EXHIBIT 99.4
iCoreConnect Inc.
Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined balance sheet as of June 30, 2021 and the unaudited pro forma condensed combined statements of income for the six months ended June 30, 2021 and for the year ended December 31, 2020 combine the financial statements of iCoreConnect Inc. (“iCoreConnect”), and Spectrum Technology Solutions, LLC (“STS”) giving effect to the transaction described in the Agreement, as if they had occurred on January 1, 2020 in respect of the unaudited pro forma condensed combined statements of operations and on June 30, 2021 in respect of the unaudited pro forma condensed combined balance sheet.
The unaudited pro forma condensed combined financial information should be read in conjunction with:
| · | iCoreConnect’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2020, as contained in the Form 10-K filed on April 15, 2021 with the United States Securities and Exchange Commission (the “SEC”). |
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| · | iCoreConnect’s unaudited condensed consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2021, as contained in its Quarterly Report on Form 10-Q filed on August 23, 2021 with the SEC. |
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| · | STS’s audited financial statements as of and for the years ended December 31, 2020 and 2019, contained elsewhere herein. |
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| · | STS’s unaudited condensed financial statements as of June 30, 2021 and for the six months ended June 30, 2021, contained elsewhere herein. |
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| · | the other information contained in or incorporated by reference into this filing. |
The final purchase consideration and the allocation of the purchase consideration may materially differ from that reflected in the unaudited pro forma condensed combined financial information after final valuation procedures are performed and amounts are finalized following the completion of the acquisition.
The unaudited pro forma adjustments give effect to events that are directly attributable to the transaction and are based on available data and certain assumptions that management believes are factually supportable. In addition, with respect to the unaudited condensed combined statements of operations, the unaudited pro forma adjustments are expected to have a continuing impact on the combined results.
The unaudited pro forma condensed combined financial information is presented for informational purposes only and to aid you in your analysis of the financial aspects of the acquisition. The unaudited pro forma condensed combined financial information described above has been derived from the historical financial statements of iCoreConnect and STS and the related notes included elsewhere in this Form 8-K. The unaudited pro forma condensed combined financial information is based on iCoreConnect’s accounting policies. Further review may identify additional differences between the accounting policies of iCoreConnect and STS. The unaudited pro forma adjustments and the pro forma condensed combined financial information do not reflect the impact of synergies or post-transaction management actions and are not necessarily indicative of the financial position or results of operations that may have actually occurred had the transaction taken place on the dates noted, or of iCoreConnect’s future financial position or operating results.
iCoreConnect Inc.
Unaudited Pro Forma Condensed Combined Statements of Operations
For the Six Months Ended June 30, 2021
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| iCoreConnect Inc. |
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| Spectrum Technology Solutions LLC |
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| Adjustment(s) |
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| Consolidated |
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| Revenue |
| $ | 1,685,379 |
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| $ | 1,036,237 |
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| $ | - |
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| $ | 2,721,616 |
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| Cost of sales |
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| 507,761 |
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| 647,446 |
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| - |
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| 1,155,207 |
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| Gross profit |
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| 1,177,618 |
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| 388,791 |
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| - |
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| 1,566,409 |
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| Expenses |
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Selling, general and administrative |
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| 1,860,258 |
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| 322,275 |
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| - |
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| 2,182,533 |
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Depreciation and amortization |
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| 503,412 |
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| - |
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| - |
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| 503,412 |
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Total operating expenses |
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| 2,363,670 |
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| 322,275 |
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| - |
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| 2,685,945 |
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| Income (Loss) from operations |
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| (1,186,052 | ) |
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| 66,516 |
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| - |
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| (1,119,536 | ) |
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| Other income (expense) |
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Interest expense |
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| (260,323 | ) |
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| (336 | ) |
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| (112,500 | )(D) |
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| (373,159 | ) |
Other income |
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| - |
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| - |
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| - |
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| - |
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Gain on cancellation of liabilities |
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| 331,404 |
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| 183,900 |
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| - |
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| 515,304 |
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| Total other income (expense) |
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| 71,081 |
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| 183,564 |
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| (112,500 | ) |
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| 142,145 |
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| Net income (loss) |
| $ | (1,114,971 | ) |
| $ | 250,080 |
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| $ | (112,500 | ) |
| $ | (977,391 | ) |
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| Net loss per share available to common stockholders, basic and diluted |
| $ | (0.01 | ) |
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| - |
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| - |
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| $ | (0.01 | ) |
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| Weighted average number of shares, basic and diluted |
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| 128,456,113 |
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| - |
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| 4,046,617 |
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| 132,502,730 |
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| 2 |
iCoreConnect Inc.
Unaudited Pro Forma Condensed Combined Statements of Operations
For the Year Ended December 31, 2020
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| iCoreConnect Inc. |
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| Spectrum Technology Solutions LLC |
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| Adjustment(s) |
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| Consolidated |
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| Revenue |
| $ | 2,123,587 |
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| $ | 2,002,757 |
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| $ | - |
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| $ | 4,126,344 |
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| Cost of sales |
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| 1,008,843 |
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| 1,155,143 |
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| - |
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| 2,163,986 |
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| Gross profit |
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| 1,114,744 |
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| 847,614 |
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| - |
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| 1,962,358 |
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| Expenses |
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Selling, general and administrative |
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| 3,447,014 |
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| 723,269 |
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| - |
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| 4,170,283 |
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Depreciation and amortization |
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| 906,060 |
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| 36,817 |
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| - |
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| 942,877 |
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Total operating expenses |
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| 4,353,074 |
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| 760,086 |
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| - |
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| 5,113,160 |
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| Income (Loss) from operations |
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| (3,238,330 | ) |
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| 87,528 |
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| - |
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| (3,150,802 | ) |
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| Other income (expense) |
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Interest expense |
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| (238,820 | ) |
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| (6,130 | ) |
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| (225,000 | )(D) |
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| (469,950 | ) |
Other income (expense) |
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| (50,733 | ) |
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| - |
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| - |
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| (50,733 | ) |
Gain on cancellation of liabilities |
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| 36,642 |
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| - |
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| - |
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| 36,642 |
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| Total other income (expense) |
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| (252,911 | ) |
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| (6,130 | ) |
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| (225,000 | ) |
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| (484,041 | ) |
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| Net income (loss) |
| $ | (3,491,241 | ) |
| $ | 81,398 |
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| $ | (225,000 | ) |
| $ | (3,634,843 | ) |
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| Net loss per share available to common stockholders, basic and diluted |
| $ | (0.05 | ) |
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| - |
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| - |
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| $ | (0.05 | ) |
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| Weighted average number of shares, basic and diluted |
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| 76,459,645 |
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| - |
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| 4,046,617 |
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| 80,506,262 |
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| 3 |
iCoreConnect Inc.
Unaudited Pro Forma Condensed Combined Balance Sheets
June 30, 2021
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| iCoreConnect |
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| Spectrum Technology Solutions LLC |
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| Adjustment(s) |
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| Consolidated |
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| ASSETS |
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Cash and cash equivalents |
| $ | 846,039 |
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| $ | 118,366 |
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| $ | 31,634 | (A) |
| $ | 996,039 |
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Accounts receivable, net |
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| 233,915 |
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| 100,765 |
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| (65,542 | )(A) |
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| 269,138 |
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Loans receivable |
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| - |
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| 352,200 |
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| (352,200 | )(A) |
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| - |
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Inventory |
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| - |
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| 13,789 |
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| (13,789 | )(A) |
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| - |
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Prepaid expenses and other current assets |
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| 132,019 |
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| 135,535 |
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| (135,535 | )(A) |
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| 132,019 |
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Total current assets |
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| 1,211,973 |
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| 720,655 |
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| (535,432 | ) |
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| 1,397,196 |
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Property and equipment, net |
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| 15,090 |
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| 58,628 |
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| (26,628 | )(A) |
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| 47,090 |
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Right of use lease asset - operating |
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| 118,182 |
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| - |
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| - |
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| 118,182 |
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Software development costs, net |
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| 698,349 |
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| - |
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| - |
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| 698,349 |
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Acquired technology, net |
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| 517,929 |
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| 23,940 |
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| (23,940 | )(A) |
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| 517,929 |
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Customer relationships, net |
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| 1,855,664 |
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| - |
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| - |
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| 1,855,664 |
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Goodwill |
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| 1,291,109 |
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| - |
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| 1,782,777 | (C) |
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| 3,073,886 |
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Total long-term assets |
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| 4,496,323 |
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| 82,568 |
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| 1,732,209 |
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| 6,311,100 |
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| TOTAL ASSETS |
| $ | 5,708,296 |
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| $ | 803,223 |
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| $ | 1,196,777 |
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| $ | 7,708,296 |
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| LIABILITIES AND STOCKHOLDERS' EQUITY |
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Accounts payable and accrued expenses |
| $ | 833,416 |
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| $ | 82,807 |
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| $ | (82,807 | )(A) |
| $ | 833,416 |
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Operating lease liability, current portion |
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| 47,035 |
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| - |
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| - |
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| 47,035 |
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Notes payable |
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| 2,372,271 |
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| 356,568 |
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| (356,568 | )(A) |
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| 2,372,271 |
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Deferred revenue, current portion |
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| 31,586 |
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| - |
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| - |
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| 31,586 |
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Total current liabilities |
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| 3,284,308 |
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| 439,375 |
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| (439,375 | ) |
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| 3,284,308 |
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Operating lease liability, net of current portion |
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| 53,699 |
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| - |
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| - |
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| 53,699 |
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Deferred revenue, net of current portion |
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| 20,743 |
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| - |
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| - |
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| 20,743 |
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Notes payable, net of current portion |
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| - |
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| - |
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| 1,500,000 | (B) |
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| 1,500,000 |
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Total long-term liabilities |
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| 74,442 |
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| - |
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| 1,500,000 |
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| 1,574,442 |
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| TOTAL LIABILITIES |
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| 3,358,750 |
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| 439,375 |
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| 1,060,625 |
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| 4,858,750 |
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| STOCKHOLDERS' EQUITY |
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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 |
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| 151,613 |
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| - |
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| - |
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| 151,613 |
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Additional paid-in-capital |
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| 81,143,985 |
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| - |
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| 282,777 | (B) |
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| 81,426,762 |
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Accumulated equity (deficit) |
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| (78,946,052 | ) |
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| 363,848 |
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| (146,625 | )(A) |
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| (78,728,829 | ) |
| TOTAL STOCKHOLDERS' EQUITY |
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| 2,349,546 |
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| 363,848 |
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| 136,152 |
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| 2,849,546 |
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| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 5,708,296 |
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| $ | 803,223 |
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| $ | 1,196,777 |
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| $ | 7,708,296 |
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| 4 |
iCoreConnect Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1. Basis of Presentation
The unaudited pro forma condensed combined financial information set forth herein is based upon the consolidated financial statements of iCoreConnect Inc. and Spectrum Technology Solutions, LLC. The unaudited pro forma condensed combined financial information is presented as if the transaction had been completed on January 1, 2020 with respect to the unaudited pro forma condensed combined statements of operations for each of the six months ended June 30, 2021 and for the year ended December 31, 2020 and on June 30, 2021 in respect of the unaudited pro forma condensed combined balance sheet.
The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations had the transaction occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that the combined company will experience after the completion of the transactions.
We have accounted for the acquisition in this unaudited pro forma condensed combined financial information using the acquisition method of accounting, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”). In accordance with ASC 805, we use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired.
Pro forma adjustments reflected in the unaudited pro forma condensed combined balance sheet are based on items that are factually supportable and directly attributable to the transaction. Pro forma adjustments reflected in the pro forma condensed combined statements of operations are based on items that are factually supportable, directly attributable to the transaction and expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information does not reflect the cost of any integration activities or benefits from the transaction, including potential synergies that may be generated in future periods.
Note 2. Description of the Transaction
On September 1, 2021, iCoreConnect Inc. (the “Company”) consummated the Asset Purchase Agreement with Spectrum Technology Solutions, LLC. The aggregate purchase price of $2,000,000 is comprised of cash and stock in iCoreConnect, Inc.
Note 3. Purchase Price Allocation
The fair value of the consideration transferred was valued as of the date of the acquisition as follows. The source of the cash that funded the purchase was debt taken out by iCoreConnect Inc. prior to the acquisition.
| STS Purchase Consideration | ||||
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Cash |
| $ | 1,500,000 |
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Stockholders Equity |
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| 500,000 |
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Total Purchase Consideration |
| $ | 2,000,000 |
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| 5 |
The preliminary allocation for the consideration recorded for the acquisition is as follows if the acquisition had taken place as of June 30, 2021:
| Current Assets |
| $ | 185,223 |
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| Property and Equipment |
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| 32,000 |
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Goodwill |
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| 1,782,777 |
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Total |
| $ | 2,000,000 |
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The purchase price allocation is preliminary. The purchase price allocation will continue to be preliminary until a third-party valuation is finalized and the fair value and useful life of the assets acquired is determined. The amounts from the final valuation may significantly differ from the preliminary allocation.
Note 4. Pro Forma Adjustments
The following pro forma adjustments give effect to the transaction.
Unaudited Pro Forma Condensed Combined Balance Sheet – As of June 30, 2021
Note A | To remove STS assets, liabilities, and equity not purchased pursuant to the asset purchase agreement. |
Note B | To record purchase consideration and transaction financing. The purchase consideration included cash and common stock in iCoreConnect. The transaction financing consisted of promissory notes. |
Note C | To record assets acquired and liabilities assumed from STS at preliminary estimated fair value. The Company has not completed its purchase price allocation and the amounts noted are preliminary. |
Unaudited Pro Forma Condensed Combined Statement of Operations – For the Six Months Ended June 30, 2021
Note D | To record interest on promissory notes. |
Unaudited Pro Forma Condensed Combined Statement of Operations – For the Year Ended December 31, 2020
Note D | To record interest on promissory notes. |
| 6 |