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 March 31, 2021 and the unaudited pro forma condensed combined statements of income for the three months ended March 31, 2021 and for the year ended December 31, 2020 combine the financial statements of iCoreConnect Inc. (“iCoreConnect”), and Heyns Unlimited, LLC (“Heyns”) 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 March 31, 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 three months ended March 31, 2021, as contained in its Quarterly Report on Form 10-Q filed on May 17, 2021 with the SEC.

 

 

 

 

·

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

 

 

 

 

·

Heyns’s unaudited condensed financial statements as of March 31, 2021 and for the three months ended March 31, 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 Heyns 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 Heyns. 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 Three Months Ended March 31, 2021 

       

 

 

iCoreConnect
Inc.

 

 

Heyns

Unlimited, LLC

 

 

Adjustment(s)

 

 

Consolidated

 

Revenue

 

$ 704,001

 

 

$ 292,844

 

 

$ -

 

 

$ 996,845

 

Cost of sales

 

 

240,033

 

 

$ 57,626

 

 

 

-

 

 

 

297,659

 

Gross profit

 

 

463,968

 

 

 

235,218

 

 

 

-

 

 

 

699,186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

856,388

 

 

 

93,522

 

 

 

-

 

 

 

949,910

 

Depreciation and amortization

 

 

252,697

 

 

 

-

 

 

 

-

 

 

 

252,697

 

Total operating expenses

 

 

1,109,085

 

 

 

93,522

 

 

 

-

 

 

 

1,202,607

 

Income (Loss) from operations

 

 

(645,117 )

 

 

141,696

 

 

 

-

 

 

 

(503,421 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(167,797 )

 

 

-

 

 

 

(54,000 )(D)

 

 

(221,797 )

Other income

 

 

-

 

 

 

511

 

 

 

-

 

 

 

511

 

Gain on cancellation of liabilities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total other income (expense)

 

 

(167,797 )

 

 

511

 

 

 

(54,000 )

 

 

(221,286 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$ (812,914 )

 

$ 142,208

 

 

$ (54,000 )

 

$ (724,706 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$ (0.01 )

 

 

-

 

 

 

-

 

 

$ (0.01 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares, basic and diluted

 

 

115,776,822

 

 

 

-

 

 

 

5,000,000

 

 

 

120,776,822

 

 

 
2

 

 

iCoreConnect Inc. 

Unaudited Pro Forma Condensed Combined Statements of Operations 

For the Year Ended December 31, 2020

       

 

 

iCoreConnect Inc.

 

 

Heyns Unlimited, LLC

 

 

Adjustment(s)

 

 

Consolidated

 

Revenue

 

$ 2,123,587

 

 

$ 1,409,560

 

 

$ -

 

 

$ 3,533,147

 

Cost of sales

 

 

1,008,843

 

 

$ 220,257

 

 

 

-

 

 

 

1,229,100

 

Gross profit

 

 

1,114,744

 

 

 

1,189,303

 

 

 

-

 

 

 

2,304,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

3,447,014

 

 

 

344,662

 

 

 

-

 

 

 

3,791,676

 

Depreciation and amortization

 

 

906,060

 

 

 

7,124

 

 

 

-

 

 

 

913,184

 

Total operating expenses

 

 

4,353,074

 

 

 

351,785

 

 

 

-

 

 

 

4,704,859

 

Income (Loss) from operations

 

 

(3,238,330 )

 

 

837,518

 

 

 

-

 

 

 

(2,400,812 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(238,820 )

 

 

-

 

 

 

(216,000 )(D)

 

 

(454,820 )

Other income (expense)

 

 

(50,733 )

 

 

3,187

 

 

 

-

 

 

 

(47,546 )

Gain on cancellation of liabilities

 

 

36,642

 

 

 

33,905

 

 

 

-

 

 

 

70,547

 

Total other income (expense)

 

 

(252,911 )

 

 

37,092

 

 

 

(2,16,000 )

 

 

(431,819 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$ (3,491,241 )

 

$ 874,610

 

 

$ (2,16,000 )

 

$ (2,832,631 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$ (0.05 )

 

 

-

 

 

 

-

 

 

$ (0.03 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares, basic and diluted

 

 

76,459,645

 

 

 

-

 

 

 

5,000,000

 

 

 

81,459,645

 

 

 
3

 

 

iCoreConnect Inc. 

Unaudited Pro Forma Condensed Combined Balance Sheets  

March 31, 2021 

      

 

 

iCoreConnect
Inc.

 

 

Heyns Unlimited
LLC

 

 

Adjustment(s)

 

 

Consolidated

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$ 194,174

 

 

$ 63,348

 

 

$ (36,404 )(A)

 

$ 221,118

 

Accounts receivable, net

 

 

176,958

 

 

$ 43,135

 

 

 

(43,135 )(A)

 

 

176,958

 

Loans receivable

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Prepaid expenses and other current assets

 

 

48,572

 

 

 

-

 

 

 

-

 

 

 

48,572

 

Total current assets

 

 

419,704

 

 

 

106,483

 

 

 

(79,539 )

 

 

446,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,721

 

 

 

60,338

 

 

 

(50,463 )(A)

 

 

11,596

 

Right of use lease asset - operating

 

 

150,477

 

 

 

-

 

 

 

-

 

 

 

150,477

 

Software development costs, net

 

 

711,722

 

 

 

-

 

 

 

-

 

 

 

711,722

 

Acquired technology, net

 

 

635,862

 

 

 

-

 

 

 

-

 

 

 

635,862

 

Customer relationships, net

 

 

341,310

 

 

 

-

 

 

 

-

 

 

 

341,310

 

Goodwill

 

 

491,376

 

 

 

-

 

 

 

2,274,366 (C)

 

 

2,765,742

 

Total long-term assets

 

 

2,332,468

 

 

 

60,338

 

 

 

2,223,903

 

 

 

4,616,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$ 2,752,172

 

 

$ 166,821

 

 

$ 2,144,364

 

 

$ 5,063,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ 985,317

 

 

$ 16,974

 

 

$ (5,789 )(A)

 

$ 996,502

 

Operating lease liability, current portion

 

 

77,461

 

 

 

-

 

 

 

-

 

 

 

77,461

 

Notes payable

 

 

965,366

 

 

 

-

 

 

-

(A)

 

 

965,366

 

Deferred revenue, current portion

 

 

13,239

 

 

 

-

 

 

 

-

 

 

 

13,239

 

Total current liabilities

 

 

2,041,383

 

 

 

16,974

 

 

 

(5,789 )

 

 

2,052,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease liability, net of current portion

 

 

62,660

 

 

 

-

 

 

 

-

 

 

 

62,660

 

Deferred revenue, net of current portion

 

 

71,951

 

 

 

-

 

 

 

-

 

 

 

71,951

 

Notes payable, net of current portion

 

 

-

 

 

 

-

 

 

 

1,800,000 (B)

 

 

1,800,000

 

Total long-term liabilities

 

 

134,611

 

 

 

-

 

 

 

1,800,000

 

 

 

1,934,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

2,175,994

 

 

 

16,974

 

 

 

1,794,211

 

 

 

3,987,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock par value $0.001; 600,000,000 shares authorized; Issued and Outstanding: 124,503,233 as of March 31, 2021 and 90,081,336 as of December 31, 2020

 

 

124,503

 

 

 

-

 

 

 

-

 

 

 

124,503

 

Additional paid-in-capital

 

 

79,095,670

 

 

 

-

 

 

 

474,366 (B)

 

 

79,570,036

 

Accumulated equity (deficit)

 

 

(78,643,995 )

 

 

149,847

 

 

 

(124,213 )(A)

 

 

(78,618,361 )
TOTAL STOCKHOLDERS' EQUITY

 

 

576,178

 

 

 

149,847

 

 

 

350,153

 

 

 

1,076,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$ 2,752,172

 

 

$ 166,821

 

 

$ 2,144,364

 

 

$ 5,063,357

 

 

 
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 Heyns Unlimited, 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 three months ended March 31, 2021 and for the year ended December 31, 2020 and on March 31, 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 April 23, 2021, iCoreConnect Inc., a Nevada corporation (“Buyer”), acquired substantially all of the assets and business of Heyns Unlimited LLC, an Arizona limited liability company, doing business as Advantech (“Seller”), in exchange for (i) 5,000,000 shares of restricted Common Stock of Buyer, (ii) $1,800,000 in cash and (iii) the assumption of certain liabilities and obligations of Seller.

 

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.

 

Heyns Unlimited, LLC Purchase Consideration

 

 

 

 

Cash

 

$ 1,800,000

 

Stockholders Equity

 

 

500,000

 

Total Purchase Consideration

 

$ 2,300,000

 

 

 

 
5

 

  

The preliminary allocation for the consideration recorded for the acquisition is as follows if the acquisition had taken place as of March 31, 2021:

 

Current Assets

 

$ 26,944

 

Property and Equipment

 

 

9,875

 

Goodwill

 

 

2,274,366

 

Accounts Payable and accrued expenses

 

 

(11,185

Total

 

$ 2,300,000

 

 

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 March 31, 2021

 

Note A

To remove Heyns 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 Heyns 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 Three Months Ended March 31, 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.

  

 
6