Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined balance sheet as of March 31, 2021 and the unaudited pro forma condensed combined statements of income for the three months ended March 31, 2021 and for the year ended December 31, 2020 combine the financial statements of iCoreConnect Inc. (“iCoreConnect”), and Heyns Unlimited, LLC (“Heyns”) giving effect to the transaction described in the Agreement, as if they had occurred on January 1, 2020 in respect of the unaudited pro forma condensed combined statements of operations and on March 31, 2021 in respect of the unaudited pro forma condensed combined balance sheet.
The unaudited pro forma condensed combined financial information should be read in conjunction with:
·
iCoreConnect’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2020, as contained in the Form 10-K filed on April 15, 2021 with the United States Securities and Exchange Commission (the “SEC”).
·
iCoreConnect’s unaudited condensed consolidated financial statements and accompanying notes as of and for the three months ended March 31, 2021, as contained in its Quarterly Report on Form 10-Q filed on May 17, 2021 with the SEC.
·
Heyns’s audited financial statements as of and for the years ended December 31, 2020 and 2019, contained elsewhere herein.
·
Heyns’s unaudited condensed financial statements as of March 31, 2021 and for the three months ended March 31, 2021, contained elsewhere herein.
·
the other information contained in or incorporated by reference into this filing.
The final purchase consideration and the allocation of the purchase consideration may materially differ from that reflected in the unaudited pro forma condensed combined financial information after final valuation procedures are performed and amounts are finalized following the completion of the acquisition.
The unaudited pro forma adjustments give effect to events that are directly attributable to the transaction and are based on available data and certain assumptions that management believes are factually supportable. In addition, with respect to the unaudited condensed combined statements of operations, the unaudited pro forma adjustments are expected to have a continuing impact on the combined results.
The unaudited pro forma condensed combined financial information is presented for informational purposes only and to aid you in your analysis of the financial aspects of the acquisition. The unaudited pro forma condensed combined financial information described above has been derived from the historical financial statements of iCoreConnect and Heyns and the related notes included elsewhere in this Form 8-K. The unaudited pro forma condensed combined financial information is based on iCoreConnect’s accounting policies. Further review may identify additional differences between the accounting policies of iCoreConnect and Heyns. The unaudited pro forma adjustments and the pro forma condensed combined financial information do not reflect the impact of synergies or post-transaction management actions and are not necessarily indicative of the financial position or results of operations that may have actually occurred had the transaction taken place on the dates noted, or of iCoreConnect’s future financial position or operating results.
iCoreConnect Inc.
Unaudited Pro Forma Condensed Combined Statements of Operations
For the Three Months Ended March 31, 2021
iCoreConnect Inc.
Heyns
Unlimited, LLC
Adjustment(s)
Consolidated
Revenue
$
704,001
$
292,844
$
-
$
996,845
Cost of sales
240,033
$
57,626
-
297,659
Gross profit
463,968
235,218
-
699,186
Expenses
Selling, general and administrative
856,388
93,522
-
949,910
Depreciation and amortization
252,697
-
-
252,697
Total operating expenses
1,109,085
93,522
-
1,202,607
Income (Loss) from operations
(645,117
)
141,696
-
(503,421
)
Other income (expense)
Interest expense
(167,797
)
-
(54,000
)(D)
(221,797
)
Other income
-
511
-
511
Gain on cancellation of liabilities
-
-
-
-
Total other income (expense)
(167,797
)
511
(54,000
)
(221,286
)
Net income (loss)
$
(812,914
)
$
142,208
$
(54,000
)
$
(724,706
)
Net loss per share available to common stockholders, basic and diluted
$
(0.01
)
-
-
$
(0.01
)
Weighted average number of shares, basic and diluted
115,776,822
-
5,000,000
120,776,822
2
iCoreConnect Inc.
Unaudited Pro Forma Condensed Combined Statements of Operations
For the Year Ended December 31, 2020
iCoreConnect Inc.
Heyns Unlimited, LLC
Adjustment(s)
Consolidated
Revenue
$
2,123,587
$
1,409,560
$
-
$
3,533,147
Cost of sales
1,008,843
$
220,257
-
1,229,100
Gross profit
1,114,744
1,189,303
-
2,304,047
Expenses
Selling, general and administrative
3,447,014
344,662
-
3,791,676
Depreciation and amortization
906,060
7,124
-
913,184
Total operating expenses
4,353,074
351,785
-
4,704,859
Income (Loss) from operations
(3,238,330
)
837,518
-
(2,400,812
)
Other income (expense)
Interest expense
(238,820
)
-
(216,000
)(D)
(454,820
)
Other income (expense)
(50,733
)
3,187
-
(47,546
)
Gain on cancellation of liabilities
36,642
33,905
-
70,547
Total other income (expense)
(252,911
)
37,092
(2,16,000
)
(431,819
)
Net income (loss)
$
(3,491,241
)
$
874,610
$
(2,16,000
)
$
(2,832,631
)
Net loss per share available to common stockholders, basic and diluted
$
(0.05
)
-
-
$
(0.03
)
Weighted average number of shares, basic and diluted
76,459,645
-
5,000,000
81,459,645
3
iCoreConnect Inc.
Unaudited Pro Forma Condensed Combined Balance Sheets
March 31, 2021
iCoreConnect Inc.
Heyns Unlimited LLC
Adjustment(s)
Consolidated
ASSETS
Cash and cash equivalents
$
194,174
$
63,348
$
(36,404
)(A)
$
221,118
Accounts receivable, net
176,958
$
43,135
(43,135
)(A)
176,958
Loans receivable
-
-
-
-
Prepaid expenses and other current assets
48,572
-
-
48,572
Total current assets
419,704
106,483
(79,539
)
446,648
Property and equipment, net
1,721
60,338
(50,463
)(A)
11,596
Right of use lease asset - operating
150,477
-
-
150,477
Software development costs, net
711,722
-
-
711,722
Acquired technology, net
635,862
-
-
635,862
Customer relationships, net
341,310
-
-
341,310
Goodwill
491,376
-
2,274,366
(C)
2,765,742
Total long-term assets
2,332,468
60,338
2,223,903
4,616,709
TOTAL ASSETS
$
2,752,172
$
166,821
$
2,144,364
$
5,063,357
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$
985,317
$
16,974
$
(5,789
)(A)
$
996,502
Operating lease liability, current portion
77,461
-
-
77,461
Notes payable
965,366
-
-
(A)
965,366
Deferred revenue, current portion
13,239
-
-
13,239
Total current liabilities
2,041,383
16,974
(5,789
)
2,052,568
Operating lease liability, net of current portion
62,660
-
-
62,660
Deferred revenue, net of current portion
71,951
-
-
71,951
Notes payable, net of current portion
-
-
1,800,000
(B)
1,800,000
Total long-term liabilities
134,611
-
1,800,000
1,934,611
TOTAL LIABILITIES
2,175,994
16,974
1,794,211
3,987,179
STOCKHOLDERS' EQUITY
Common Stock par value $0.001; 600,000,000 shares authorized; Issued and Outstanding: 124,503,233 as of March 31, 2021 and 90,081,336 as of December 31, 2020
124,503
-
-
124,503
Additional paid-in-capital
79,095,670
-
474,366
(B)
79,570,036
Accumulated equity (deficit)
(78,643,995
)
149,847
(124,213
)(A)
(78,618,361
)
TOTAL STOCKHOLDERS' EQUITY
576,178
149,847
350,153
1,076,178
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
2,752,172
$
166,821
$
2,144,364
$
5,063,357
4
iCoreConnect Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1. Basis of Presentation
The unaudited pro forma condensed combined financial information set forth herein is based upon the consolidated financial statements of iCoreConnect Inc. and Heyns Unlimited, LLC. The unaudited pro forma condensed combined financial information is presented as if the transaction had been completed on January 1, 2020 with respect to the unaudited pro forma condensed combined statements of operations for each of the three months ended March 31, 2021 and for the year ended December 31, 2020 and on March 31, 2021 in respect of the unaudited pro forma condensed combined balance sheet.
The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations had the transaction occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that the combined company will experience after the completion of the transactions.
We have accounted for the acquisition in this unaudited pro forma condensed combined financial information using the acquisition method of accounting, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”). In accordance with ASC 805, we use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired.
Pro forma adjustments reflected in the unaudited pro forma condensed combined balance sheet are based on items that are factually supportable and directly attributable to the transaction. Pro forma adjustments reflected in the pro forma condensed combined statements of operations are based on items that are factually supportable, directly attributable to the transaction and expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information does not reflect the cost of any integration activities or benefits from the transaction, including potential synergies that may be generated in future periods.
Note 2. Description of the Transaction
On April 23, 2021, iCoreConnect Inc., a Nevada corporation (“Buyer”), acquired substantially all of the assets and business of Heyns Unlimited LLC, an Arizona limited liability company, doing business as Advantech (“Seller”), in exchange for (i) 5,000,000 shares of restricted Common Stock of Buyer, (ii) $1,800,000 in cash and (iii) the assumption of certain liabilities and obligations of Seller.
Note 3. Purchase Price Allocation
The fair value of the consideration transferred was valued as of the date of the acquisition as follows. The source of the cash that funded the purchase was debt taken out by iCoreConnect Inc. prior to the acquisition.
Heyns Unlimited, LLC Purchase Consideration
Cash
$
1,800,000
Stockholders Equity
500,000
Total Purchase Consideration
$
2,300,000
5
The preliminary allocation for the consideration recorded for the acquisition is as follows if the acquisition had taken place as of March 31, 2021:
Current Assets
$
26,944
Property and Equipment
9,875
Goodwill
2,274,366
Accounts Payable and accrued expenses
(11,185
)
Total
$
2,300,000
The purchase price allocation is preliminary. The purchase price allocation will continue to be preliminary until a third-party valuation is finalized and the fair value and useful life of the assets acquired is determined. The amounts from the final valuation may significantly differ from the preliminary allocation.
Note 4. Pro Forma Adjustments
The following pro forma adjustments give effect to the transaction.
Unaudited Pro Forma Condensed Combined Balance Sheet – As of March 31, 2021
Note A
To remove Heyns assets, liabilities, and equity not purchased pursuant to the asset purchase agreement.
Note B
To record purchase consideration and transaction financing. The purchase consideration included cash and common stock in iCoreConnect. The transaction financing consisted of promissory notes.
Note C
To record assets acquired and liabilities assumed from Heyns at preliminary estimated fair value. The Company has not completed its purchase price allocation and the amounts noted are preliminary.
Unaudited Pro Forma Condensed Combined Statement of Operations – For the Three Months Ended March 31, 2021
Note D
To record interest on promissory notes.
Unaudited Pro Forma Condensed Combined Statement of Operations – For the Year Ended December 31, 2020
Note D
To record interest on promissory notes.
6
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