loss) from operations

 

 

 (1,186,052 )

 

 

 66,516

 

 

 

 -

 

 

 

 (1,119,536 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 (260,323 )

 

 

 (336 )

 

 

 (112,500 )(D)

 

 

 (373,159 )

Other income

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Gain on cancellation of liabilities

 

 

 331,404

 

 

 

 183,900

 

 

 

 -

 

 

 

 515,304

 

Total other income (expense)

 

 

 71,081

 

 

 

 183,564

 

 

 

 (112,500 )

 

 

 142,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 $ (1,114,971 )

 

 $ 250,080

 

 

 $ (112,500 )

 

 $ (977,391 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share available to common stockholders, basic and diluted

 

 $ (0.01 )

 

 

 -

 

 

 

 -

 

 

 $ (0.01 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares, basic and diluted

 

 

 128,456,113

 

 

 

 -

 

 

 

 4,046,617

 

 

 

 132,502,730

 

 

 
2

 

 

iCoreConnect Inc. 

Unaudited Pro Forma Condensed Combined Statements of Operations 

For the Year Ended December 31, 2020 

       

 

 

iCoreConnect Inc.

 

 

Spectrum Technology Solutions LLC

 

 

Adjustment(s)

 

 

Consolidated

 

Revenue

 

 $ 2,123,587

 

 

 $ 2,002,757

 

 

 $ -

 

 

 $ 4,126,344

 

Cost of sales

 

 

 1,008,843

 

 

 

 1,155,143

 

 

 

 -

 

 

 

 2,163,986

 

Gross profit

 

 

 1,114,744

 

 

 

 847,614

 

 

 

 -

 

 

 

 1,962,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

 3,447,014

 

 

 

 723,269

 

 

 

 -

 

 

 

 4,170,283

 

Depreciation and amortization

 

 

 906,060

 

 

 

 36,817

 

 

 

 -

 

 

 

 942,877

 

Total operating expenses

 

 

 4,353,074

 

 

 

 760,086

 

 

 

 -

 

 

 

 5,113,160

 

Income (Loss) from operations

 

 

 (3,238,330 )

 

 

 87,528

 

 

 

 -

 

 

 

 (3,150,802 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 (238,820 )

 

 

 (6,130 )

 

 

 (225,000 )(D)

 

 

 (469,950 )

Other income (expense)

 

 

 (50,733 )

 

 

 -

 

 

 

 -

 

 

 

 (50,733 )

Gain on cancellation of liabilities

 

 

 36,642

 

 

 

 -

 

 

 

 -

 

 

 

 36,642

 

Total other income (expense)

 

 

 (252,911 )

 

 

 (6,130 )

 

 

 (225,000 )

 

 

 (484,041 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 $ (3,491,241 )

 

 $ 81,398

 

 

 $ (225,000 )

 

 $ (3,634,843 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share available to common stockholders, basic and diluted

 

 $ (0.05 )

 

 

 -

 

 

 

 -

 

 

 $ (0.05 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares, basic and diluted

 

 

 76,459,645

 

 

 

 -

 

 

 

 4,046,617

 

 

 

 80,506,262

 

 

 
3

 

 

iCoreConnect Inc. 

Unaudited Pro Forma Condensed Combined Balance Sheets  

June 30, 2021 

      

 

 

iCoreConnect
Inc.

 

 

 Spectrum Technology Solutions LLC

 

 

 Adjustment(s)

 

 

 Consolidated

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 $ 846,039

 

 

 $ 118,366

 

 

 $ 31,634 (A)

 

 $ 996,039

 

Accounts receivable, net

 

 

 233,915

 

 

 

 100,765

 

 

 

 (65,542 )(A)

 

 

 269,138

 

Loans receivable

 

 

 -

 

 

 

 352,200

 

 

 

 (352,200 )(A)

 

 

 -

 

Inventory

 

 

 -

 

 

 

 13,789

 

 

 

 (13,789 )(A)

 

 

 -

 

Prepaid expenses and other current assets

 

 

 132,019

 

 

 

 135,535

 

 

 

 (135,535 )(A)

 

 

 132,019

 

Total current assets

 

 

 1,211,973

 

 

 

 720,655

 

 

 

 (535,432 )

 

 

 1,397,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

 15,090

 

 

 

 58,628

 

 

 

 (26,628 )(A)

 

 

 47,090

 

Right of use lease asset - operating

 

 

 118,182

 

 

 

 -

 

 

 

 -

 

 

 

 118,182

 

Software development costs, net

 

 

 698,349

 

 

 

 -

 

 

 

 -

 

 

 

 698,349

 

Acquired technology, net

 

 

 517,929

 

 

 

 23,940

 

 

 

 (23,940 )(A)

 

 

 517,929

 

Customer relationships, net

 

 

 1,855,664

 

 

 

 -

 

 

 

 -

 

 

 

 1,855,664

 

Goodwill

 

 

 1,291,109

 

 

 

 -

 

 

 

 1,782,777 (C)

 

 

 3,073,886

 

Total long-term assets

 

 

 4,496,323

 

 

 

 82,568

 

 

 

 1,732,209

 

 

 

 6,311,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 $ 5,708,296

 

 

 $ 803,223

 

 

 $ 1,196,777

 

 

 $ 7,708,296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 $ 833,416

 

 

 $ 82,807

 

 

 $ (82,807 )(A)

 

 $ 833,416

 

Operating lease liability, current portion

 

 

 47,035

 

 

 

 -

 

 

 

 -

 

 

 

 47,035

 

Notes payable

 

 

 2,372,271

 

 

 

 356,568

 

 

 

 (356,568 )(A)

 

 

 2,372,271

 

Deferred revenue, current portion

 

 

 31,586

 

 

 

 -

 

 

 

 -

 

 

 

 31,586

 

Total current liabilities

 

 

 3,284,308

 

 

 

 439,375

 

 

 

 (439,375 )

 

 

 3,284,308

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease liability, net of current portion

 

 

 53,699

 

 

 

 -

 

 

 

 -

 

 

 

 53,699

 

Deferred revenue, net of current portion

 

 

 20,743

 

 

 

 -

 

 

 

 -

 

 

 

 20,743

 

Notes payable, net of current portion

 

 

 -

 

 

 

 -

 

 

 

 1,500,000 (B)

 

 

 1,500,000

 

Total long-term liabilities

 

 

 74,442

 

 

 

 -

 

 

 

 1,500,000

 

 

 

 1,574,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

 3,358,750

 

 

 

 439,375

 

 

 

 1,060,625

 

 

 

 4,858,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock par value $0.001; 600,000,000 shares authorized; Issued and Outstanding: 151,613,399 as of June 30, 2021 and 90,081,336 as of December 31, 2020

 

 

 151,613

 

 

 

 -

 

 

 

 -

 

 

 

 151,613

 

Additional paid-in-capital

 

 

 81,143,985

 

 

 

 -

 

 

 

 282,777 (B)

 

 

 81,426,762

 

Accumulated equity (deficit)

 

 

 (78,946,052 )

 

 

 363,848

 

 

 

 (146,625 )(A)

 

 

 (78,728,829 )
TOTAL STOCKHOLDERS' EQUITY

 

 

 2,349,546

 

 

 

 363,848

 

 

 

 136,152

 

 

 

 2,849,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

 $ 5,708,296

 

 

 $ 803,223

 

 

 $ 1,196,777

 

 

 $ 7,708,296

 

 

 
4

 

 

iCoreConnect Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Information

 

Note 1. Basis of Presentation

 

The unaudited pro forma condensed combined financial information set forth herein is based upon the consolidated financial statements of iCoreConnect Inc. and Spectrum Technology Solutions, LLC. The unaudited pro forma condensed combined financial information is presented as if the transaction had been completed on January 1, 2020 with respect to the unaudited pro forma condensed combined statements of operations for each of the six months ended June 30, 2021 and for the year ended December 31, 2020 and on June 30, 2021 in respect of the unaudited pro forma condensed combined balance sheet.

 

The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations had the transaction occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that the combined company will experience after the completion of the transactions.

 

We have accounted for the acquisition in this unaudited pro forma condensed combined financial information using the acquisition method of accounting, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”). In accordance with ASC 805, we use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired.

 

Pro forma adjustments reflected in the unaudited pro forma condensed combined balance sheet are based on items that are factually supportable and directly attributable to the transaction. Pro forma adjustments reflected in the pro forma condensed combined statements of operations are based on items that are factually supportable, directly attributable to the transaction and expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information does not reflect the cost of any integration activities or benefits from the transaction, including potential synergies that may be generated in future periods.

 

Note 2. Description of the Transaction

 

On September 1, 2021, iCoreConnect Inc. (the “Company”) consummated the Asset Purchase Agreement with Spectrum Technology Solutions, LLC.  The aggregate purchase price of $2,000,000 is comprised of cash and stock in iCoreConnect, Inc.

 

Note 3. Purchase Price Allocation

 

The fair value of the consideration transferred was valued as of the date of the acquisition as follows. The source of the cash that funded the purchase was debt taken out by iCoreConnect Inc. prior to the acquisition.

 

STS Purchase Consideration

 

 

 

 

Cash

 

 $ 1,500,000

 

Stockholders Equity

 

 

 500,000

 

Total Purchase Consideration

 

 $ 2,000,000

 

 

 
5

 

 

The preliminary allocation for the consideration recorded for the acquisition is as follows if the acquisition had taken place as of June 30, 2021:

 

Current Assets

 

 $ 185,223

 

Property and Equipment

 

 

 32,000

 

Goodwill

 

 

 1,782,777

 

Total

 

 $ 2,000,000

 

 

The purchase price allocation is preliminary. The purchase price allocation will continue to be preliminary until a third-party valuation is finalized and the fair value and useful life of the assets acquired is determined. The amounts from the final valuation may significantly differ from the preliminary allocation.

 

Note 4. Pro Forma Adjustments

 

The following pro forma adjustments give effect to the transaction.

 

Unaudited Pro Forma Condensed Combined Balance Sheet – As of June 30, 2021

 

Note A

To remove STS assets, liabilities, and equity not purchased pursuant to the asset purchase agreement.

 

Note B

To record purchase consideration and transaction financing. The purchase consideration included cash and common stock in iCoreConnect.  The transaction financing consisted of promissory notes.

 

Note C

To record assets acquired and liabilities assumed from STS at preliminary estimated fair value. The Company has not completed its purchase price allocation and the amounts noted are preliminary.

 

Unaudited Pro Forma Condensed Combined Statement of Operations – For the Six Months Ended June 30, 2021 

 

Note D

To record interest on promissory notes.

   

Unaudited Pro Forma Condensed Combined Statement of Operations – For the Year Ended December 31, 2020

 

Note D

To record interest on promissory notes.

 

 
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