Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 23, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | iCoreConnect Inc. | |
Entity Central Index Key | 0001408057 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 151,613,399 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-52765 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 13-4182867 | |
Entity Address Address Line 1 | 13506 Summerport Village Pkwy #160 | |
Entity Address City Or Town | Windermere | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 34786 | |
City Area Code | 888 | |
Local Phone Number | 810-7706 | |
Security 12b Title | Common Stock, $.001 par value | |
Trading Symbol | ICCT | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 846,039 | $ 7,619 |
Accounts receivable, net | 233,915 | 126,472 |
Prepaid expenses and other current assets | 132,019 | 20,103 |
Total current assets | 1,211,973 | 154,194 |
Property and equipment, net | 15,090 | 2,405 |
Right of use lease asset - operating | 118,182 | 150,477 |
Software development costs, net | 698,349 | 768,907 |
Acquired technology, net | 517,929 | 753,794 |
Customer relationships, net | 1,855,664 | 369,524 |
Goodwill | 1,291,109 | 491,376 |
Total long-term assets | 4,496,323 | 2,536,483 |
TOTAL ASSETS | 5,708,296 | 2,690,677 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
Accounts payable and accrued expenses | 833,416 | 1,664,125 |
Operating lease liability, current portion | 47,035 | 89,088 |
Notes payable | 2,372,271 | 1,429,207 |
Deferred revenue, current portion | 31,586 | 2,775 |
Total current liabilities | 3,284,308 | 3,185,195 |
Operating lease liability, net of current portion | 53,699 | 61,389 |
Deferred revenue, net of current portion | 20,743 | 73,033 |
Total long-term liabilities | 74,442 | 134,422 |
TOTAL LIABILITIES | 3,358,750 | 3,319,617 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
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 | 90,081 |
Additional paid-in-capital | 81,143,985 | 77,112,060 |
Accumulated deficit | (78,946,052) | (77,831,081) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 2,349,546 | (628,940) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 5,708,296 | $ 2,690,677 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
STOCKHOLDERS' EQUITY | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 151,613,399 | 90,081,336 |
Common stock, shares Outstanding | 151,613,399 | 90,081,336 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||
Revenue | $ 981,378 | $ 472,000 | $ 1,685,379 | $ 978,000 |
Cost of sales | 267,728 | 210,000 | 507,761 | 429,000 |
Gross profit | 713,650 | 262,000 | 1,177,618 | 549,000 |
Expenses | ||||
Selling, general and administrative | 1,003,870 | 870,000 | 1,860,258 | 1,679,000 |
Depreciation and amortization | 250,715 | 225,000 | 503,412 | 448,000 |
Total operating expenses | 1,254,585 | 1,095,000 | 2,363,670 | 2,127,000 |
Loss from operations | (540,935) | (833,000) | (1,186,052) | (1,578,000) |
Other income (expense) | ||||
Interest expense | (92,526) | (34,000) | (260,323) | (69,000) |
Other income | 0 | 10,000 | 0 | 10,000 |
Gain on cancellation of liabilities | 331,404 | 0 | 331,404 | 0 |
Total other income (expense) | 238,878 | (24,000) | 71,081 | (59,000) |
Net loss | $ (302,057) | $ (857,000) | $ (1,114,971) | $ (1,637,000) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance, shares at Dec. 31, 2019 | 67,476,089 | |||
Balance, amount at Dec. 31, 2019 | $ 465,000 | $ 67,000 | $ 74,738,000 | $ (74,340,000) |
Stock issued for cash and conversion of notes payable, shares | 2,336,255 | |||
Stock issued for cash and conversion of notes payable, amount | 590,000 | $ 3,000 | 587,000 | 0 |
Stock issued for services | 0 | $ 0 | 0 | 0 |
Stock compensation expense, shares | 131,250 | |||
Stock compensation expense, amount | 95,000 | $ 0 | 95,000 | 0 |
Stock issued for asset acquisition of TrinIT, shares | 730,000 | |||
Stock issued for asset acquisition of TrinIT , amount | 183,000 | $ 1,000 | 182,000 | 0 |
Net loss | (780,000) | $ 0 | 0 | (780,000) |
Balance, shares at Mar. 31, 2020 | 70,673,594 | |||
Balance, amount at Mar. 31, 2020 | 553,000 | $ 71,000 | 75,602,000 | (75,120,000) |
Balance, shares at Dec. 31, 2019 | 67,476,089 | |||
Balance, amount at Dec. 31, 2019 | 465,000 | $ 67,000 | 74,738,000 | (74,340,000) |
Stock issued for services | 0 | |||
Net loss | (1,637,000) | |||
Balance, shares at Jun. 30, 2020 | 73,473,452 | |||
Balance, amount at Jun. 30, 2020 | 205,000 | $ 73,000 | 76,109,000 | (75,977,000) |
Balance, shares at Mar. 31, 2020 | 70,673,594 | |||
Balance, amount at Mar. 31, 2020 | 553,000 | $ 71,000 | 75,602,000 | (75,120,000) |
Stock compensation expense, shares | 1,617,861 | |||
Stock compensation expense, amount | 225,000 | $ 1,000 | 224,000 | 0 |
Net loss | (857,000) | $ 0 | 0 | (857,000) |
Stock issued for cash, shares | 100,000 | |||
Stock issued for cash, amount | 25,000 | $ 0 | 25,000 | 0 |
Stock issued for conversion of note payable, shares | 76,997 | |||
Stock issued for conversion of note payable, amount | 8,000 | $ 0 | 8,000 | 0 |
Stock issued for conversion of accounts payable, shares | 1,000,000 | |||
Stock issued for conversion of accounts payable, amount | 250,000 | $ 1,000 | 249,000 | |
Stock issued for stock option exercises, shares | 5,000 | |||
Stock issued for stock option exercises, amount | 1,000 | $ 0 | 1,000 | 0 |
Balance, shares at Jun. 30, 2020 | 73,473,452 | |||
Balance, amount at Jun. 30, 2020 | 205,000 | $ 73,000 | 76,109,000 | (75,977,000) |
Balance, shares at Dec. 31, 2020 | 90,081,336 | |||
Balance, amount at Dec. 31, 2020 | (628,940) | $ 90,081 | 77,112,060 | (77,831,081) |
Stock compensation expense, shares | 3,968,795 | |||
Stock compensation expense, amount | 118,796 | $ 3,969 | 114,827 | 0 |
Net loss | (812,914) | $ 0 | 0 | (812,914) |
Stock issued for cash, shares | 22,504,600 | |||
Stock issued for cash, amount | 1,417,313 | $ 22,505 | 1,394,808 | 0 |
Stock issued for conversion of fees for services payable, shares | 7,948,502 | |||
Stock issued for conversion of fees for services payable, amount | 481,923 | $ 7,948 | 473,975 | 0 |
Balance, shares at Mar. 31, 2021 | 124,503,233 | |||
Balance, amount at Mar. 31, 2021 | 576,178 | $ 124,503 | 79,095,670 | (78,643,995) |
Balance, shares at Dec. 31, 2020 | 90,081,336 | |||
Balance, amount at Dec. 31, 2020 | (628,940) | $ 90,081 | 77,112,060 | (77,831,081) |
Stock issued for services | 0 | |||
Net loss | (1,114,971) | |||
Balance, shares at Jun. 30, 2021 | 151,613,399 | |||
Balance, amount at Jun. 30, 2021 | 2,349,546 | $ 151,613 | 81,143,985 | (78,946,052) |
Balance, shares at Mar. 31, 2021 | 124,503,233 | |||
Balance, amount at Mar. 31, 2021 | 576,178 | $ 124,503 | 79,095,670 | (78,643,995) |
Stock compensation expense, shares | 3,115,166 | |||
Stock compensation expense, amount | 68,945 | $ 3,115 | 65,830 | 0 |
Net loss | (302,057) | $ 0 | 0 | (302,057) |
Stock issued for cash, shares | 16,015,000 | |||
Stock issued for cash, amount | 1,503,500 | $ 16,015 | 1,487,485 | 0 |
Stock issued for convertible debt, shares | 2,730,000 | |||
Stock issued for convertible debt, amount | 2,730 | $ 2,730 | 0 | 0 |
Stock issued for asset acquisition of Advantech, shares | 5,000,000 | |||
Stock issued for asset acquisition of Advantech, amount | 500,000 | $ 5,000 | 495,000 | |
Stock issued for asset acquisition of BCS, shares | 250,000 | |||
Stock issued for asset acquisition of BCS, amount | 250 | $ 250 | 0 | 0 |
Balance, shares at Jun. 30, 2021 | 151,613,399 | |||
Balance, amount at Jun. 30, 2021 | $ 2,349,546 | $ 151,613 | $ 81,143,985 | $ (78,946,052) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITTIES | ||
Net loss | $ (1,114,971) | $ (1,637,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 1,418 | 5,000 |
Amortization expense | 469,699 | 443,000 |
Change in allowance for doubtful accounts | 0 | 0 |
Gain on cancellation of liabilities | (331,404) | 0 |
Stock issued for services | 0 | 0 |
Stock compensation expense | 187,741 | 320,000 |
Non-cash interest expense | 26,858 | 12,000 |
Changes in assets and liabilities: | ||
Accounts receivable | (107,443) | (73,000) |
Fixed assets | (4,228) | 0 |
Prepaid expenses | (111,916) | 2,000 |
Right of use asset, net of lease liability | (17,448) | (2,000) |
Accounts payable and accrued expenses | (11,174) | 255,000 |
Deferred revenue | (23,479) | (13,000) |
NET CASH USED IN OPERATING ACTIVITIES | (1,036,347) | (688,000) |
INVESTING ACTIVITIES | ||
Cash portion of consideration paid to acquire Advantech/BCS | (1,850,022) | (375,000) |
Additions to capitalized software | (108,752) | (311,000) |
NET CASH USED IN INVESTING ACTIVITIES | (1,958,774) | (686,000) |
FINANCING ACTIVITES | ||
Net proceeds from debt | 1,795,881 | 416,000 |
Payments on debt | (875,887) | (71,000) |
Proceeds from issuance of common stock | 2,920,813 | 595,000 |
Proceeds from exercise of employee stock options | 0 | 1,000 |
Conversion of accounts payable into common stock | (7,266) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,833,541 | 941,000 |
NET CHANGE IN CASH | 838,420 | (433,000) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD | 7,619 | 445,000 |
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 846,039 | 12,000 |
Cash paid during the period for interest | 233,465 | 49,000 |
Stock issued for acquisitions | 500,250 | 183,000 |
Stock issued for acquisition of technology | 0 | 0 |
Stock issued for conversion of convertible notes payable | 0 | 28,000 |
Stock issued for conversion of notes payable | 0 | 0 |
Stock issued for conversion of accounts payable | $ (7,266) | $ 250,000 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2021 | |
NATURE OF OPERATIONS | |
1. NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS iCoreConnect Inc., (the “Company”), a Nevada Corporation, develops and markets secure cloud-based HIPAA compliant software as a service (SaaS) focused on compliance, workflow/productivity, and electronic health records systems. The Company also offers both managed IT (MSP) and managed software as a service (MSaaS) with recurring revenue subscriptions. Our core services technology can be adopted to other vertical markets that require a high degree of secure data communication, such as the legal, financial and education sectors. Software as a Service (SaaS) Offerings The Company currently markets secure HIPAA compliant cloud-based software as a service (SaaS) offering under the names of iCoreExchange, iCoreCodeGenius, iCoreSecure, iCoreMD, iCoreDental, iCoreMobile, iCoreHuddle, iCoreRx, iCorePDMP, iCoreEPCS, and iCorePay. The Company’s software is sold under annual recurring revenue subscriptions. iCoreExchange iCoreExchange provides a secure, HIPAA compliant email solution using the Direct Protocol that allows doctors to send and receive secure email with attachments to and from other healthcare professionals in the network. iCoreExchange also provides a secure email mechanism to communicate with users outside the exchange e.g., patients and referrals. Users have the ability to build a community, access other communities and increase referrals and collaboration. Users can email standard office documents, JPEG, PDF as well as files with discrete data, Consolidated Clinical Document Architecture (“CCDA”), which can then be imported and accessed on most Electronic Health Record (EHR) and Practice Management systems in a HIPAA compliant manner. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires providers and healthcare professionals to transmit encrypted personal health information via electronic means. iCoreCodeGenius Users can document any medical condition in 60 seconds or less. It includes a full ICD-10 code lookup and guidance, automatic prompting of comorbidities and Hierarchical Condition Category’s (HCC) appropriate reimbursement with a high degree of accuracy, and the ability to reduce or eliminate queries and denials. iCoreSecure iCoreMD iCoreDental -- Our cloud-based software was certified in November 2015 by the Office of the National Coordinator for Health Information Technology (ONC), certificate number 150120r0. iCoreMobile -- iCoreHuddle – iCoreRx – IT Managed Services - The MSP approach, by using preventative measures, keeps computers and networks up and running while data is accessible and safeguarded. Installation of critical patches and updates to virus protection are automated. Systems are monitored and backed up in real-time. They are fixed or upgraded before they cause a service disruption. A Unified Threat Management solution is deployed to protect against virus, malware, SPAM, phishing and ransomware attacks. All support is delivered at a predictable monthly cost. Going forward, by leveraging managed services with our expertise in cloud computing, our customers can easily scale their business without extensive capital investment or disruption in services. The Company is competitively positioned to address the growing need for managed services: · Our current and future customers need managed IT services, along with cloud computing, storage and HIPAA compliant backup and encryption. · Managed service providers that can support the migration to cloud computing are in high demand. · The decision makers for our current technology and those for managed services are, in many cases, the same person or group of people. · Our management team has decades of experience operating successful IT companies. · The MSP revenue model matches our SaaS, MSaaS and MRR models. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNFICANT ACCOUNTING POLICES 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 regulations. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2020, which are included in the Company’s Annual Report filed on Form 10-K with the SEC on April 15, 2021. The accompanying balance sheet as of December 31, 2020 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 six-month period ended June 30, 2021 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-K filed with the SEC. Basis of Presentation and Principles of Consolidations The accompanying consolidated financial statements are presented in United States dollars and include the accounts of the Company’s wholly owned subsidiaries, with all intercompany transactions eliminated. They have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States (GAAP). Significant accounting principles followed by the Company and the methods of applying those principles, which materially affect the determination of financial position, results of operations and cash flows are summarized below. Fair Value of Financial Instruments The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Cash and Cash Equivalents The Company classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at United States banks are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit. 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 $76,531 and $77,000 as of June 30, 2021 and December 31, 2020, respectively. Property, Equipment and Depreciation Property, equipment, and leasehold improvements are recorded at their historical cost. Depreciation and amortization have been determined using the straight-line method over the estimated useful lives of the assets which are computers and office equipment (3 years) and for office furniture and fixtures (7 years). The cost of repairs and maintenance is charged to operations in the period incurred. Software Development Costs and Acquired Software The Company accounts for software development costs, including costs to develop software products or the software component of products to be sold to external users. In accordance with ASC 985-730, Computer Software Research and Development, research and planning phase costs are expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs are capitalized. We have determined that technological feasibility for our products to be marketed to external users was reached before the release of those products. As a result, the development costs and related acquisition costs after the establishment of technological feasibility were capitalized as incurred. Capitalized costs for software to be sold to external users and software acquired in a business combination are amortized based on current and projected future revenue for each product with an annual minimum equal to the straight-line amortization over three years. Impairment of Long-Lived Assets Long lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount that the carrying amount of the asset exceeds the fair value of the asset. Goodwill Goodwill consists of the purchase price of business acquisitions in excess of the fair value of the net assets acquired. Goodwill is reviewed for impairment annually or when events or circumstances indicate that the carrying value of the reporting unit may exceed its fair value. If the carrying value of a reporting unit exceeds the fair value, an impairment loss will be recognized. The Company did not recognize any impairment charges for the fiscal quarter ended June 30, 2021 and 2020. We are required to test our goodwill for impairment at least annually, or more frequently if conditions indicate that an impairment may have occurred. Goodwill is tested for impairment at the asset level. Our reporting units are acquired companies at which discrete financial information may be available and for which operating results are regularly reviewed by our chief operating decision maker to allocate resources and assess performance. We have the option to qualitatively or quantitatively assess goodwill for impairment and, in 2020, we evaluated our goodwill using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount, goodwill is not impaired. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying amount, we would further evaluate for potential impairment. As of June 30, 2021, we had $1.291 million of Goodwill on our balance sheet associated with four acquisitions, ICD Logic, TrinIT, and Advantech. ICD Logic related goodwill, which accounts for $0.361 million of the total Goodwill balance is the basis for the underlying technology associated with one of the Company’s faster growing and more promising SaaS offerings. TrinIT related Goodwill accounts for $0.130 million of the total Goodwill balance. The TrinIT acquisition was made in 2020 and is performing to expectations. Advantech accounted for $.799 million. During 2021, there were no indications of a triggering event at the 2 reporting units. The annual goodwill impairment analysis resulted in no indications of impairment in 2020 or 2019. We are subject to financial statement risk to the extent that our goodwill become impaired due to decreases in the fair value. A future decline in performance, decreases in projected growth rates or margin assumptions or changes in discount rates could result in a potential impairment, which could have a material adverse impact on our financial position and results of operations. Revenue Recognition We have 5 primary sources of revenue as of June 30, 2021: 1. ePrescription Software 2. IT Managed Services 3. Encrypted and HIPAA Compliant Secure email 4. ICD Coding Software 5. Electronic Health Records (EHR/Practice Management) software 1) ePrescription software services are provided on an annual basis using the software as a service (‘SaaS’) model with revenue recognized ratably over the contract term. 2) Managed IT services – Consist of 3 revenue streams. (i) Monthly recurring “Managed Service Provider (MSP)” and MSaaS revenue, (ii) periodic sale and installation of IT related hardware, and (iii) custom IT projects. The MSP and MSaaS model revenue is recognized monthly on a recurring basis while the revenue relating to IT hardware and custom IT projects is recognized when the services are performed. 3) Encrypted HIPAA compliant secure email services are provided on an annual subscription basis using the software as a service (“SaaS”) model with revenues recognized ratably over the contract term. 4) ICD Coding Software provides the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD), a medical classification list by the World Health Organization (WHO). It contains codes for diseases, signs and symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or diseases. ICD coding services are provided on an annual subscription basis using the software as a service (“SaaS”) model with revenues recognized ratably over the contract term. 5) Revenue from Practice Management software licensing arrangements are based on subscription basis using the software as a service (“SaaS”) model with revenues recognized ratably over the contract term. We recognize revenue for our service in accordance with accounting standard ASC 606. Our customers are acquired through our own salesforce and through the referrals from our many state association marketing partners. We primarily generate revenue from multiple SaaS and MSaaS offerings, which typically include subscriptions to our online software solutions. The Company’s secondary source of revenue is professional services and other revenue related to customer onboarding, IT services and equipment sales that often precede a subscription service offering purchased by the customer. Eighty-four percent of our revenue is subscription based with the remainder being professional services and other IT related revenue. The geographic concentration of our revenue is 100% in North America. Our customers do not have the right to take possession of the online software solution. Revenue from subscriptions, including additional fees for items such as incremental contacts, is recognized ratably over the subscription period beginning on the date the subscription is made available to customers. All subscription contracts are one year. We recognize revenue from on-boarding services and equipment as the services are provided. Amounts billed that have not yet met the applicable revenue recognition criteria are recorded as deferred revenue. Accounting for Derivative Instruments The Company accounts for derivative instruments in accordance with ASC 815, which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible debt and preferred stock instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. Income Taxes The Company follows the asset and liability approach to accounting for income taxes. Under this method, deferred tax assets and liabilities are measured based on differences between the financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that are expected to be in effect when differences are expected to reverse. Valuation allowances are established when it is necessary to reduce deferred income tax assets to the amount, if any, expected to be realized in future years. ASC 740, Accounting for Income taxes (“ASC 740”), requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent we believe a portion more likely than not will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative loss experience and expectations of future taxable income by taxing jurisdictions, the carry forwarding periods available to us for tax reporting purposes and other relevant factors. The Company has not recognized a liability for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits or penalties has not been provided since there has been no unrecognized benefit or penalty. If there were an unrecognized tax benefit or penalty, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company files U.S. Federal income tax returns and various returns in state jurisdictions. The Company’s open tax years subject to examination by the Internal Revenue Service and the state Departments of Revenue generally remain open for three years from the date of filing. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and to the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. 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 other Common Stock equivalents, including stock options, shares issuable on exercise of warrants, convertible preferred stock and convertible notes in the weighted average number of common shares 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. Stock-Based Compensation The Company uses the fair value method to account for the granting of options to purchase shares of its stock whereby all awards are recorded at fair value on the date of the grant. Share based awards with a performance condition are measured based on the probable outcome of that performance condition during the requisite service period. Such an award with a performance condition is accrued if it is probable that a performance condition will be achieved. Compensation costs for stock-based payments that do not include performance conditions are recognized on a straight-line basis. The fair value of all share purchase options is expensed over their requisite service period with a corresponding increase to additional capital surplus. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in additional capital surplus, is recorded as an increase to share capital. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option pricing model that uses the assumptions noted in the table below. The Company estimates the fair value of its common stock using the closing stock price of its common stock on the option grant date. The Company estimates the volatility of its common stock at the date of grant based on its historical stock prices. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The fair value of shares of restricted stock issued are determined by the Company based on the estimated fair value of the Company’s common stock. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), The Company does not believe that any other issued, but not yet effective accounting standards, if currently adopted, will have a material effect on the Company’s consolidated financial position, results of operations and cash flows. 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 six-month period ended June 30, 2021, the Company generated an operating loss of $1,164,255. In addition, the Company has an accumulated deficit, total stockholders’ equity and net working capital deficit of $78,995,337, $2,300,261 and $2,106,574, respectively, on June 30, 2021. The Company’s activities were primarily financed through private placements of equity securities. The Company intends to raise additional capital through the issuance of debt and/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. In light of these matters, there is substantial doubt that the Company will be able to continue as a going concern. 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. |
COMMON STOCK
COMMON STOCK | 6 Months Ended |
Jun. 30, 2021 | |
COMMON STOCK | |
3. COMMON STOCK | 3. COMMON STOCK Stock Issuances In January of 2021, executives and employees converted notes payable and services rendered of $481,923 into approximately 7.9 million shares of Common Stock. In the first and second quarter of 2021, the Company issued approximately 38.5 million shares of Common stock for $2.920 million in cash. In January of 2021, the Company and a finance company entered into a Purchase Agreement between the Company and an Investor (the “Investor”). The Purchase Agreement is an equity line of credit and the Investor committed to purchase, subject to certain restrictions and conditions, up to $5.0 million worth (the “Commitment”) of the Company’s common stock over a period of 24 months from the effectiveness of the registration statement registering for resale shares purchased by the Investor pursuant to the Purchase Agreement. The Company has no other lines of credit as of June 30, 2021. Stock Options During the six-month period ended June 30, 2021, no 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 six-month period ended June 30, 2021, is presented below: 2021 Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance Outstanding - January 1, 2021 1,405,000 $ 0.24 7.7 $ - Granted - $ - Exercised - $ - Forfeited - $ - Balance Outstanding - June 30, 2021 1,405,000 $ 0.24 7.4 $ - Exercisable - June 31, 2021 1,405,000 $ 0.24 7.4 $ - 2021 Nonvested Options Number of Options Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested - January 1, 2021 - $ - 0.0 Granted - $ - Vested - $ - Forfeited/expired - Nonvested - June 30, 2021 - $ - 0.00 Common Stock Warrants The Company typically issues warrants to individual investors and institutions to purchase shares of the Company’s Common Stock in connection with public and private placement fundraising activities. Warrants may also be issued to individuals or companies in exchange for services provided for the Company. The warrants are typically exercisable six months after the issue date, expire in five years, and contain a cash exercise provision and registration rights. Common Stock Warrants - In April and May of 2021, in connection with the issuance of the Company’s Convertible Promissory Notes, the Company issued warrants to purchase the Company’s Common Stock. These warrants were designated Common Stock Warrants with an initial term of 5 years and an exercise prices of $0.20 and $0.25. The Company may not effect, and a holder will not be entitled to, convert the Common Stock Warrants, which, upon giving effect to such conversion or exercise, would cause the aggregate number of shares of common stock beneficially owned by the Purchaser (together with its affiliates) to exceed 4.99%. As of June 30, 2021, the number of shares issuable upon exercise of the Common Stock Warrants were 9.1 million shares. Type Issue Date Shares Price Expiration Investors 4/19/2021 1,300,000 $ 0.20 4/19/2026 Investors 4/19/2021 1,300,000 $ 0.25 4/19/2026 Investors 4/22/2021 1,300,000 $ 0.20 4/22/2026 Investors 4/22/2021 1,300,000 $ 0.25 4/22/2026 Investors 4/30/2021 650,000 $ 0.20 4/30/2026 Investors 4/30/2021 650,000 $ 0.25 4/30/2026 Investors 5/4/2021 650,000 $ 0.20 5/4/2026 Investors 5/4/2021 650,000 $ 0.25 5/4/2026 Investors 5/19/2021 650,000 $ 0.20 5/19/2026 Investors 5/19/2021 650,000 $ 0.25 5/16/2026 Total 9,100,000 |
SOFTWARE DEVELOPMENT COSTS
SOFTWARE DEVELOPMENT COSTS | 6 Months Ended |
Jun. 30, 2021 | |
SOFTWARE DEVELOPMENT COSTS | |
4. SOFTWARE DEVELOPMENT COSTS | 4. SOFTWARE DEVELOPMENT COSTS The Company continued to develop its software products with significant features and enhancements during the six-month period ended June 30, 2021 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: June 30, December 31, 2021 2020 Development costs $ 2,587,889 $ 2,479,137 Acquired technology 1,527,186 1,527,186 Less accumulated amortization (2,898,798 ) (2,483,622 ) $ 1,216,278 $ 1,522,701 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
5. COMMITMENTS AND CONTINGENCIES | 5. COMMITMENTS AND CONTINGENCIES On November 15, 2017, the Company signed a three-year lease agreement for approximately 4,100 square feet of office space located in Winter Garden, Florida in which the Company has its headquarters. The lease provided for a one-year renewal term at the option of the Company that the company exercised. An amendment to this lease was signed on October 26, 2020 which extended the lease term through October 31, 2021. The company signed a three-year lease agreement for approximately 2.100 square feet of office space located in Concord, NC on July 16, 2020. With the acquisition of Advantech, the Company signed a two-year lease on May 12, 2021 for an office in Scottsdale, AZ. As of June 30, 2021, undiscounted future lease obligations for the office space are $131,660 for period ending June 30, 2021. On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), iCoreConnect Lease Commitments as of 6/30/2021 Less than 1 year 1-3 years 3-5 years Total $ 73,980 $ 57,680 $ 0 $ 131,660 Lease costs for the 6 months ending June 30, 2021 were $72,880 and cash paid for amounts included in the measurement of lease liabilities for the quarter ended June 30, 2020 were 44,000. As of December 31, 2020, the following represents the difference between the remaining undiscounted lease commitments under non-cancelable leases and the lease liabilities: Undiscounted minimum lease commitments $ 131,660 Present value adjustment using incremental borrowing rate (30,926 ) Lease liabilities $ 100,734 |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Jun. 30, 2021 | |
CONCENTRATION OF CREDIT RISK | |
6. CONCENTRATION OF CREDIT RISK | 6. CONCENTRATION OF CREDIT RISK The Company has historically provided financial terms to customers in accordance with what management views as industry norms. Access to the Company’s software products usually requires immediate payment but can extend several months under certain circumstances. 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 condition 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. The company had no significant customer (greater than 10% of total revenue) for 6 months ending June 30, 2021. The Company had 1 significant customer in the six months ending June 30, 2020. The customer’s share of total revenue fell to under 10% from the 6 months ending June 30, 2020 due to organic growth of other customers and the acquisition of TrinIT and Advantech that further diversified the Company’s customer concentration. The company has accounts receivable concentration with three customers that represent 20%, 11%, and 11% of our accounts receivable. Overall, the company grew its accounts receivable approximately ending balance 29% for the 6 months ending June 30, 2021 compared to the 6 months ending June 30, 2020, compared to an over 71% growth in sales for the same period. Day’s sales outstanding was less than 30 days as of June 30, 2021. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT INFORMATION | |
7. SEGMENT INFORMATION | 7. SEGMENT INFORMATION The Company views its operations and manages its business as one operating segment which is the business of providing subscription based software as a service (SaaS) and Managed IT (MSP/MSaaS) services and related non-recurring professional IT and other services. The Company aggregates is operating segments based on similar economic and operating characteristics of its operations. The Company’s SaaS and Managed IT offerings are sold under monthly recurring revenue contracts are included in the Subscription software and services segment. Professional services and other revenue segment consists of non-recurring revenue, including the periodic sale and installation of IT related hardware and custom IT projects. Professional services and other revenue is recognized when services are performed. Revenue Segment Net sales by revenue type were as follows: For the Six Months Ended June 30, 2021 % 2020 % % Change Revenues: Subscription software and services $ 1,464,629 87 % $ 778,245 80 % 88 % Professional services and other 220,750 13 % 199,619 20 % 11 % Total $ 1,685,379 100 % $ 977,863 100 % 72 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
8. SUBSEQUENT EVENTS | 8. SUBSEQUENT EVENTS A Letter of Intent has been signed with Spectrum Technology Solutions, LLC. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidations | The accompanying consolidated financial statements are presented in United States dollars and include the accounts of the Company’s wholly owned subsidiaries, with all intercompany transactions eliminated. They have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States (GAAP). Significant accounting principles followed by the Company and the methods of applying those principles, which materially affect the determination of financial position, results of operations and cash flows are summarized below. |
Fair Value of Financial Instruments | The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. |
Cash and Cash Equivalents | The Company classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at United States banks are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit. |
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 $76,531 and $77,000 as of June 30, 2021 and December 31, 2020, respectively. |
Property, Equipment and Depreciation | Property, equipment, and leasehold improvements are recorded at their historical cost. Depreciation and amortization have been determined using the straight-line method over the estimated useful lives of the assets which are computers and office equipment (3 years) and for office furniture and fixtures (7 years). The cost of repairs and maintenance is charged to operations in the period incurred. |
Software Development Costs and Acquired Software | The Company accounts for software development costs, including costs to develop software products or the software component of products to be sold to external users. In accordance with ASC 985-730, Computer Software Research and Development, research and planning phase costs are expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs are capitalized. We have determined that technological feasibility for our products to be marketed to external users was reached before the release of those products. As a result, the development costs and related acquisition costs after the establishment of technological feasibility were capitalized as incurred. Capitalized costs for software to be sold to external users and software acquired in a business combination are amortized based on current and projected future revenue for each product with an annual minimum equal to the straight-line amortization over three years. |
Impairment of Long-Lived Assets | Long lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount that the carrying amount of the asset exceeds the fair value of the asset. |
Goodwill | Goodwill consists of the purchase price of business acquisitions in excess of the fair value of the net assets acquired. Goodwill is reviewed for impairment annually or when events or circumstances indicate that the carrying value of the reporting unit may exceed its fair value. If the carrying value of a reporting unit exceeds the fair value, an impairment loss will be recognized. The Company did not recognize any impairment charges for the fiscal quarter ended June 30, 2021 and 2020. We are required to test our goodwill for impairment at least annually, or more frequently if conditions indicate that an impairment may have occurred. Goodwill is tested for impairment at the asset level. Our reporting units are acquired companies at which discrete financial information may be available and for which operating results are regularly reviewed by our chief operating decision maker to allocate resources and assess performance. We have the option to qualitatively or quantitatively assess goodwill for impairment and, in 2020, we evaluated our goodwill using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount, goodwill is not impaired. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying amount, we would further evaluate for potential impairment. As of June 30, 2021, we had $1.291 million of Goodwill on our balance sheet associated with four acquisitions, ICD Logic, TrinIT, and Advantech. ICD Logic related goodwill, which accounts for $0.361 million of the total Goodwill balance is the basis for the underlying technology associated with one of the Company’s faster growing and more promising SaaS offerings. TrinIT related Goodwill accounts for $0.130 million of the total Goodwill balance. The TrinIT acquisition was made in 2020 and is performing to expectations. Advantech accounted for $.799 million. During 2021, there were no indications of a triggering event at the 2 reporting units. The annual goodwill impairment analysis resulted in no indications of impairment in 2020 or 2019. We are subject to financial statement risk to the extent that our goodwill become impaired due to decreases in the fair value. A future decline in performance, decreases in projected growth rates or margin assumptions or changes in discount rates could result in a potential impairment, which could have a material adverse impact on our financial position and results of operations. |
Revenue Recognition | We have 5 primary sources of revenue as of June 30, 2021: 1. ePrescription Software 2. IT Managed Services 3. Encrypted and HIPAA Compliant Secure email 4. ICD Coding Software 5. Electronic Health Records (EHR/Practice Management) software 1) ePrescription software services are provided on an annual basis using the software as a service (‘SaaS’) model with revenue recognized ratably over the contract term. 2) Managed IT services – Consist of 3 revenue streams. (i) Monthly recurring “Managed Service Provider (MSP)” and MSaaS revenue, (ii) periodic sale and installation of IT related hardware, and (iii) custom IT projects. The MSP and MSaaS model revenue is recognized monthly on a recurring basis while the revenue relating to IT hardware and custom IT projects is recognized when the services are performed. 3) Encrypted HIPAA compliant secure email services are provided on an annual subscription basis using the software as a service (“SaaS”) model with revenues recognized ratably over the contract term. 4) ICD Coding Software provides the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD), a medical classification list by the World Health Organization (WHO). It contains codes for diseases, signs and symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or diseases. ICD coding services are provided on an annual subscription basis using the software as a service (“SaaS”) model with revenues recognized ratably over the contract term. 5) Revenue from Practice Management software licensing arrangements are based on subscription basis using the software as a service (“SaaS”) model with revenues recognized ratably over the contract term. We recognize revenue for our service in accordance with accounting standard ASC 606. Our customers are acquired through our own salesforce and through the referrals from our many state association marketing partners. We primarily generate revenue from multiple SaaS and MSaaS offerings, which typically include subscriptions to our online software solutions. The Company’s secondary source of revenue is professional services and other revenue related to customer onboarding, IT services and equipment sales that often precede a subscription service offering purchased by the customer. Eighty-four percent of our revenue is subscription based with the remainder being professional services and other IT related revenue. The geographic concentration of our revenue is 100% in North America. Our customers do not have the right to take possession of the online software solution. Revenue from subscriptions, including additional fees for items such as incremental contacts, is recognized ratably over the subscription period beginning on the date the subscription is made available to customers. All subscription contracts are one year. We recognize revenue from on-boarding services and equipment as the services are provided. Amounts billed that have not yet met the applicable revenue recognition criteria are recorded as deferred revenue. |
Accounting for Derivative Instruments | The Company accounts for derivative instruments in accordance with ASC 815, which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible debt and preferred stock instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. |
Income Taxes | The Company follows the asset and liability approach to accounting for income taxes. Under this method, deferred tax assets and liabilities are measured based on differences between the financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that are expected to be in effect when differences are expected to reverse. Valuation allowances are established when it is necessary to reduce deferred income tax assets to the amount, if any, expected to be realized in future years. ASC 740, Accounting for Income taxes (“ASC 740”), requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent we believe a portion more likely than not will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative loss experience and expectations of future taxable income by taxing jurisdictions, the carry forwarding periods available to us for tax reporting purposes and other relevant factors. The Company has not recognized a liability for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits or penalties has not been provided since there has been no unrecognized benefit or penalty. If there were an unrecognized tax benefit or penalty, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company files U.S. Federal income tax returns and various returns in state jurisdictions. The Company’s open tax years subject to examination by the Internal Revenue Service and the state Departments of Revenue generally remain open for three years from the date of filing. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and to the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
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 other Common Stock equivalents, including stock options, shares issuable on exercise of warrants, convertible preferred stock and convertible notes in the weighted average number of common shares 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. |
Stock-Based Compensation | The Company uses the fair value method to account for the granting of options to purchase shares of its stock whereby all awards are recorded at fair value on the date of the grant. Share based awards with a performance condition are measured based on the probable outcome of that performance condition during the requisite service period. Such an award with a performance condition is accrued if it is probable that a performance condition will be achieved. Compensation costs for stock-based payments that do not include performance conditions are recognized on a straight-line basis. The fair value of all share purchase options is expensed over their requisite service period with a corresponding increase to additional capital surplus. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in additional capital surplus, is recorded as an increase to share capital. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option pricing model that uses the assumptions noted in the table below. The Company estimates the fair value of its common stock using the closing stock price of its common stock on the option grant date. The Company estimates the volatility of its common stock at the date of grant based on its historical stock prices. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The fair value of shares of restricted stock issued are determined by the Company based on the estimated fair value of the Company’s common stock. |
Recently Issued Accounting Pronouncements | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), The Company does not believe that any other issued, but not yet effective accounting standards, if currently adopted, will have a material effect on the Company’s consolidated financial position, results of operations and cash flows. |
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 six-month period ended June 30, 2021, the Company generated an operating loss of $1,164,255. In addition, the Company has an accumulated deficit, total stockholders’ equity and net working capital deficit of $78,995,337, $2,300,261 and $2,106,574, respectively, on June 30, 2021. The Company’s activities were primarily financed through private placements of equity securities. The Company intends to raise additional capital through the issuance of debt and/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. In light of these matters, there is substantial doubt that the Company will be able to continue as a going concern. 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. |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
COMMON STOCK (Tables) | |
Summary of stock option activity | 2021 Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance Outstanding - January 1, 2021 1,405,000 $ 0.24 7.7 $ - Granted - $ - Exercised - $ - Forfeited - $ - Balance Outstanding - June 30, 2021 1,405,000 $ 0.24 7.4 $ - Exercisable - June 31, 2021 1,405,000 $ 0.24 7.4 $ - 2021 Nonvested Options Number of Options Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested - January 1, 2021 - $ - 0.0 Granted - $ - Vested - $ - Forfeited/expired - Nonvested - June 30, 2021 - $ - 0.00 |
Schedule of share issuable warrants | Type Issue Date Shares Price Expiration Investors 4/19/2021 1,300,000 $ 0.20 4/19/2026 Investors 4/19/2021 1,300,000 $ 0.25 4/19/2026 Investors 4/22/2021 1,300,000 $ 0.20 4/22/2026 Investors 4/22/2021 1,300,000 $ 0.25 4/22/2026 Investors 4/30/2021 650,000 $ 0.20 4/30/2026 Investors 4/30/2021 650,000 $ 0.25 4/30/2026 Investors 5/4/2021 650,000 $ 0.20 5/4/2026 Investors 5/4/2021 650,000 $ 0.25 5/4/2026 Investors 5/19/2021 650,000 $ 0.20 5/19/2026 Investors 5/19/2021 650,000 $ 0.25 5/16/2026 Total 9,100,000 |
SOFTWARE DEVELOPMENT COSTS (Tab
SOFTWARE DEVELOPMENT COSTS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SOFTWARE DEVELOPMENT COSTS (Tables) | |
Summary of capitalization and amortization of software development costs | June 30, December 31, 2021 2020 Development costs $ 2,587,889 $ 2,479,137 Acquired technology 1,527,186 1,527,186 Less accumulated amortization (2,898,798 ) (2,483,622 ) $ 1,216,278 $ 1,522,701 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of lease commitments | iCoreConnect Lease Commitments as of 6/30/2021 Less than 1 year 1-3 years 3-5 years Total $ 73,980 $ 57,680 $ 0 $ 131,660 |
Schedule of components of lease investments | Undiscounted minimum lease commitments $ 131,660 Present value adjustment using incremental borrowing rate (30,926 ) Lease liabilities $ 100,734 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT INFORMATION (Tables) | |
Schedule of net sales by revenue | For the Six Months Ended June 30, 2021 % 2020 % % Change Revenues: Subscription software and services $ 1,464,629 87 % $ 778,245 80 % 88 % Professional services and other 220,750 13 % 199,619 20 % 11 % Total $ 1,685,379 100 % $ 977,863 100 % 72 % |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Allowance for doubtful accounts | $ 76,531 | $ 77,000 | ||||
Goodwill | 1,291,000 | |||||
Accumulated deficit | (78,946,052) | (77,831,081) | ||||
Total stockholders' Deficit | 2,349,546 | $ 576,178 | $ (628,940) | $ 205,000 | $ 553,000 | $ 465,000 |
Working capital deficit | (2,106,574) | |||||
FDIC insured limit | 250,000 | |||||
Operating loss | $ 1,164,255 | |||||
Revenue , description | The Company’s secondary source of revenue is professional services and other revenue related to customer onboarding, IT services and equipment sales that often precede a subscription service offering purchased by the customer. Eighty-four percent of our revenue is subscription based with the remainder being professional services and other IT related revenue. The geographic concentration of our revenue is 100% in North America. | |||||
Furniture and Fixtures [Member] | ||||||
Estimated useful life | 7 years | |||||
Computers and office equipment [Member] | ||||||
Estimated useful life | 3 years | |||||
Advantech [Member] | ||||||
Goodwill | $ 799,000 | |||||
TrinIT [Member] | ||||||
Goodwill | 130,000 | |||||
ICD Logic [Member] | ||||||
Goodwill | $ 361,000 |
COMMON STOCK (Details)
COMMON STOCK (Details) | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Options Outstanding | |
Number of Options/Warrants Outstanding, Beginning | shares | 1,405,000 |
Number of Options/Warrants Outstanding, Ending | shares | 1,405,000 |
Number of Options Outstanding, Exercisable Ending | shares | 1,405,000 |
Weighted Average Exercise Price, Beginning | $ / shares | $ 0.24 |
Weighted Average Exercise Price, Exercisable | $ / shares | 0.24 |
Weighted Average Exercise Price, Ending | $ / shares | $ 0.24 |
Weighted Average Remaining Contractual Term in Years, Beginning | 7 years 8 months 12 days |
Weighted Average Remaining Contractual Term in Years, Ending | 7 years 4 months 24 days |
Weighted Average Remaining Contractual Term in Years, Exercisable Ending | 7 years 4 months 24 days |
Aggregate Intrinsic Value, Beginning | $ | $ 0 |
Aggregate Intrinsic Value, Ending | $ | $ 0 |
Nonvested Options | |
Number of Options Nonvested, Beginning | shares | 0 |
Number of Options Nonvested, Vested | shares | 0 |
Number of Options Nonvested, Ending | shares | 0 |
Weighted Average grant date Fair Value Nonvested, Beginning | $ / shares | $ 0 |
Weighted Average grant date Fair Value Nonvested, Vested | $ / shares | 0 |
Weighted Average grant date Fair Value Nonvested, Ending | $ / shares | $ 0 |
Weighted Average Remaining Years to vest Nonvested, Begining | 0 years |
Weighted Average Remaining Years to vest Nonvested, Ending | 0 years |
COMMON STOCK (Details 1)
COMMON STOCK (Details 1) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Shares | 9,100,000 |
Investor One [Member] | |
Shares | 1,300,000 |
Issue Date | 4/19/2021 |
Price | $ / shares | $ 0.20 |
Expiration | 4/19/2026 |
Investor Two [Member] | |
Shares | 1,300,000 |
Issue Date | 4/19/2021 |
Price | $ / shares | $ 0.25 |
Expiration | 4/19/2026 |
Investor Three [Member] | |
Shares | 1,300,000 |
Issue Date | 4/22/2021 |
Price | $ / shares | $ 0.20 |
Expiration | 4/22/2026 |
Investor Four [Member] | |
Shares | 1,300,000 |
Issue Date | 4/22/2021 |
Price | $ / shares | $ 0.25 |
Expiration | 4/22/2026 |
Investor Five [Member] | |
Shares | 650,000 |
Issue Date | 4/30/2021 |
Price | $ / shares | $ 0.20 |
Expiration | 4/30/2026 |
Investor Six [Member] | |
Shares | 650,000 |
Issue Date | 4/30/2021 |
Price | $ / shares | $ 0.25 |
Expiration | 4/30/2026 |
Investor Nine [Member] | |
Shares | 650,000 |
Issue Date | 5/19/2021 |
Price | $ / shares | $ 0.20 |
Expiration | 5/19/2026 |
Investor Ten [Member] | |
Shares | 650,000 |
Issue Date | 5/19/2021 |
Price | $ / shares | $ 0.25 |
Expiration | 5/16/2026 |
Investor Seven [Member] | |
Shares | 650,000 |
Issue Date | 5/4/2021 |
Price | $ / shares | $ 0.20 |
Expiration | 5/4/2026 |
Investor Eight [Member] | |
Shares | 650,000 |
Issue Date | 5/4/2021 |
Price | $ / shares | $ 0.25 |
Expiration | 5/4/2026 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jan. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | |
Shares | 9,100,000 | |||
Purchase Agreement [Member] | Investor [Member] | ||||
Line of credit descriptions | The Purchase Agreement is an equity line of credit and the Investor committed to purchase, subject to certain restrictions and conditions, up to $5.0 million worth (the “Commitment”) of the Company’s common stock over a period of 24 months | |||
Common Stock Warrants [Member] | ||||
Exercise prices description | exercise prices of $0.20 and $0.25 | |||
Shares | 9,100,000 | |||
Common stock warrants term | 5 years | |||
Executive And Employee [Member] | ||||
Common stock shares issued for cash, shares | 38,500,000 | 38,500,000 | ||
Common stock shares issued for cash, value | $ 2,920,000 | $ 2,920,000 | ||
Common stock shares issued for services, shares | 7,900,000 | |||
Common stock shares issued for services, value | $ 481,923 |
SOFTWARE DEVELOPMENT COSTS (Det
SOFTWARE DEVELOPMENT COSTS (Details) - Software Development [Member] - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Development costs | $ 2,587,889 | $ 2,479,137 |
Acquired technology | 1,527,186 | 1,527,186 |
Less Accumulated amortization | (2,898,798) | (2,483,622) |
Total Software development costs | $ 1,216,278 | $ 1,522,701 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2021USD ($) |
Lease Commitments | $ 131,660 |
3-5 years [Member] | |
Lease Commitments | 0 |
Less than 1 year [Member] | |
Lease Commitments | 73,980 |
1-3 years [Member] | |
Lease Commitments | $ 57,680 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) - Lease [Member] | Jun. 30, 2021USD ($) |
Undiscounted minimum lease commitments | $ 131,660 |
Present value adjustment using incremental borrowing rate | (30,926) |
Lease liabilities | $ 100,734 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Lease [Member] - USD ($) | 1 Months Ended | 6 Months Ended | ||
Jul. 16, 2020 | Nov. 15, 2017 | Jun. 30, 2021 | Jun. 30, 2020 | |
Payments of lease liabilities | $ 44,000 | |||
Lease agreement description | The company signed a three-year lease agreement for approximately 2.100 square feet of office space located in Concord, | the Company signed a three-year lease agreement for approximately 4,100 square feet of office space located in Winter Garden | ||
Lease costs | $ 72,880 | |||
Undiscounted minimum lease commitments | $ 131,660 | |||
January 1, 2019 [Member] | ||||
Weighted-average incremental borrowing rate | 11.90% | |||
Weighted-average remaining lease term | 1 year 7 months 6 days |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Total revenue percentage | 10.00% | 10.00% |
Description of concentration of credit risk | Overall, the company grew its accounts receivable approximately ending balance 29% for the 6 months ending June 30, 2021 compared to the 6 months ending June 30, 2020, compared to an over 71% growth in sales for the same period. Day’s sales outstanding was less than 30 days as of June 30, 2021 | |
Customers [Member] | ||
Percentage of accounts receivable | 20.00% | |
Customers Two [Member] | ||
Percentage of accounts receivable | 11.00% | |
Customers Three [Member] | ||
Percentage of accounts receivable | 11.00% |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Total [Member] | ||
Total revenue | $ 1,685,379 | $ 977,863 |
Revenue percentages | 100.00% | 100.00% |
Revenue change percentage | 72.00% | |
Revenue Segment [Member] | ||
Revenues: | ||
Subscription software and services | $ 1,464,629 | $ 778,245 |
Subscription software and services, percentage | 87.00% | 80.00% |
Subscription software and services, change percentages | 88.00% | |
Professional services and other | $ 220,750 | $ 199,619 |
Professional services and other, percentage | 13.00% | 20.00% |
Professional services and other, change percentages | 11.00% |