iCoreConnect 10-Q 13 Nov 18 2018 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information	9 Months Ended
	Sep. 30, 2018shares
Document And Entity Information
Entity Registrant Name	iCoreConnect Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	49,315,964
Amendment Flag	false
Entity Central Index Key	1,408,057
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Ex Transition Period	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 477	$ 52
Accounts receivable, net of allowance for doubtful accounts	230	122
Prepaid expenses	12	17
Total current assets	719	191
Property and equipment, net of accumulated depreciation	10	10
Software development costs, net of accumulated amortization	525	484
Acquired technology, net of accumulated amortization	560	630
Goodwill and intangible assets, net of accumulated amortization	432	451
Total long-term assets	1,527	1,575
Total Assets	2,246	1,766
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable and accrued expenses	612	985
Line of credit	498	498
Current maturities of long-term debt	1,606	1,461
Total current liabilities	2,716	2,944
Long-term debt, net of current maturities	97
Deferred revenue	127	86
Total long-term liabilities	224	86
Total Liabilities	2,940	3,030
STOCKHOLDERS' DEFICIT
Preferred stock, Undesignated par value $.001; Authorized 10,000,000 shares; None issued or outstanding
Common stock par value $.001; 600,000,000 shares authorized; Issued and Outstanding: 49,315,964 as of September 30, 2018 and 34,318,198 as of December 31, 2017	48	34
Additional paid-in-capital	69,906	64,856
Accumulated deficit	70,648	(66,154)
TOTAL STOCKHOLDERS' DEFICIT	(694)	(1,264)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 2,246	$ 1,766

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
STOCKHOLDERS' DEFICIT
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	49,315,964	34,318,198
Common stock, shares outstanding	49,315,964	34,318,198

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Consolidated Statements Of Operations
Revenues	$ 271	$ 114	$ 893	$ 468
Cost of Sales	130	113	359	282
Gross Profit	141	1	534	186
Expenses
General and administrative	606	457	2,817	1,634
Depreciation and amortization	100	75	300	219
Total operating expenses	706	532	3,117	1,853
Loss from operations	(565)	(531)	(2,583)	(1,667)
Other expenses
Interest expense	(59)	(57)	(169)	(1,254)
Other expense	8	0	(1,742)	(1)
Total other expense	(51)	(57)	(1,911)	(1,255)
Net loss	$ (616)	$ (588)	$ (4,494)	$ (2,922)
Net loss per share available to common stockholders, basic and diluted	$ (0.01)	$ (0.02)	$ (0.11)	$ (0.28)
Weighted average number of shares, basic and diluted	47,379,032	28,779,483	42,708,594	10,327,898

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (UNAUDITED) - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands	Common Stock	Additional Paid in Capital	Accumulated Deficit	Total
Beginning Balance, Shares at Dec. 31, 2017	34,318,198
Beginning Balance, Amount at Dec. 31, 2017	$ 34	$ 64,856	$ (66,154)	$ (1,264)
Stock issued for cash, Shares	8,231,326
Stock issued for cash,Amount	$ 8	2,341		2,349
Shares issued for services, Shares	6,766,440
Shares issued for services, Amount	$ 6	2,568		2,574
Stock compensation expense		141		141
Net loss			(4,494)	(4,494)
Ending Balance, Shares at Sep. 30, 2018	49,315,964
Ending Balance, Amount at Sep. 30, 2018	$ 48	$ 69,906	$ (70,648)	$ (694)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (4,494)	$ (2,922)
Adjustments to reconcile net (loss) to net cash used in operating activities
Depreciation	3	4
Amortization of software development costs	296	215
Shares issued for employee services
Change in allowance for doubtful accounts	3	(9)
Stock compensation expense	2,715	60
Decrease (increase) in:
Accounts receivable	(111)	33
Prepaid expenses	5	7
Accounts payable and accrued expenses	(38)	465
Deferred revenue	40	24
NET CASH USED IN OPERATING ACTIVITIES	(1,581)	(2,122)
INVESTING ACTIVITIES
Amounts paid for capitalized software development costs	(251)	(238)
NET CASH USED IN INVESTING ACTIVITIES	(251)	(238)
FINANCING ACTIVITIES
Proceeds from long term debt		1,289
Payments on long term debt	(92)	(114)
Proceeds from issuance of common stock	2,349	1,010
NET CASH PROVIDED BY FINANCING ACTIVITIES	2,257	2,185
NET INCREASE (DECREASE) IN CASH	425	(175)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD	52	185
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	477	10
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$ 125	$ 90

NATURE OF OPERATIONS

NATURE OF OPERATIONS	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 1 - NATURE OF OPERATIONS	iCoreConnect Inc. (“iCoreConnect” or the “Company”), a Nevada Corporation, builds cloud based healthcare software. The Company’s focus presently is on four different revenue streams: (1) iCoreConnect’s cloud based exchange, the iCoreExchange, which allows physicians, patients and other members of the healthcare community to exchange patient specific healthcare information securely via the internet, while maintaining compliance with all current Health Insurance Portability and Accountability Act (“HIPAA”) regulations, (2) customized EHR platform technology that is specifically tailored to provide specialized medical practices with a technology that conforms to workflows of that particular medical discipline such as ophthalmology, dentistry, orthopedic and other specialty practices, (3) iCoreConnect’s Meaningful Use Consulting Division assisting both medical and dental healthcare providers becoming compliant to ultimately qualify for federal incentive funds under the Federal Meaningful Use Incentive Funds Program, and (4) International Statistical Classification of Diseases and Related Health Problems (ICD) coding software, a medical classification list by the World Health Organization (WHO). iCoreConnect’s integrated software and service offering is unique in the healthcare space as it enables doctors to meet the increasing regulatory burden associated with secure HIPAA compliant medical records transport with no change in healthcare delivery workflows. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the Securities and Exchange Commission (“SEC”) rules and regulation. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended June 30, 2017 and the six month period ended December 31, 2017, which are included in the Company’s Registration Statement filed on Form 10/A with the SEC on August 17, 2018. The accompanying condensed balance sheet as of December 31, 2017 has been derived from the audited financial statements at that date, but does not include all information and footnotes required by GAAP for complete financial statements. The results of operations for the nine month period ended September 30, 2018 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Readers of this Quarterly Report are strongly encouraged to review the risk factors relating to the Company which are set forth in the Company’s Form 10/A filed with the SEC.

GOING CONCERN

GOING CONCERN	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 2 - GOING CONCERN	The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. For the nine month period ended September 30, 2018, the Company generated an operating loss of $2,583. In addition, the Company has an accumulated deficit and net working capital deficit of $70,648 and $1,997 at September 30, 2018, respectively. The Company’s activities were historically financed through private placements of equity and convertible debt securities. The Company intends to raise additional capital through the issuance of debt or equity securities to fund its operations. The Company is reliant on future fundraising to finance operations in the near future. The financing may not be available on terms satisfactory to the Company, if at all . Currently, management intends to develop a vastly improved healthcare communications system and intends to develop alliances with strategic partners to generate revenues that will sustain the Company. While management believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. Management’s ability to continue as a going concern is ultimately dependent upon its ability to continually increase the Company’s customer base and realize increased revenues from signed contracts. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are customer obligations due under normal trade terms. We maintain an allowance for doubtful accounts for estimated losses resulting from the potential inability of certain customers to make required future payments on amounts due us. Management determines the adequacy of this allowance by periodically evaluating the aging and past due nature of individual customer accounts receivable balances and considering the customer’s current financial situation as well as the existing industry economic conditions and other relevant factors that would be useful in assessing the risk of collectability. If the future financial condition of our customers were to deteriorate, resulting in their inability to make specific required payments, additions to the allowance for doubtful accounts may be required. In addition, if the financial condition of our customers improves and collections of amounts outstanding commence or are reasonably assured, then we may reverse previously established allowances for doubtful accounts. The Company has estimated and recorded an allowance for doubtful accounts of $7 and $5 at September 30, 2018 and December 31, 2017, respectively. Revenue Recognition The Company has four primary sources of revenue: · Electronic Health Records (EHR) licenses and rental services · Encrypted Secure & HIPPA Compliant email services (“Encrypted Secure email”) · Meaningful Use Consulting Services · iCoreCodeGenius ICD Coding Software Effective January 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification 606 (ASC 606), Revenue from Contracts with Customers (In thousands) Legacy GAAP ASC 606 Adjustment Full Retrospective Revenue EHR License revenue 59 62 122 A summary of the impact of the full retrospective transition implementation adjustment on EHR license deferred revenues and stockholders’ deficit as of December 31, 2017 is as follows: (In thousands) Previously Recorded ASC 606 Adjustment Adjusted Balances Deferred EHR Revenues 356 (270 ) 86 Stockholders’ Deficit (66,424 ) 270 (66,154 ) Revenue from EHR software licensing arrangements include private cloud hosting services and post contract support provided to clients that have purchased a perpetual or specific term license to the EHR software solution and have contracted with the Company to host the software. These arrangements provide the client with a contractual right to take possession of the software at any time during the private cloud hosting period without significant penalty and it is feasible for the client to either use the software on its own equipment or to contract with an unrelated third party to host the software. The Company recognizes revenue from the sale of its EHR software license at the time the customer has access to use the software, with deferral of revenues associated with the cloud hosting and post contract support performance objectives, allocated based on relative fair value. The Company defers revenue from the sale of its EHR software products associated with cloud hosting and post contract support performance objectives over the term of the license agreement. Cloud hosting performance objective revenues are deferred based on forecasted cloud storage costs, encrypted secure email performance objective revenues are deferred based on the forecasted sales price of those services to other customers of the Company and customer support performance objective revenues are deferred based on forecasted customer support costs based on Company experience. Encrypted Secure email services are provided on a fee basis as software as a service (“SaaS”) arrangements and are recognized as revenue ratably over the contract terms beginning on the date our solutions are made available to the customer. The initial customer service period is annual, with automatic monthly extensions over which the customer has the right to use the Company’s SaaS Encrypted Secure email solution. Meaningful Use consulting service revenue is recognized in the period that the services are completed and the submission of the customer’s underlying application for Federal Meaningful Use Incentive Funds is received from the relevant taxing authority. iCoreCodeGenius coding services are provided on a fee basis as software as a service (“SaaS”) arrangements and are recognized as revenue ratably over the contract terms beginning on the date the Company’s solutions are made available to the customer. The length of a customer service period varies from multi-year annually renewed to monthly over which such customer has the right to use the Company’s iCoreCodeGenius coding software solution. Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution of securities by adding common stock equivalents, including stock options, shares issuable on exercise of warrants, convertible preferred stock and convertible notes in the weighted average number of shares of common stock outstanding for a period, if dilutive. Common stock equivalents that are anti-dilutive were excluded from the computation of diluted earnings per share which consisted of all outstanding common stock options and warrants and shares from conversion of debt.

COMMON STOCK AND PREFERRED STOC

COMMON STOCK AND PREFERRED STOCK	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 4 - COMMON STOCK AND PREFERRED STOCK	Common Stock The Company is authorized to issue up to 600,000,000 shares of common stock and as of September 30, 2018 had 49,315,964 shares of common stock outstanding. Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock. None were outstanding at either September 30, 2018 or December 31, 2017. Stock Issuances During the nine month period ended September 30, 2018, the Company issued 8,231,326 shares of common stock for cash proceeds of $2,349. Stock Options On July 1, 2018, our Board of Directors extended Mr. McDermott an employment agreement that included an option to purchase 700,000 shares of Common stock, at an exercise price equal to the ten (10) day average closing price of the Company’s common shares prior to the effective date. The options vest as follows: 233,333 shares on July 1, 2018 and 2019, and the remaining 233,234 shares on July 1, 2020. During the nine month period ended September 30, 2018, 133,822 options to purchase shares of common stock granted to employees expired and no options were forfeited or exercised. A summary of option activity for the nine month period ended September 30, 2018, is presented below: Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding - January 1, 2018 198,402 $ 10.40 0.7 $ - Granted 700,000 $ 0.25 9.8 $ - Exercised - - - - Forfeited/expired (133,822 ) $ 9.62 $ - Outstanding - September 30, 2018 764,580 $ 0.42 9.0 $ - Exercisable - September 30, 2018 297,913 $ 0.57 7.8 $ - Nonvested Options Number of Options Weighted Average grant date Fair Value Weighted Average Remaining Years to vest Nonvested - January 1, 2018 18,719 $ 10.40 0.7 Granted 700,000 Vested 252,052 Forfeited/expired - Nonvested - September 30, 2018 466,667 $ 0.13 1.8 Future compensation related to nonvested awards expected to vest of $82 is estimated to be recognized over the weighted average vesting period of approximately 1.8 years. Restricted Stock for Services On November 3, 2017, our Board of Directors authorized the issuance of 2,500,000 restricted shares of common stock to directors of the Company and certain employees according to the terms of the 2016 Employee Long Term Incentive Compensation Plan. Compensation expense related to this grant for the nine month period ended September 30, 2018 was $72 based on the estimated fair value of our common stock of $0.25 per share. Of the 2,500,000 restricted shares of common stock authorized on November 3, 2017, there were 1,731,667 shares vested and 762,333 shares unvested, as of September 30, 2018. Compensation expense of approximately $120 will be recognized in future periods, related to this grant of restricted shares of common stock. On May 22, 2018, our Board of Directors authorized the issuance of 5,462,161 shares of restricted common stock to certain officers and directors of the Company in exchange for past and future services. Of the 5,462,161 restricted shares of common stock authorized on May 22, 2018, there were 3,366,440 shares vested and 2,095,721 shares unvested, as of September 30, 2018. Compensation expense related to this grant for the nine month period ended September 30, 2018 was $907 based on the estimated grant date fair value of our common stock of $0.25 per share. Compensation expense of approximately $458 will be recognized in future periods, related to this grant of restricted shares of common stock. Warrants During the nine month period ended September 30, 2018, common stock warrants were issued in conjunction with the issuance of shares of common stock. During the three month period ended September 30, 2018, the Company issued 2,435,000 warrants related to subscriptions of common stock with an exercise price of $1.35 per share that will expire on December 31, 2020. During the nine month period ended September 30, 2018, the Company issued 1,267,000 warrants related to subscriptions of common stock with an exercise price of $1.35 per share that will expire on December 31, 2019 and 2,435,000 warrants with an exercise price of $1.35 per share that will expire on December 31, 2020. During the nine month period ended September 30, 2018, no warrants were exercised or forfeited and 56,157 warrants expired. The warrants issued by the Company contain a provision that allows the Company to redeem any or all outstanding and unexercised Warrants at a redemption price of $0.001 per Warrant upon fourteen (14) days’ written notice in the event (i) a Registration Statement registering for sale under the Securities Act of 1933, as amended (the “Act”), the shares of the Company’s Common Stock issuable upon exercise of this Warrant, has been filed with the Securities and Exchange Commission and is in effect on the date of written notice and the redemption date contained therein, (ii) there exists on the date of written notice a public trading market for the Company’s Common Stock and such shares are listed for quotation on the NASDAQ Stock Market or OTC Electronic Bulletin Board, (iii) the public trading price of the Company’s Common Stock has equaled or exceeded 150% of the Exercise Price, as then in effect, for twenty (20) of the preceding thirty (30) Trading Days immediately preceding the date of such notice and (iv) the average daily trading volume during such period has been at least 50,000 shares. The holders of the Warrants called for redemption shall have the right to exercise the Warrants until the close of business on the date next preceding the date fixed for redemption.

SOFTWARE DEVELOPMENT COSTS

SOFTWARE DEVELOPMENT COSTS	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 5 - SOFTWARE DEVELOPMENT COSTS	The Company continued to develop its software products with significant features and enhancements during the nine month period ended September 30, 2018 and has continued to capitalize development costs during that period. A summary of the capitalization and amortization of the software development costs is as follows: September 30, December 31, 2018 2017 Development costs $ 1,424 $ 1,176 Less Accumulated amortization (899 ) (692 ) $ 525 $ 484

LINE OF CREDIT

LINE OF CREDIT	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 6 - LINE OF CREDIT	Effective October 29, 2013, the Company entered into a revolving line of credit agreement in the amount of $250, which was increased to $500 on March 12, 2014. The line of credit is collateralized by all of the assets of the Company. The line carries interest at the Wall Street Journal Prime rate + 1.0% with a floor rate of 6.5% (6.5% at September 30, 2018). The outstanding balance on the line of credit was $498 and there was no accrued interest outstanding on the line of credit as of September 30, 2018 and December 31, 2017. Interest is payable monthly and all outstanding principal and unpaid interest is due on July 15, 2019.

LONG TERM DEBT

LONG TERM DEBT	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 7 - LONG TERM DEBT	Outstanding Debt and Other Financing Arrangements On April 1, 2018, we entered into a settlement agreement with a related party, for legal services rendered for the acquisition of Electro-Fish, LLC and a retainer for legal services for future acquisitions. The terms of the settlement agreement included a note payable in the amount of $113 with an interest rate of 8% and repayable in monthly installments, which commenced on May 15, 2018 and end on April 15, 2021. The outstanding balance of the note payable is $97 as of September 30, 2018. On June 30, 2018, we entered into a promissory note with Robert McDermott, the Company’s President and Chief Executive Officer, for unpaid accrued bonuses as of June 30, 2018. The terms of the promissory note in the amount of $225, with an interest rate of 8% and repayable in monthly installments, which commenced on June 30, 2018 with a balloon payment on the maturity date of July 1, 2019. The outstanding balance of the promissory note is $219 as of September 30, 2018. On November 2, 2018, the Company paid the Stockholder convertible notes and accrued interest that were in default as of September 30, 2018. (See Note 10) Our notes payable (including accrued interest) at September 30, 2018 and December 31, 2017 are summarized as follows: September 30 December 31 2018 2017 Note payable bearing interest at 8.5 - 12.0% per annum, in default $ 103 $ 106 Note bearing interest at 8% per annum, in default 488 471 Non-interest bearing note, in default 10 10 Related Party Promissory notes, bearing interest at 8%, due April 15, 2021 97 - Related Party Convertible Promissory notes, bearing interest at 8 - 18%, due July 1, 2019 736 657 Stockholder Convertible notes bearing interest at 18%, in default 269 217 1,703 1,461 Less current maturities (1,606 ) (1,461 ) Total Long-term debt $ 97 $ -

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 8 - CONCENTRATION OF CREDIT RISK	The Company has historically provided financial terms to customers in accordance with what management views as industry norms. Financial terms range from immediate payment for access to the Company’s software products to several months for Meaningful Use consulting services. Management periodically and regularly reviews customer account activity in order to assess the adequacy of allowances for doubtful accounts, considering such factors as economic conditions and each customer’s payment history and creditworthiness. If the financial conditions of our customers were to deteriorate, or if they were otherwise unable to make payments in accordance with management’s expectations, we might have to increase our allowance for doubtful accounts, modify their financial terms and/or pursue alternative collection methods. Revenue concentrations for the nine months ended September 30, 2018 and 2017 and the accounts receivable concentrations at September 30, 2018 and December 31, 2017, expressed as a percentage of the Company’s revenue and accounts receivable, respectively, are as follows: Net Sales for the nine months ended Accounts receivable at September 30, September 30, December 31, 2018 2017 2018 2017 Customer A 30 % 0 % 14 % 40 % Customer B 11 % 0 % 0 % 0 % Customer C 10 % 0 % 42 % 0 %

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 9 - BUSINESS COMBINATIONS	On January 19, 2018, iCoreConnect Inc. acquired all of the outstanding common stock of Electro Fish Media Inc., a Texas corporation, in exchange for 3,400,000 shares of our Common Stock (at an agreed upon price of $0.50 per share). Pursuant to the guidance in FASB Accounting Standards Codification (“ASC”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Note 10 - SUBSEQUENT EVENTS	Since September 30, 2018, the Company has issued 1,100,000 shares of common stock and warrants to purchase 275,000 shares of common stock (expiring June 30, 2020) with an exercise price of $1.35 per share, for cash proceeds totaling $275. On November 2, 2018, the Company paid a Convertible note held by a shareholder of the Company, with a principal amount of $220 and accrued interest of $53. The convertible note had a due date of September 15, 2018, and was in default as of September 30, 2018.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2018
Summary Of Significant Accounting Policies
Accounts Receivable and Allowance for Doubtful Accounts	Accounts receivable are customer obligations due under normal trade terms. We maintain an allowance for doubtful accounts for estimated losses resulting from the potential inability of certain customers to make required future payments on amounts due us. Management determines the adequacy of this allowance by periodically evaluating the aging and past due nature of individual customer accounts receivable balances and considering the customer’s current financial situation as well as the existing industry economic conditions and other relevant factors that would be useful in assessing the risk of collectability. If the future financial condition of our customers were to deteriorate, resulting in their inability to make specific required payments, additions to the allowance for doubtful accounts may be required. In addition, if the financial condition of our customers improves and collections of amounts outstanding commence or are reasonably assured, then we may reverse previously established allowances for doubtful accounts. The Company has estimated and recorded an allowance for doubtful accounts of $7 and $5 at September 30, 2018 and December 31, 2017, respectively.
Revenue Recognition	The Company has four primary sources of revenue: · Electronic Health Records (EHR) licenses and rental services · Encrypted Secure & HIPPA Compliant email services (“Encrypted Secure email”) · Meaningful Use Consulting Services · iCoreCodeGenius ICD Coding Software Effective January 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification 606 (ASC 606), Revenue from Contracts with Customers (In thousands) Legacy GAAP ASC 606 Adjustment Full Retrospective Revenue EHR License revenue 59 62 122 A summary of the impact of the full retrospective transition implementation adjustment on EHR license deferred revenues and stockholders’ deficit as of December 31, 2017 is as follows: (In thousands) Previously Recorded ASC 606 Adjustment Adjusted Balances Deferred EHR Revenues 356 (270 ) 86 Stockholders’ Deficit (66,424 ) 270 (66,154 ) Revenue from EHR software licensing arrangements include private cloud hosting services and post contract support provided to clients that have purchased a perpetual or specific term license to the EHR software solution and have contracted with the Company to host the software. These arrangements provide the client with a contractual right to take possession of the software at any time during the private cloud hosting period without significant penalty and it is feasible for the client to either use the software on its own equipment or to contract with an unrelated third party to host the software. The Company recognizes revenue from the sale of its EHR software license at the time the customer has access to use the software, with deferral of revenues associated with the cloud hosting and post contract support performance objectives, allocated based on relative fair value. The Company defers revenue from the sale of its EHR software products associated with cloud hosting and post contract support performance objectives over the term of the license agreement. Cloud hosting performance objective revenues are deferred based on forecasted cloud storage costs, encrypted secure email performance objective revenues are deferred based on the forecasted sales price of those services to other customers of the Company and customer support performance objective revenues are deferred based on forecasted customer support costs based on Company experience. Encrypted Secure email services are provided on a fee basis as software as a service (“SaaS”) arrangements and are recognized as revenue ratably over the contract terms beginning on the date our solutions are made available to the customer. The initial customer service period is annual, with automatic monthly extensions over which the customer has the right to use the Company’s SaaS Encrypted Secure email solution. Meaningful Use consulting service revenue is recognized in the period that the services are completed and the submission of the customer’s underlying application for Federal Meaningful Use Incentive Funds is received from the relevant taxing authority. iCoreCodeGenius coding services are provided on a fee basis as software as a service (“SaaS”) arrangements and are recognized as revenue ratably over the contract terms beginning on the date the Company’s solutions are made available to the customer. The length of a customer service period varies from multi-year annually renewed to monthly over which such customer has the right to use the Company’s iCoreCodeGenius coding software solution.
Net Loss Per Share	Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution of securities by adding common stock equivalents, including stock options, shares issuable on exercise of warrants, convertible preferred stock and convertible notes in the weighted average number of shares of common stock outstanding for a period, if dilutive. Common stock equivalents that are anti-dilutive were excluded from the computation of diluted earnings per share which consisted of all outstanding common stock options and warrants and shares from conversion of debt.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2018
Summary Of Significant Accounting Policies Tables Abstract
Summary EHR license deferred revenues and stockholders’ deficit	(In thousands) Legacy GAAP ASC 606 Adjustment Full Retrospective Revenue EHR License revenue 59 62 122 (In thousands) Previously Recorded ASC 606 Adjustment Adjusted Balances Deferred EHR Revenues 356 (270 ) 86 Stockholders’ Deficit (66,424 ) 270 (66,154 )

COMMON STOCK AND PREFERRED ST_2

COMMON STOCK AND PREFERRED STOCK (Tables)	9 Months Ended
	Sep. 30, 2018
Common Stock And Preferred Stock
Summary of stock option activity	A summary of option activity for the nine month period ended September 30, 2018, is presented below: Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding - January 1, 2018 198,402 $ 10.40 0.7 $ - Granted 700,000 $ 0.25 9.8 $ - Exercised - - - - Forfeited/expired (133,822 ) $ 9.62 $ - Outstanding - September 30, 2018 764,580 $ 0.42 9.0 $ - Exercisable - September 30, 2018 297,913 $ 0.57 7.8 $ - Nonvested Options Number of Options Weighted Average grant date Fair Value Weighted Average Remaining Years to vest Nonvested - January 1, 2018 18,719 $ 10.40 0.7 Granted 700,000 Vested 252,052 Forfeited/expired - Nonvested - September 30, 2018 466,667 $ 0.13 1.8

SOFTWARE DEVELOPMENT COSTS (Tab

SOFTWARE DEVELOPMENT COSTS (Tables)	9 Months Ended
	Sep. 30, 2018
Software Development Costs
Summary of the capitalization and amortization of the software development costs	September 30, December 31, 2018 2017 Development costs $ 1,424 $ 1,176 Less Accumulated amortization (899 ) (692 ) $ 525 $ 484

LONG TERM DEBT (Tables)

LONG TERM DEBT (Tables)	9 Months Ended
	Sep. 30, 2018
Long-term Debt Tables
Summary of notes payable	Our notes payable (including accrued interest) at September 30, 2018 and December 31, 2017 are summarized as follows: September 30 December 31 2018 2017 Note payable bearing interest at 8.5 - 12.0% per annum, in default $ 103 $ 106 Note bearing interest at 8% per annum, in default 488 471 Non-interest bearing note, in default 10 10 Related Party Promissory notes, bearing interest at 8%, due April 15, 2021 97 - Related Party Convertible Promissory notes, bearing interest at 8 - 18%, due July 1, 2019 736 657 Stockholder Convertible notes bearing interest at 18%, in default 269 217 1,703 1,461 Less current maturities (1,606 ) (1,461 ) Total Long-term debt $ 97 $ -

CONCENTRATION OF CREDIT RISK (T

CONCENTRATION OF CREDIT RISK (Tables)	9 Months Ended
	Sep. 30, 2018
Concentration Of Credit Risk
CONCENTRATION OF CREDIT RISK	Net Sales for the nine months ended Accounts receivable at September 30, September 30, December 31, 2018 2017 2018 2017 Customer A 30 % 0 % 14 % 40 % Customer B 11 % 0 % 0 % 0 % Customer C 10 % 0 % 42 % 0 %

NATURE OF OPERATIONS (Details N

NATURE OF OPERATIONS (Details Narrative)	9 Months Ended
	Sep. 30, 2018
Nature Of Operations
State of incorporation	Nevada

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Going Concern
Loss from operations	$ (565)	$ (531)	$ (2,583)	$ (1,667)
Accumulated deficit	(70,648)		(70,648)		$ 66,154
Working capital deficit	$ (1,997)		$ (1,997)

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
EHR License revenue			$ 122
Deferred EHR Revenues	$ 127	$ 86
Stockholders’ Deficit	$ 70,648	(66,154)
Legacy GAAP [Member]
EHR License revenue			59
ASC 606 Adjustment [Member]
EHR License revenue			$ 62
Deferred EHR Revenues		(270)
Stockholders’ Deficit		270
Previously Reported [Member]
Deferred EHR Revenues		356
Stockholders’ Deficit		$ (66,424)

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Summary Of Significant Accounting Policies Details Narrative Abstract
Allowance for doubtful accounts	$ 7	$ 5

COMMON STOCK AND PREFERRED ST_3

COMMON STOCK AND PREFERRED STOCK (Details)	9 Months Ended
	Sep. 30, 2018USD ($)$ / sharesshares
Options Outstanding
Number of Options Outstanding, Beginning	198,402
Number of Options Outstanding, Granted	700,000
Number of Options Outstanding, Exercised
Number of Options Outstanding, Forfeited/expired	(133,822)
Number of Options Outstanding, Ending	764,580
Number of Options Outstanding, Exercisable Ending	297,913
Weighted Average Exercise Price, Beginning | $ / shares	$ 10.40
Weighted Average Exercise Price, Granted | $ / shares	0.25
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price, Forfeited/expired | $ / shares	9.62
Weighted Average Exercise Price, Ending | $ / shares	0.42
Weighted Average Exercise Price, Exercisable Ending | $ / shares	$ 0.57
Weighted Average Remaining Contractual Term in Years, Beginning	8 months 12 days
Weighted Average Remaining Contractual Term in Years, Granted	9 years 9 months 18 days
Weighted Average Remaining Contractual Term in Years, Exercised
Weighted Average Remaining Contractual Term in Years, Ending	9 years
Weighted Average Remaining Contractual Term in Years, Exercisable Ending	7 years 9 months 18 days
Aggregate Intrinsic Value, Beginning | $
Aggregate Intrinsic Value, Granted | $
Aggregate Intrinsic Value, Exercised | $
Aggregate Intrinsic Value, Forfeited/expired | $
Aggregate Intrinsic Value, Ending | $
Aggregate Intrinsic Value, Exercisable Ending | $
Nonvested Options
Number of Options Nonvested, Beginning	18,719
Number of Options Nonvested, Granted	700,000
Number of Options Nonvested, Vested	252,052
Number of Options Nonvested, Forfeited/expired
Number of Options Nonvested, Ending	466,667
Weighted Average grant date Fair Value Nonvested, Beginning | $ / shares	$ 10.40
Weighted Average grant date Fair Value Nonvested, Ending | $ / shares	$ 0.13
Weighted Average Remaining Years to vest Nonvested, Beginning	8 months 12 days
Weighted Average Remaining Years to vest Nonvested, Ending	1 year 9 months 18 days

COMMON STOCK AND PREFERRED ST_4

COMMON STOCK AND PREFERRED STOCK (Details Narrative) $ / shares in Units, $ in Thousands	Nov. 03, 2017shares	Jul. 31, 2020shares	Jul. 31, 2019shares	Jul. 31, 2018shares	May 22, 2018shares	Sep. 30, 2018USD ($)Integer$ / sharesshares	Dec. 31, 2017shares
Common stock, shares authorized						600,000,000	600,000,000
Common stock, shares outstanding						49,315,964	34,318,198
Preferred stock, shares authorized						10,000,000	10,000,000
Preferred stock, shares outstanding						0	0
Stock issued for cash,Amount | $						$ 2,349
Number of Options Outstanding, Forfeited/expired						(133,822)
Weighted average vesting period						1 year 9 months 18 days
Compensation expense | $						$ 72
Warrants redemption description						<font style="font: 10pt Times New Roman, Times, Serif">Warrants at a redemption price of $0.001 per Warrant upon fourteen (14) days' written notice in the event (i) a Registration Statement registering for sale under the Securities Act of 1933, as amended (the "Act"), the shares of the Company's Common Stock issuable upon exercise of this Warrant, has been filed with the Securities and Exchange Commission and is in effect on the date of written notice and the redemption date contained therein, (ii) there exists on the date of written notice a public trading market for the Company's Common Stock and such shares are listed for quotation on the NASDAQ Stock Market or OTC Electronic Bulletin Board, (iii) the public trading price of the Company's Common Stock has equaled or exceeded 150% of the Exercise Price, as then in effect, for twenty (20) of the preceding thirty (30) Trading Days immediately preceding the date of such notice and (iv) the average daily trading volume during such period has been at least 50,000 shares.</font></p>" id="sjs-G10">&lt;p style="margin: 0; text-align: justify">&lt;font style="font: 10pt Times New Roman, Times, Serif">Warrants at a redemption price of $0.001 per Warrant upon fourteen (14) days' written notice in the event (i) a Registration Statement registering for sale under the Securities Act of 1933, as amended (the &#34;Act&#34;), the shares of the Company's Common Stock issuable upon exercise of this Warrant, has been filed with the Securities and Exchange Commission and is in effect on the date of written notice and the redemption date contained therein, (ii) there exists on the date of written notice a public trading market for the Company's Common Stock and such shares are listed for quotation on the NASDAQ Stock Market or OTC Electronic Bulletin Board, (iii) the public trading price of the Company's Common Stock has equaled or exceeded 150% of the Exercise Price, as then in effect, for twenty (20) of the preceding thirty (30) Trading Days immediately preceding the date of such notice and (iv) the average daily trading volume during such period has been at least 50,000 shares.&lt;/font>&lt;/p>
Warrants redemption price | $ / shares						$ 0.001
Share price per share | $ / shares						$ 0.25
Warrants exercised or forfeited						56,157
Stock Options [Member]
Options vesting		233,234	233,333	233,333
Nonvested Options [Member]
Share-based Compensation | $						$ 82
Employment Agreement [Member] | Stock Options [Member]
Option to purchase common stock shares						700,000
Trading period | Integer						10
Officers And Directors [Member]
Restricted shares of common stock					5,462,161
Compensation expense | $						$ 907
Share price per share | $ / shares						$ 0.25
Officers And Directors [Member] | Restricted Stock [Member]
Compensation expense | $						$ 458
Officers And Directors [Member] | Unvested Shares [Member]
Restricted shares of common stock						2,095,721
Officers And Directors [Member] | Vested Shares [Member]
Restricted shares of common stock						3,366,440
Board of Directors [Member] | 2016 Employee LongTerm Incentive Compensation Plan [Member]
Restricted shares of common stock	2,500,000
Board of Directors [Member] | Restricted Stock [Member]
Compensation expense | $						$ 120
Board of Directors [Member] | Unvested Shares [Member]
Restricted shares of common stock						762,333
Board of Directors [Member] | Vested Shares [Member]
Restricted shares of common stock						1,731,667
Warrant One [Member]
Common stock, shares subscription						1,267,000
Share price per share | $ / shares						$ 1.35
Expire date						Dec. 31, 2019
Warrant [Member]
Common stock, shares subscription						2,435,000
Share price per share | $ / shares						$ 1.35
Expire date						Dec. 31, 2020
Stock Issuances [Member]
Stock issued for cash, Shares						8,231,326
Stock issued for cash,Amount | $						$ 2,349

SOFTWARE DEVELOPMENT COSTS (Det

SOFTWARE DEVELOPMENT COSTS (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Software Development Costs Details Abstract
Development costs	$ 1,424	$ 1,176
Less Accumulated amortization	(899)	(692)
Software development costs, net of accumulated amortization	$ 525	$ 484

LINE OF CREDIT (Details Narrati

LINE OF CREDIT (Details Narrative) - USD ($) $ in Thousands	4 Months Ended
	Mar. 12, 2014	Sep. 30, 2018	Dec. 31, 2017
Revolving line of credit amount	$ 500
Revolving line of credit interest rate description	<font style="font: 10pt Times New Roman, Times, Serif">The line carries interest at the Wall Street Journal Prime rate + 1.0% with a floor rate of 6.5% (6.5% at September 30, 2018).</font></p>" id="sjs-B4">&lt;p style="margin: 0; text-align: justify">&lt;font style="font: 10pt Times New Roman, Times, Serif">The line carries interest at the Wall Street Journal Prime rate + 1.0% with a floor rate of 6.5% (6.5% at September 30, 2018).&lt;/font>&lt;/p>
Line of credit		$ 498	$ 498
October 29, 2013
Revolving line of credit amount		$ 250

LONG TERM DEBT (Details)

LONG TERM DEBT (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Long-term debt, gross	$ 1,703	$ 1,461
Less current maturities	(1,606)	(1,461)
Total Long-term debt	97
Notes Payable [Member]
Long-term debt, gross	103	106
Notes Payable One [Member]
Long-term debt, gross	488	471
Notes Payable Two [Member]
Long-term debt, gross	10	10
Notes Payable Three [Member]
Long-term debt, gross	97
Notes Payable Four [Member]
Long-term debt, gross	736	657
Notes Payable Five [Member]
Long-term debt, gross	$ 269	$ 217

LONG TERM DEBT (Details Narrati

LONG TERM DEBT (Details Narrative) - USD ($) $ in Thousands	Apr. 01, 2018	Jun. 30, 2018	Sep. 30, 2018
Robert McDermott [Member]
Note payable		$ 225	$ 219
Interest rate		8.00%
Debt maturity date		Jul. 1, 2019
Notes Payable [Member]
Note payable	$ 113		$ 97
Interest rate	8.00%

CONCENTRATION OF CREDIT RISK (D

CONCENTRATION OF CREDIT RISK (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Sales Revenue, Net [Member] | Customer A member [Member]
Concentration Risk, Percentage	30.00%	0.00%
Sales Revenue, Net [Member] | Customer B member [Member]
Concentration Risk, Percentage	11.00%	0.00%
Sales Revenue, Net [Member] | Customer C member [Member]
Concentration Risk, Percentage	10.00%	0.00%
Accounts Receivable [Member] | Customer A member [Member]
Concentration Risk, Percentage	14.00%		40.00%
Accounts Receivable [Member] | Customer B member [Member]
Concentration Risk, Percentage	0.00%		0.00%
Accounts Receivable [Member] | Customer C member [Member]
Concentration Risk, Percentage	42.00%		0.00%

BUSINESS COMBINATIONS (Details

BUSINESS COMBINATIONS (Details Narrative) - Electro Fish Media Inc [Member] - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	9 Months Ended
	Jan. 19, 2018	Sep. 30, 2018
Stock issued during period, shares, acquisitions	3,400,000
Business acquisition, share price	$ 0.50
Business acquisition, purchase price		$ 1,700

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Thousands	Nov. 02, 2018	Sep. 30, 2018
Common shares issued		1,100,000
Warrants issued to purchase common shares		275,000
Warrants and rights outstanding, maturity date		Jun. 30, 2020
Warrants exercise price		$ 1.35
Proceeds from issuance of warrants		$ 275
Convertible note	$ 220
Accrued interest	$ 53
Convertible debt maturity date	Sep. 15, 2018