EXHIBIT 99.2
iCoreConnect Inc. | ||||||||||||||||||
Unaudited Pro Forma Condensed Combined Statement of Operations | ||||||||||||||||||
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(in thousands, except share and per share data) | ||||||||||||||||||
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| unaudited |
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| Six Months Ended June 30, 2023 |
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| Pro Forma |
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| (unaudited) |
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| Condensed |
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| FGMC (Historical) |
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| iCore (Historical) |
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| Closing Adjustments |
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| Combined at Closing |
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Revenue |
| $ | - |
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| $ | 3,697 |
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| $ | - |
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| $ | 3,697 |
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Cost of Sales |
|
| - |
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|
| 975 |
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|
| - |
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|
| 975 |
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Gross Profit |
|
| - |
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|
| 2,722 |
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|
| - |
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| 2,722 |
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| - |
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OPERATING EXPENSES: |
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Selling, general and administrative |
|
| 1,617 |
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|
| 5,600 |
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|
| (1,617 | ) |
| M |
|
| 5,600 |
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Depreciation and amortization |
|
| - |
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|
| 581 |
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|
| - |
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|
| 581 |
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Total operating expenses |
|
| 1,617 |
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|
| 6,181 |
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|
| (1,617 | ) |
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|
| 6,181 |
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Loss from operations |
|
| (1,617 | ) |
|
| (3,459 | ) |
|
| 1,617 |
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|
| (3,459 | ) |
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OTHER INCOME (EXPENSE): |
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Interest expense |
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| - |
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|
| (529 | ) |
|
| - |
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|
|
| (529 | ) |
Finance charges |
|
| - |
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|
| (422 | ) |
|
| - |
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|
|
|
| (422 | ) |
Other income (expense) |
|
| 1,890 |
|
|
| 14 |
|
|
| 1,890 |
|
| N |
|
| 3,794 |
|
FV change of the FPA |
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|
|
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|
|
| (4,192 | ) |
| K |
|
| (4,192 | ) |
Total other income (expense), net |
|
| 1,890 |
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|
| (937 | ) |
|
| (2,302 | ) |
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| (1,349 | ) |
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TAXES: |
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Income tax expense (benefit) |
|
| 400 |
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|
| - |
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|
| - |
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|
| 400 |
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Total tax expense |
|
| 400 |
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|
| - |
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|
| - |
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|
| 400 |
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|
| - |
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NET LOSS |
|
| (127 | ) |
|
| (4,396 | ) |
|
| (685 | ) |
|
|
|
| (5,208 | ) |
1 |
iCoreConnect Inc. | ||||||||||||||||||
Unaudited Pro Forma Condensed Combined Balance Sheet | ||||||||||||||||||
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(in thousands) | ||||||||||||||||||
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| June 30, 2023 |
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| unaudited |
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| (unaudited) |
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| Transaction |
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| Pro Forma |
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| FGMC (Historical) |
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| iCore (Historical) |
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| Accounting Adjustments |
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| Condensed Combined |
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ASSETS |
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CURRRENT ASSETS: |
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Cash and cash equivalents |
| $ | 6.0 |
|
| $ | 69 |
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|
| 4,433 |
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| A,H |
|
| 613 |
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|
| 12,570 |
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| B,H |
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| (12,570 | ) |
| B |
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|
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|
| (3,895 | ) |
| D |
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Accounts receivable |
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| - |
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|
| 366 |
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|
| - |
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|
| 366 |
|
Prepaid expenses and other assets |
|
| 128 |
|
|
| 685 |
|
|
| - |
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|
|
|
| 813 |
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Total current assets |
|
| 134 |
|
|
| 1,120 |
|
|
| 538 |
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|
|
|
| 1,792 |
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Marketable securities held in trust account |
|
| 85,748 |
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|
| - |
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|
| (85,748 | ) |
| C |
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| - |
|
prepaid forward contract derivative |
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|
| 12,570 |
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| B |
|
| 8,378 |
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| (4,192 | ) |
| K |
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LONG TERM ASSETS: |
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Property and equipment - net |
|
| - |
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|
| 200 |
|
|
| - |
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|
|
| 200 |
|
Right of use lease asset - operating |
|
| - |
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|
| 853 |
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|
| - |
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|
| 853 |
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Software development costs, net |
|
| - |
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|
| 722 |
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|
| - |
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|
|
| 722 |
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Acquired technology, net |
|
| - |
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|
| 38 |
|
|
| - |
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|
|
|
| 38 |
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Customer relationships, net |
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|
|
| 1,990 |
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|
| - |
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|
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| 1,990 |
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Goodwill |
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|
| 1,484 |
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|
| - |
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|
| 1,484 |
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Total long term assets |
|
| - |
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|
| 5,287 |
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|
| - |
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| 5,287 |
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Total Assets |
|
| 85,882 |
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|
| 6,407 |
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|
| (76,832 | ) |
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| 15,457 |
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2 |
LIABILITIES |
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CURRENT LIABILITIES: |
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Accounts payable |
|
| 1,198 |
|
|
| 2,746 |
|
|
| (1,198 | ) |
| D |
|
| 2,746 |
|
Operating lease liability, current portion |
|
| - |
|
|
| 136 |
|
|
| - |
|
|
|
|
| 136 |
|
Notes payable, current portion |
|
| 845 |
|
|
| 5,664 |
|
|
| (5,097 | ) |
| G |
|
| 567 |
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|
|
|
|
|
|
|
|
|
|
| (845 | ) |
| F |
|
|
|
|
Deferred revenue |
|
| - |
|
|
| 88 |
|
|
| - |
|
|
|
|
| 88 |
|
Tax liabilities |
|
| 211 |
|
|
| - |
|
|
| - |
|
|
|
|
| 211 |
|
Total current liabilities |
|
| 2,254 |
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|
| 8,634 |
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|
| (7,140 | ) |
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|
|
| 3,748 |
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LONG-TERM LIABILITIES: |
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Long-term debt, net of current maturities |
|
| - |
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|
| 1,245 |
|
|
| - |
|
|
|
|
| 1,245 |
|
Operating lease liability, net of current portion |
|
| - |
|
|
| 755 |
|
|
| - |
|
|
|
|
| 755 |
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|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
Total long term liabilities |
|
| - |
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|
| 2,000 |
|
|
| - |
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|
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|
| 2,000 |
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|
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Total liabilities |
|
| 2,254 |
|
|
| 10,634 |
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|
| (7,140 | ) |
|
|
|
| 5,748 |
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Common stock subject to possible redemption, 8,050,000 shares at redemption value |
|
| 85,748 |
|
|
| - |
|
|
| (85,748 | ) |
| H |
|
| - |
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EQUITY |
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Preferred Stock |
|
| - |
|
|
| - |
|
|
| 0.21 |
|
| I |
|
| 379 |
|
|
|
|
|
|
|
|
|
|
|
| 0.08 |
|
| I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 378.22 |
|
| I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 0.16 |
|
| I |
|
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|
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|
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|
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Common Stock |
|
| 0.21 |
|
|
| 196 |
|
| - |
|
| E |
|
| 811 |
| |
|
|
|
|
|
|
|
|
|
|
| 0.16 |
|
| H |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (195.08 | ) |
| J |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (0.21 | ) |
| I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 0.08 |
|
| F |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (0.08 | ) |
| I |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
| I |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| (0.16 | ) |
| I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 809.59 |
|
| G |
|
|
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Additional paid-in capital |
|
| - |
|
|
| 88,849 |
|
|
| (2,697 | ) |
| D |
|
| 105,984 |
|
|
|
|
|
|
|
|
|
|
|
| 17,002 |
|
| H |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 195 |
|
| J |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (2,120 | ) |
| L |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 845 |
|
| F |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,287 |
|
| G |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (378 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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|
Accumulated other comprehensive income (loss) |
|
| (2,120 | ) |
|
| (93,272 | ) |
|
| 2,120 |
|
| L |
|
| (97,464 | ) |
|
|
|
|
|
|
|
|
|
|
| (4,192 | ) |
| K |
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
|
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Total stockholders’ equity |
|
| (2,120 | ) |
|
| (4,227 | ) |
|
| 16,055 |
|
|
|
|
| 9,708 |
|
Total liabilities and Stockholders' Equity |
|
| 85,882 |
|
|
| 6,407 |
|
|
| (76,832 | ) |
|
|
|
| 15,457 |
|
3 |
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Basis of Presentation
The unaudited pro forma condensed combined financial information has been prepared to illustrate the estimated effect of the Transactions.
The Transactions are shown as a reverse recapitalization as provided under U.S. GAAP. FG Merger Corp. is the acquired company, with iCoreConnect Inc. treated as the acquirer. This determination reflects iCoreConnect Inc. Equityholders holding a majority of the voting power of new iCoreConnect Inc., old iCoreConnect Inc.’s pre-merger operations being the majority post-merger operations of new iCoreConnect Inc, and old iCoreConnect Inc.’s management team retaining similar roles at new iCoreConnect Inc. Accordingly, although FG Merger Corp is the legal parent company, GAAP dictates that the financial statements of new iCoreConnect Inc. will represent a continuation of old iCoreConnect Inc.’s operations, with the Transactions being treated as though old iCoreConnect Inc. issued ownership interests for FG Merger Corp., accompanied by a recapitalization. The net assets of old iCoreConnect Inc. are stated at historical cost, with no incremental goodwill or other intangible assets recorded for the effects of the Merger with FG Merger Corp.
2. Accounting Policies
Based on an analysis of FG Merger Corp and old iCoreConnect Inc.’s policies there were no identified account policies that would have an impact on the unaudited pro forma condensed combined financial information. As a result the unaudited condensed combined financial information does not assume any differences in accounting policies.
2. Transaction Accounting Adjustments
A | Represents approximately $4.43 million retained in trust from non-redemptions. | |
| B | Represents $12.57 million worth of public shares purchase under the Forward Purchase Agreement. |
| C | Represents reclassification of cash and investments held in the Trust Account that becomes available at the closing of the Business Combination. |
| D | Represents transaction cost for FGMC and iCoreconnect expected to be paid in cash upon closing of the Business Combination. |
| E | Represents transaction cost for FGMC and iCoreconnect to be paid in equity upon closing of the Business Combination. |
| F | Represents convertible debt of $845k expected to convert into equity at the close of the Business Combination. |
| G | Represents amount of iCoreConnect debt that is expected to be converted by debt holders upon closing of Business Combination. |
| H | Represents reclassification of FGMC’s Common Stock subject to possible redemptions to permanent equity. This includes impact of non-redemptions for shares. |
| I | Represents conversion of FGMC non-redeemed common stock into shares of newly issued FGMC Preferred Stock. |
| J | Represents conversion of iCoreConnect Common Stock, including the vested warrants and options that have been converted to iCoreConnect Common Stock prior to the closing, into shares of Combined Company Common Stock at the Exchange Ratio. |
| K | Represents change in fair value of the public shares purchased under the Forward Purchase Agreement. |
| L | Reflects elimination of FGMC historical retained earnings at reverse acquisition. |
| M | Represents pro forma transaction accounting adjustment to eliminate historical expenses incurred by FGMC, which will not be recurring after the completion of the Business Combination. |
| N | Represents pro forma transaction accounting adjustment to eliminate interest income earned on FGMC’s Trust Account, which will not be recurring after the completion of the Business Combination. |
4 |