Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 20, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | iCoreConnect Inc. | |
Entity Central Index Key | 0001906133 | |
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 | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 8,951,472 | |
Entity File Number | 001-41309 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 86-2462502 | |
Entity Address Address Line 1 | 529 E. Crown Point Road | |
Entity Address Address Line 2 | Suite 250 | |
Entity Address City Or Town | Ocoee | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 34761 | |
City Area Code | 888 | |
Local Phone Number | 810-7706 | |
Security 12b Title | Common stock, par value $0.0001 per share | |
Trading Symbol | ICCT | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Cash | $ 457,389 | $ 196,153 |
Accounts receivable, net | 597,658 | 414,809 |
Prepaid expenses and other current assets | 963,779 | 480,706 |
Total current assets | 2,018,826 | 1,091,668 |
Property and equipment, net | 200,450 | 74,194 |
Right of use lease asset - operating | 1,182,810 | 944,487 |
Software development costs, net | 779,725 | 531,061 |
Acquired technology, net | 16,783 | 79,428 |
Customer relationships, net | 3,343,919 | 2,350,380 |
Forward purchase agreement | 7,377,265 | 0 |
Goodwill | 1,484,966 | 1,484,966 |
Total long-term assets | 14,385,918 | 5,464,516 |
TOTAL ASSETS | 16,404,744 | 6,556,184 |
Accounts payable and accrued expenses | 4,947,916 | 2,336,174 |
Operating lease liability, current portion | 243,187 | 169,417 |
Notes payable, current portion | 3,695,428 | 4,279,531 |
Deferred revenue | 111,531 | 13,847 |
Total current liabilities | 8,998,062 | 6,798,969 |
Long-term debt, net of current maturities | 0 | 1,449,261 |
Operating lease liability, net of current portion | 1,002,234 | 809,458 |
Total long-term liabilities | 1,002,234 | 2,258,719 |
TOTAL LIABILITIES | 10,000,296 | 9,057,688 |
Preferred Stock par value $0.0001; 40,000,000 shares authorized; Issued and Outstanding: 3,617,651 as of September 30, 2023 and 0 as of December 31, 2022 | 362 | 0 |
Common Stock par value $0.0001; 100,000,000 shares authorized; Issued and Outstanding: 8,373,132 as of September 30, 2023 and 6,076,078 as of December 31, 2022 | 838 | 608 |
Additional paid-in-capital | 113,828,297 | 80,359,848 |
Accumulated deficit | (107,425,049) | (82,861,960) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 6,404,448 | (2,501,504) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUIYT (DEFICIT) | $ 16,404,744 | $ 6,556,184 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 40,000,000 | 40,000,000 |
Preferred stock, shares issued | 3,617,651 | 0 |
Preferred stock, shares outstanding | 3,617,651 | 0 |
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 8,373,132 | 6,076,078 |
Common Stock, shares outstanding | 8,373,132 | 6,076,078 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||
Revenue, net | $ 2,004,853 | $ 1,888,768 | $ 5,701,372 | $ 5,943,818 |
Cost of sales | 517,875 | 517,660 | 1,493,357 | 1,773,173 |
Gross profit | 1,486,978 | 1,371,108 | 4,208,015 | 4,170,645 |
Expenses | ||||
Selling, general and administrative | 3,589,655 | 2,151,651 | 9,189,829 | 6,445,585 |
Depreciation and amortization | 320,427 | 286,622 | 900,936 | 1,000,722 |
Total operating expenses | 3,910,082 | 2,438,273 | 10,090,765 | 7,446,307 |
Loss from operations | (2,423,104) | (1,067,165) | (5,882,750) | (3,275,662) |
Other income (expense) | ||||
Interest expense | (478,437) | (216,523) | (1,007,120) | (561,395) |
Finance charges | (370,852) | (14,888) | (792,930) | (400,888) |
Change in fair value of forward purchase agreement | (419,407) | 0 | (419,407) | 0 |
Other income (expense) | 0 | (103,400) | 13,778 | (193,393) |
Total other expense, net | (1,268,696) | (334,811) | (2,205,679) | (1,155,676) |
Net loss | (3,691,800) | (1,401,976) | (8,088,429) | (4,431,338) |
Preferred dividend | (218,516) | 0 | (218,516) | 0 |
Net loss attributable to common stockholders | $ (3,910,316) | $ (1,401,976) | $ (8,306,945) | $ (4,431,338) |
Net loss per share available to common stockholders, basic and diluted | $ (0.54) | $ (0.24) | $ (1.23) | $ (0.77) |
Weighted average number of shares, basic and diluted | 7,260,195 | 5,777,806 | 6,744,143 | 5,762,324 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) (UNAUDITED) - USD ($) | Total | Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2021 | 5,613,073 | ||||
Balance, amount at Dec. 31, 2021 | $ (9,237,726) | $ 561 | $ 0 | $ 83,799,993 | $ (93,038,280) |
Balances as previously reported, amount | 1,005,291 | $ 167,493 | 83,633,061 | (82,795,263) | |
Balances as previously reported, shares | 167,493,479 | ||||
Retroactive application of reverse capitalization (Note 3), shares | (161,880,406) | ||||
Retroactive application of reverse capitalization (Note 3), amount | (10,243,017) | $ (166,932) | 166,932 | (10,243,017) | |
Stock issued for cash, shares | 158,273 | ||||
Stock issued for cash, amount | 350,000 | $ 16 | 0 | 349,984 | |
Origination fee in convertible debt agreement | 300,000 | 300,000 | |||
Stock compensation expense | 255,697 | 255,697 | |||
Net loss | (1,542,235) | $ 0 | 0 | (1,542,235) | |
Balance, shares at Mar. 31, 2022 | 5,771,346 | ||||
Balance, amount at Mar. 31, 2022 | (9,874,264) | $ 577 | 0 | 84,705,674 | (94,580,515) |
Balance, shares at Dec. 31, 2021 | 5,613,073 | ||||
Balance, amount at Dec. 31, 2021 | (9,237,726) | $ 561 | 0 | 83,799,993 | (93,038,280) |
Stock compensation expense | 783,514 | ||||
Net loss | (4,431,338) | ||||
Balance, shares at Sep. 30, 2022 | 5,778,631 | ||||
Balance, amount at Sep. 30, 2022 | (12,157,275) | $ 578 | 0 | 85,311,765 | (97,469,618) |
Balance, shares at Mar. 31, 2022 | 5,771,346 | ||||
Balance, amount at Mar. 31, 2022 | (9,874,264) | $ 577 | 0 | 84,705,674 | (94,580,515) |
Origination fee in convertible debt agreement | 86,000 | 86,000 | 0 | ||
Net loss | (1,487,127) | $ 0 | 0 | (1,487,127) | |
Stock issued for conversion of debt, shares | 7,620 | ||||
Stock issued for conversion of debt, amount | 22,387 | $ 1 | 22,386 | ||
Repurchase of common stock warrants | (45,000) | (45,000) | |||
Stock compensation expense, shares | 1,005 | ||||
Stock compensation expense, amount | 272,560 | $ 0 | 272,560 | 0 | |
Balance, shares at Jun. 30, 2022 | 5,779,971 | ||||
Balance, amount at Jun. 30, 2022 | (11,025,444) | $ 578 | 0 | 85,041,620 | (96,067,642) |
Origination fee in convertible debt agreement | 14,888 | 0 | 14,888 | 0 | |
Net loss | (1,401,976) | $ 0 | 0 | (1,401,976) | |
Stock compensation expense, shares | (1,340) | ||||
Stock compensation expense, amount | 255,257 | $ 0 | 255,257 | 0 | |
Balance, shares at Sep. 30, 2022 | 5,778,631 | ||||
Balance, amount at Sep. 30, 2022 | (12,157,275) | $ 578 | 0 | 85,311,765 | (97,469,618) |
Balance, shares at Dec. 31, 2022 | 6,076,078 | ||||
Balance, amount at Dec. 31, 2022 | (12,699,579) | $ 608 | 0 | 86,417,917 | (99,118,104) |
Retroactive application of reverse capitalization (Note 3), shares | (175,244,450) | ||||
Retroactive application of reverse capitalization (Note 3), amount | (10,198,075) | $ (180,713) | 225,655 | (10,243,017) | |
Stock issued for cash, shares | 180,966 | ||||
Stock issued for cash, amount | 540,000 | $ 18 | 539,982 | ||
Origination fee in convertible debt agreement | 80,063 | 80,063 | |||
Net loss | (1,689,034) | (1,689,034) | |||
Stock issued for conversion of debt, shares | 236,502 | ||||
Stock issued for conversion of debt, amount | 685,333 | $ 24 | 685,309 | ||
Stock compensation expense, shares | 5,027 | ||||
Stock compensation expense, amount | 272,983 | $ 1 | 272,982 | ||
Balances as previously reported, amount | (2,501,504) | $ 181,321 | 86,192,262 | (88,875,087) | |
Balances as previously reported, shares | 181,320,528 | ||||
Balance, shares at Mar. 31, 2023 | 6,498,573 | ||||
Balance, amount at Mar. 31, 2023 | (12,810,234) | $ 651 | 0 | 87,996,253 | (100,807,138) |
Balance, shares at Dec. 31, 2022 | 6,076,078 | ||||
Balance, amount at Dec. 31, 2022 | (12,699,579) | $ 608 | $ 0 | 86,417,917 | (99,118,104) |
Stock compensation expense | 1,434,900 | ||||
Net loss | (8,306,945) | ||||
Repurchase of common stock warrants | (600,000) | ||||
Balance, shares at Sep. 30, 2023 | 8,373,132 | 3,617,651 | |||
Balance, amount at Sep. 30, 2023 | 6,404,448 | $ 838 | $ 362 | 113,828,297 | (107,425,049) |
Balance, shares at Mar. 31, 2023 | 6,498,573 | ||||
Balance, amount at Mar. 31, 2023 | (12,810,234) | $ 651 | 0 | 87,996,253 | (100,807,138) |
Origination fee in convertible debt agreement | 342,015 | 342,015 | |||
Net loss | (2,707,595) | (2,707,595) | |||
Stock issued for conversion of debt, shares | (6,832) | ||||
Stock issued for conversion of debt, amount | 0 | $ (1) | 1 | ||
Stock compensation expense, shares | 81,267 | ||||
Stock compensation expense, amount | 751,161 | $ 8 | 751,153 | ||
Balance, shares at Jun. 30, 2023 | 6,573,008 | ||||
Balance, amount at Jun. 30, 2023 | (14,424,653) | $ 658 | $ 0 | 89,089,422 | (103,514,733) |
Origination fee in convertible debt agreement | 370,852 | 370,852 | 0 | ||
Net loss | (3,910,316) | (3,910,316) | |||
Stock issued for conversion of debt, shares | 211,040 | (211,040) | |||
Stock issued for conversion of debt, amount | $ 21 | $ (21) | 0 | ||
Stock compensation expense, shares | 70,139 | ||||
Stock compensation expense, amount | 410,757 | $ 7 | 410,750 | ||
Issuance of Series A Preferred Stock on merger, shares | 3,782,191 | ||||
Issuance of Series A Preferred Stock on merger, amount | 17,847,298 | $ 378 | 17,846,920 | ||
Common stock issued on conversion of convertible debt, shares | 1,163,266 | ||||
Common stock issued on conversion of convertible debt, amount | 5,062,164 | $ 116 | 5,062,048 | ||
Common stock issued on exercise of warrants, shares | 117,301 | ||||
Common stock issued on exercise of warrants, amount | (3,500) | $ 12 | (3,512) | ||
Common stock issued on exercise of options, shares | 198,378 | ||||
Common stock issued on exercise of options, amount | (5,920) | $ 20 | (5,940) | ||
Series A Preferred Stock issued for cash, shares | 46,500 | ||||
Series A Preferred Stock issued for cash, amount | 465,000 | $ 5 | 464,995 | ||
Stock issued for purchase of assets of Preferred Dental, shares | 40,000 | ||||
Stock issued for purchase of assets of Preferred Dental, amount | 400,000 | $ 4 | 399,996 | ||
Modification of warrant agreement | 1,987,460 | 1,987,460 | |||
Merger transaction costs | (1,794,694) | (1,794,694) | 0 | ||
Balance, shares at Sep. 30, 2023 | 8,373,132 | 3,617,651 | |||
Balance, amount at Sep. 30, 2023 | $ 6,404,448 | $ 838 | $ 362 | $ 113,828,297 | $ (107,425,049) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (8,306,945) | $ (4,431,338) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 13,753 | 16,788 |
Amortization expense | 887,183 | 983,934 |
Finance fee | 792,930 | 425,846 |
Change in allowance for doubtful accounts | 130,439 | 137,676 |
Gain on sale of assets | (13,778) | 0 |
Stock compensation expense | 1,434,900 | 783,514 |
Non-cash interest expense | 720,357 | 217,434 |
Change in fair value of forward purchase agreement | 419,407 | 0 |
Preferred dividend | 218,516 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (313,288) | (13,759) |
Prepaid expenses and other current assets | (483,073) | (56,064) |
Right of use asset, net of lease liability | 28,223 | 26,533 |
Accounts payable and accrued expenses | 2,611,741 | 238,841 |
Deferred revenue | 97,684 | (5,096) |
NET CASH USED IN OPERATING ACTIVITIES | (1,761,951) | (1,675,691) |
INVESTING ACTIVITIES | ||
Purchase of customer list | (1,559,145) | 0 |
Sale of capital assets | $ 28,000 | 0 |
Purchase of forward purchase agreement | (7,796,672) | |
Purchase of capital assets | $ (154,231) | 0 |
Additions to capitalized software | (507,596) | (200,947) |
NET CASH USED IN INVESTING ACTIVITIES | (9,989,644) | (200,947) |
FINANCING ACTIVITES | ||
Net proceeds from debt | 3,733,011 | 3,450,000 |
Payments on debt | (6,486,732) | (1,809,713) |
Proceeds from issuance of common stock | 540,000 | 350,000 |
Purchase of common stock warrants | 0 | (45,000) |
Stock issued for conversion of convertible debt | 5,747,497 | 22,387 |
Proceeds from issuance of preferred stock | 18,312,298 | |
Effect of merger, net of transaction costs | (9,833,243) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 12,012,831 | 1,967,674 |
NET CHANGE IN CASH | 261,236 | 91,036 |
CASH AT BEGINNING OF THE PERIOD | 196,153 | 71,807 |
CASH AT END OF THE PERIOD | 457,389 | 162,843 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid during the period for interest | $ 348,941 | $ 529,325 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2023 | |
NATURE OF OPERATIONS | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS iCoreConnect Inc. (formerly known as FG Merger Corp) (collectively with its subsidiary, the “Company”), a Delaware Corporation, is a cloud-based software and technology company focused on increasing workflow productivity and customer profitability through its enterprise platform of applications and services. Prior to August 25, 2023, the Company was a special purpose acquisition company formed for the purpose of entering into a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. On August 25, 2023 (the “Closing Date”), the Company consummated the business combination contemplated by the Merger Agreement and Plan of Reorganization by and among FG Merger Corp, a special purpose acquisition company incorporated in Delaware (“FGMC”), FG Merger Sub, Inc., a Nevada corporation and wholly owned subsidiary of FGMC (“Merger Sub”), and iCoreConnect Inc., a Nevada corporation(“iCore”), dated as of January 5, 2023 (“Merger Agreement”). Pursuant to the terms of the Merger Agreement, a business combination between FGMC and iCore. was affected through the merger of Merger Sub with and into iCore, with iCore. surviving the merger as a wholly owned subsidiary of FGMC. On the Closing Date, FGMC was renamed “iCoreConnect Inc.” and the previous iCoreConect Inc. was renamed “iCore Midco, Inc.” (“Old iCore”). Business Combinations On September 1, 2023, the Company completed the acquisitions for substantially all of the assets of Preferred Dental Development, LLC which was accounted for a business combination. During 2021, the Company also completed three asset acquisitions which were accounted for as business combinations (i) on April 23, 2021, the Company acquired substantially all the assets of Heyns Unlimited LLC doing business as Advantech (ii) on May 31, 2021, the Company acquired substantially all the assets of BCS Tech Center, Inc.; and (iii) on September 1, 2021, the Company acquired substantially all the assets of Spectrum Technology Solutions, LLC Going Concern and Liquidity The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. For the nine months ended September 30, 2023, the Company generated an operating loss of $5,882,750. In addition, at September 30, 2023, the Company has an accumulated deficit, and net working capital deficit of $107,425,049 and $6,979,236 respectively. The Company’s activities were primarily financed through private placements of equity securities and issuance of debt. 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. Such financings 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 for a period of 12 months from the issuance date of these financial statements. Currently, management intends to develop an improved healthcare communications system and intends to develop alliances with strategic partners to generate revenues that will sustain the Company. While management believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. Management’s ability to continue as a going concern is ultimately dependent upon its ability to continually increase the Company’s customer base and realize increased revenues from signed contracts. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNFICANT ACCOUNTING POLICES Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Annual Report on Form 10-K/A as filed with the SEC on June 16, 2023 by Old iCore and the Form 8-K filed by the Company on August 31, 2023. The interim results for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are customer obligations due under normal trade terms. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the potential inability of certain customers to make required future payments on amounts due. 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 the Company’s 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 customers improves and collections of amounts outstanding commence or are reasonably assured, then the Company may reverse previously established allowances for doubtful accounts. The Company has estimated and recorded an allowance for doubtful accounts of approximately $80,905 at September 30, 2023 and $65,000 December 31, 2022. 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. The Company has determined that technological feasibility for its 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. Long-Lived Assets and Goodwill The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets The Company accounts for goodwill and intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Revenue Recognition We have 6 primary sources of revenue 1. Electronic Prescription Software 2. Insurance Verifications 3. ICD-10 Medical Coding Software 4. Encrypted and HIPAA Compliant Secure email 5. Analytics 6. MsaaS software 1) Electronic Prescription software services are provided on an annual subscription basis using the software as a service (‘SaaS’) model with revenue recognized ratably over the contract term. 2). Insurance verification services are provided on an annual subscription basis using SaaS model with revenue recognized ratably over the contract term. 3) ICD-10 Medical Coding services are provided on an annual subscription basis using the software as a SaaS model with revenues recognized ratably over the contract term. 4) Encrypted and HIPAA compliant and secure email services are provided on an annual subscription basis using the SaaS model with revenues recognized ratably over the contract term. 5) Analytics automatically compiles real-time KPI data on an intuitive dashboard which saves time and helps focus the team during the morning huddle. Additionally, the Practice Metrics page provides custom reporting with rich graphics helping management to view revenue, claims, AR, scheduling and more. 6) MSaaS software services are provided on an annual subscription basis using the software as a service (‘SaaS’) model with revenue recognized ratably over the contract term. The Company accounts for revenue from contracts with customers in accordance with ASU No. 2017-09, Revenue from Contracts with Customers and a series of related accounting standard updates (collectively referred to as “Topic 606”). This guidance sets forth a five-step revenue recognition model which replaced the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance and to require more detailed disclosures. The five steps of the revenue recognition model are: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, the Company assesses the goods and services promised in the contract with customers and identifies a performance obligation for each. To determine the performance obligation, the Company considers all products and services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. The timing of satisfaction of the performance obligation is not subject to significant judgment. The Company measures revenue as the amount of consideration expected to be received in exchange for transferring goods and services. Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities. The Company’s customers are acquired through its own salesforce and through the referrals from its many state association marketing partners. The Company primarily generates revenue from multiple software as a service (SaaS) offerings, which typically include subscriptions to its 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. Approximately 90% of the Company’s revenue is subscription based with the remainder being professional services and other IT related revenue. The geographic concentration of the Company’s revenue is 100% in North America. Management has determined that it has the following performance obligations related to its products and services: multiple SaaS offerings, which typically include subscriptions to our online software solutions. Revenue from Software as a Service, hardware, service repairs, and support & maintenance are all recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract, or services is completed. 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. Substantially 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. For contracts with customers that contain multiple performance obligations, the Company accounts for the promised performance obligations separately as individual performance obligations if they are distinct. In determining whether performance obligations meet the criteria for being distinct, the Company considers several factors, including the degree of interrelation and interdependence between obligations and whether or not the good or service significantly modifies or transforms another good or service in the contract. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company generally determines the standalone selling prices based on the prices charged to customers. Judgment may be used to determine the standalone selling prices for items that are not sold separately, including taking into consideration either historical pricing practices or an adjusted market assessment. Unsatisfied and partially unsatisfied performance obligations as of the end of the reporting period primarily consist of products and services for which customer purchase orders have been accepted and that are in the process of being delivered. Transaction price is calculated as the selling price less any variable consideration, consisting of rebates and discounts. Discounts provided to customers are known at contract inception. Rebates are calculated on the “expected value” method where the Company (1) estimates the probability of each rebate amount which could be earned by the distributor, (2) multiplies each estimated amount by its assigned probability factor, and (3) calculates a final sum of each of the probability-weighted amounts calculated in step (2). The sum calculated in step (3) is the rebate amount, which along with discounts reduces the amount of revenue recognized. The Company has elected to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost rather than as an additional promised service. As a result, the Company accrues the costs of shipping and handling when the related revenue is recognized. Costs incurred for shipping and handling are included in costs of goods sold on the Consolidated Statements of Operations. Amounts billed to a customer for shipping and handling are reported as revenue on the Consolidated Statements of Operations. Advertising Costs Advertising costs are reported in selling, general and administrative expenses and include advertising, marketing and promotional programs and are charged as expenses in the year in which they are incurred. Advertising costs were $129,204 and $93,657 for the three months ended September 30, 2023 and 2022 and $435,672 and $357,350 for the nine months ended September 30, 2023 and 2022, respectively. Accounting for Derivative Instruments The Company accounts for derivative instruments in accordance with ASC 815 “Derivatives and Hedging”, 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. Financial Instruments With Down Round Features The Company follows the guidance of FASB ASU 2017-11, “Earnings per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); and Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. ASU 2017-11 simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downround adjustment of the current exercise price based on the price of the future equity offerings. The standard requires companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for the purposes of determining liability of equity classification. Companies that provide earning per share (“EPS”) data will adjust their diluted EPS calculation for the effect of the feature when triggered (i.e. when the exercise price of the related equity-linked financial instrument is adjusted downward because of the down round feature) and will also recognize the effect of the trigger within equity. 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 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 accounts for share-based compensation costs in accordance with ASC 718, Compensation – Stock Compensation. ASC 718 requires companies to measure the cost of awards of equity instruments, including stock options and restricted stock awards, based on the grant-date fair value of the award and to recognize it as compensation expense over the employee’s requisite service period or the non-employee’s vesting period. An employee’s requisite service period is the period of time over which an employee must provide service in exchange for an award under a share-based payment arrangement and generally is presumed to be the vesting period. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in additional paid in capital, 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. 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. Beneficial Conversion Features and Warrants The Company evaluates the conversion feature of convertible debt instruments to determine whether the conversion feature was beneficial as described in ASC 470-30, Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital. The Company calculates the fair value of warrants with the convertible instruments using the Black-Scholes valuation model. Under these guidelines, the Company first allocates the value of the proceeds received from a convertible debt transaction between the convertible debt instrument and any other detachable instruments included in the transaction (such as warrants) on a relative fair value basis. A BCF is then measured as the intrinsic value of the conversion option at the commitment date, representing the difference between the effective conversion price and the Company’s stock price on the commitment date multiplied by the number of shares into which the debt instrument is convertible. The allocated value of the BCF and warrants are recorded as a debt discount and accreted over the expected term of the convertible debt as interest expense. If the intrinsic value of the BCF is greater than the proceeds allocated to the convertible debt instrument, the amount of the discount assigned to the BCF is limited to the amount of the proceeds allocated to the convertible debt instrument. Leases The Company adopted ASU No. 2016-02, Leases and a series of related Accounting Standards Updates that followed (collectively referred to as “Topic 842”). Topic 842 requires organizations to recognize right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. The FASB retained the distinction between finance leases and operating leases, leaving the effect of leases in the statement of comprehensive income and the statement of cash flows largely unchanged from previous U.S. GAAP. The Company utilized the transition method allowed under ASU 2018-11 in which an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if any. The Company determines, at contract inception, whether or not an arrangement contains a lease and evaluates the contract for classification as an operating or finance lease. For all leases, ROU assets and lease liabilities are recognized based on the present value of lease payments, including annual rent increases, over the lease term at commencement date. If the Company’s lease does not provide an implicit rate in the contract, the Company uses its incremental, secured borrowing rate based on lease term information available as of the adoption date or lease commencement date in determining the present value of lease payments. Any renewal periods are considered in the analysis of each lease to the extent that the Company considers them to be reasonably certain of being exercised. Related Party Transactions The Company accounts for related party transactions in accordance with FASB ASC 850, Related Party Disclosures Reportable Segments U.S. GAAP establishes standards for reporting financial and descriptive information about a company’s reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The chief operating decision maker is the Company’s Chief Executive Officer, who currently reviews the financial performance and the results of operations of the Company’s operating subsidiaries on a consolidated basis when making decisions about allocating resources and assessing performance of the Company. Accordingly, the Company currently considers itself to be in a single reporting segment for reporting purposes focused on the North American market. Allowance for Credit Losses On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected. The Company completed its assessment on the adoption date of the new standard and did not adjust the opening balance of retained earnings relating to its trade receivables. The Company writes off receivables once it is determined that they are no longer collectible, as local laws allow. Recently Issued Accounting Pronouncements The Company does not believe that any issued, but not yet effective accounting standards, if currently adopted, will have a material effect on the Company’s financial position, results of operations and cash flows. |
BUSINESS COMBINATION AND RECAPI
BUSINESS COMBINATION AND RECAPITALIZATION | 9 Months Ended |
Sep. 30, 2023 | |
BUSINESS COMBINATION AND RECAPITALIZATION | |
BUSINESS COMBINATION AND RECAPITALIZATION | 3. BUSINESS COMBINATION AND RECAPITALIZATION On August 25, 2023, Old iCore and FGMC consummated the Business Combination, with Old iCore surviving as a wholly owned subsidiary of FGMC. As part of the Business Combination, FGMC changed its name to iCoreConnect Inc. Upon the closing of the Business Combination (the “Closing”), the Company’s certificate of incorporation provided for, among other things, a total number of authorized shares of capital stock of 140,000,000 shares, of which 40,000,000 shares were designated Series A preferred stock, $0.0001 par value per share and 100,000,000 were designated common stock, $0.0001 par value per share. The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, FGMC is treated as the “acquired” company and Old iCore is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Old iCore issuing stock for the net assets of FGMC, accompanied by a recapitalization. The net assets of FGMC are stated at historical cost, with no goodwill or intangible assets recorded. Upon the consummation of the Business Combination, each issued and outstanding share of Old iCore Common Stock was canceled and converted into Company Common Stock based upon the Exchange Ratio (as defined in the Merger Agreement). The shares and corresponding capital amounts and loss per share related to Old iCore Common Stock prior to the Business Combination have been retroactively restated to reflect the Exchange Ratio. All non-redeemed shares of FGMC common stock were converted into new iCoreConnect Inc. Series A preferred stock (the “Preferred Stock”) on a one for one basis. Unvested outstanding stock options to purchase shares of Old iCore Common Stock (“Old iCore Options”) granted under the iCoreConnect Inc 2016 Stock Incentive Plan (“2016 Plan”) converted into stock options for shares of Company Common Stock upon the same terms and conditions that were in effect with respect to such stock options immediately prior to the Business Combination, after giving effect to the Exchange Ratio (the “Exchanged Options”). Old iCore Options that were vested at the time of the merger converted into shares of Company Common Stock upon the same terms and conditions that were in effect with respect to such options immediately prior to the Business Combination, after giving effect to the Exchange Ratio. Outstanding warrants to purchase shares of Old iCore Common Stock (“Old iCore warrants”) issued and outstanding converted into shares of Company Common Stock upon the same terms and conditions that were in effect with respect to such warrants immediately prior to the Business Combination, after giving effect to the Exchange Ratio. The following table details the number of shares of Company Common Stock issued immediately following the consummation of the Business Combination: Common Stock Preferred Stock Common stock of FGMC outstanding prior to business combination 8,050,000 - Less: Redemptions of FGMC common stock (6,460,059 ) - Common stock held by former FGMC shareholders 1,589,941 - FGMC sponsor shares 1,692,374 - Underwriter shares 40,250 - Sponsor shares transferred for services 2,000 - Sponsor shares transferred for non-redemption 373,126 - Shares issued related to extension note 84,500 - Total FGMC common shares outstanding prior to conversion to preferred stock 3,782,191 - Conversion of existing FGMC common stockholders to new preferred stock (3,782,191 ) 3,782,191 Shares issued to Old iCore stockholders for purchase consideration 8,095,706 - Total 8,095,706 3,782,191 The following table reconciles the elements of the Business Combination to the Company’s condensed consolidated statement of changes in stockholders’ equity (deficit): Amount Cash - FGMC trust (net of redemptions) $ 17,002,897 Cash transferred to Forward Purchase Agreement (12,569,810 ) Gross proceeds 4,433,087 Less: FGMC and Old iCore transaction costs paid (4,433,087 ) Effect of Business Combination, net of redemptions and transaction costs $ - All existing FGMC warrants were converted into Preferred Stock warrants with the same terms and conditions: Holder Number of Warrants Strike Price Underwriter 600,000 $ 2.00 Sponsor and Investors 10,122,313 $ 11.50 Sponsor 1,000,000 $ 15.00 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2023 | |
NOTES PAYABLE | |
NOTES PAYABLE | 4. NOTES PAYABLE September 30, December 31, 2023 2022 (1) Convertible Note bearing interest at 12% due May, 2023 - 578,802 (2) Note bearing interest at 18% due September 1, 2023 - 1,012,500 (2) Note bearing interest at 18% due September 1, 2023 - 506,250 (3) Note bearing interest at 18% due October 1, 2028 30,074 32,752 (4) Secured Promissory Note bearing interest at 17.5% due February 28, 2026 1,962,990 1,960,965 (5) Promissory Note bearing interest at 14%, due January 15, 2023 - 50,892 (6) Promissory Note bearing interest at 14%, due September 1, 2023 - 329,227 (7) Related Party Promissory Note bearing interest at 14% due September 1, 2023 70,035 108,778 (8) Promissory Note bearing interest at 15%, due January 25, 2023 - 506,370 (9) Promissory Note bearing interest at 15%, due September 1, 2023 - 253,184 (9) Promissory Note bearing interest at 15%, due September 1, 2023 - 253,184 (10) Related Party Promissory Notes bearing interest at 18%, due March 31, 2023 - 135,888 (11) Convertible Note bearing interest at 15% due March 2024 - - (7) Related Party Promissory Note bearing interest at 18%, due September 1, 2023 213,970 - (12) Convertible Note bearing interest at 15% due June 14, 2024 - - (13) Convertible Note bearing interest at 15% due June 14, 2024 - - (14) Related Party Convertible Promissory Note bearing interest at 15% due June 30, 2024 206,523 - (15) Convertible Note bearing interest at 15% due July 24, 2024 - - (16) Promissory Note bearing interest at 12%, due October 31, 2023 1,211,836 3,695,428 5,728,792 Less current maturities (3,695,428 ) (4,279,531 ) Total Long-Term Debt $ - $ 1,449,261 1. In April 2021, the Company signed a $500,000 convertible promissory note with a maturity date twelve months after issuance and received in exchange $500,000. An interest charge of 12% per annum shall accrue and be paid on the maturity date. The note is convertible into the Company’s Common Stock at a fixed conversion price of $0.10 per common share based on Old iCore common share value. The Company has right of prepayment. The note holder is limited to receive upon conversion no more than 4.99% of the issued and outstanding Common Stock at the time of conversion at any one time. The Company also issued to the Holder 788,000 restricted shares of the Company’s Common Stock and a warrant to purchase 2,600,000 shares of Company Common Stock with a 5-year term. The exercise price per share of Common stock under this Warrant is $0.20 per share for the first 1,300,000 Warrant Shares and $0.25 for the next 1,300,000 Warrant Shares. In August 2021 the down round provision in the Warrant Agreement was triggered resulting in an additional 3,250,000 warrants being issued and the strike price repriced to $0.10 for all 5,850,000 warrants. In December 2022, the down round provision in the Warrant Agreement was triggered again resulting in an additional 1,462,500 warrants to be issued and the strike price repriced to $0.08 for all 7,312,500 warrants. At Maturity this note was renegotiated and term extended to June 2023 for an additional principal consideration of $55,400 under the same interest rate and conditions as the matured note. This note and accrued interest was converted in January 2023 for 6,037,883 shares of Common Stock. In May 2023 the Company and the warrant holder renegotiated the outstanding warrants back to their original intended values at issuance date of 1,300,000 exercisable at $0.25 and 1,300,000 exercisable at $0.20. 2. In August 2021, the Company signed a $1,000,000 and $500,000 promissory note with a maturity date 24 months after issuance. An interest charge of 15% per annum shall accrue and be paid monthly. The Company also issued to the Holder 1,000,000 restricted shares of the Company’s Common Stock and 1,500,000 cash Warrant Shares with a 5-year term. The exercise price per share of Common stock under this Warrant is $0.25 per share. In December 2021 the down round provision in the Warrant Agreement was triggered resulting in an additional 2,250,000 warrants being issued and the strike price repriced to $0.10 for all 3,750,000 warrants. In December 2022 the down round provision in the Warrant Agreement was triggered again resulting in an additional 937,500 warrants being issued and the strike price repriced to $0.10 for all 4,687,500 warrants. In May the Company and the warrant holder renegotiated the outstanding warrants back to their original intended values at issuance date of 1,500,000 exercisable at $0.25. The promissory note is subordinated to the Company’s senior lenders. As part of the Merger these notes along with outstanding interest was converted on August 25, 2023 into 173,339 common shares. 3. In November 2021, the Company signed a $40,071 equipment finance agreement with a maturity date 60 months after issuance from a third-party financing company. Payments of principal and interest of $791 are due monthly. 4. On February 28, 2022, the Company signed a $2,000,000 secured promissory note with a maturity date 48 months after issuance and received in exchange $1,970,000 net of fees. An Interest charge of 17.5% per annum shall accrue, with interest only payments being made for the first six months after which both interest and principal will be due. The Company has right of prepayment subject to certain minimum interest payments being made. The Prepayment Fee shall be (i) equal to 6 months’ interest that would have accrued with regard to the prepaid principal, if prepaid prior to the 2nd anniversary of the date of the Initial Advance or Subsequent Advance, as applicable, and (ii) equal to 3 months’ interest that would have accrued with regard to the prepaid principal, if prepaid on or after the 2nd anniversary and prior to the 3rd anniversary of the date of the Initial Advance or Subsequent Advance, as applicable. Additionally, the Company has the following covenant requirements; maintaining a minimum cash balance of $150,000 in its combined bank accounts as well as entering into a Deposit Account Control Agreement; monthly financial reporting requirements and certifications; obtaining other indebtedness without consent; merge, consolidate or transfer assets; pledge assets as collateral; or guarantee without consent of the Lender. As of September 30, 2023, the Company was in default of certain provisions of its $1,962,990 debt obligation. The debt is being classified as current, given the uncertainty that the Company cannot ensure compliance is probable or reasonably possible after December 31, 2023 5. In April 2022, the Company signed a $50,000 unsecured promissory note with a maturity date six (6) months after issuance with an interest charge of 14% per annum which shall accrue and be paid on the maturity date. The Company has the right to prepay this note without penalty. At maturity in October 2022, this note was reissued under the same term with a maturity of three (3) months. The promissory note is subordinated to the Company’s senior lender. This note was fully repaid in March 2023. 6. In April 2022, the Company signed a $300,000 unsecured promissory note with a maturity date six (6) months after issuance with an interest charge of 14% per annum which shall accrue and be paid on the maturity date. The Company has the right to prepay this note without penalty. At maturity in October 2022, this note was reissued under the same terms with a maturity of date of six (6) months. In March 2023, the term of this note was extended to September 1, 2023.The promissory note is subordinated to the Company’s senior lenders. As part of the Merger this note along with outstanding interest was converted on August 25, 2023 into 41,104 common shares. 7 In June 2022, the Company signed a $100,000 unsecured promissory note with related party with a maturity date six (6) months after issuance with an interest charge of 14% per annum which shall accrue and be paid on the maturity date. The Company has the right to prepay this note without penalty. At maturity in November 2022, this note was reissued under the same terms with a maturity of date of three (3) months. The Company also issued to the Holder a warrant to purchase 18,813 shares of Company Common Stock with a 5-year term. The exercise price per share of Common stock under this Warrant is $0.25 per share for 9,407 warrants and $0.20 per share for 9,406 warrants. In March 2023, the term of this note was extended to September 1, 2023. In June 2023 the Company signed a $145,010 unsecured promissory note with the same lender with a maturity date of September 1, 2023 after issuance with an interest rate charge of 18% per annum which shall accrue and be paid on the maturity date. The Company has the right to prepay this note without penalty. The promissory notes are subordinated to the Company’s senior lenders. 8. In July 2022, the Company signed a $500,000 unsecured promissory note with a maturity date six (6) months after issuance with an interest charge of 14% per annum. The note is callable by the Holder no earlier than 90 days from issue. The Company has the right to prepay this note without penalty. The Company issued to the Holder a warrant to purchase 175,000 shares of Company Common Stock with a 5-year term. The exercise price per share of Common stock under this Warrant is $0.25 per share for 87,500 warrants and $0.20 per share for 87,500 warrants. This note was fully repaid in March 2023. 9. In August 2022, the Company signed two $250,000 unsecured promissory notes with a maturity date six (6) months after issuance with an interest charge of 14% per annum to the same investor in 14 and 9. The notes are callable by the Holder no earlier than 90 days from issue. The Company has the right to prepay this note without penalty. The Company issued to the Holder a warrant to purchase 175,000 shares of Company Common Stock with a 5-year term. The exercise price per share of Common stock under this Warrant is $0.25 per share for 87,500 warrants and $0.20 per share for 87,500 warrants. In March 2023, the term of these notes were extended to September 1, 2023.The promissory notes are subordinated to the Company’s senior lenders. As part of the Merger these notes along with outstanding interest was converted on August 25, 2023 into 57,780 common shares. 10. In December 2022, the Company entered into an unsecured promissory note with related party in exchange for $55,000. The maturity of the promissory note is four months from the date of issuance and carries an interest rate of 15% per annum. In conjunction with the promissory note, the Company also issued a warrant to purchase 23,625 shares of common stock which expires five years December 15, 2022 and has an exercise price of $0.20 with respect to 11,813 shares underlying the Warrant and $0.25 with respect to 11,812 shares underlying the Warrant. The promissory note is subordinated to the Company’s senior lender. In addition, in December 2022, the Company entered into an unsecured convertible promissory note with the same related party in exchange for $80,000. The maturity of the convertible note is March 31, 2023 and carries an interest rate of 15% per annum and is convertible into Company common stock at a conversion rate of $0.08 per share. The Convertible Note was converted into 1,019,315 shares of Common Stock in January 2023 and the Promissory Note was fully repaid in March 2023. 11. In March 2023, the Company entered into a twelve (12) month Convertible Secured Promissory Note (“Note”). The Note is for $2,500,000 with $500,000 paid to the Holder on issuance for net proceeds of $2,000,000. The Note carries and interest of 15% per annum which can be paid in cash or kind and it is convertible either into the Company’s Common Stock after six months from date of issuance at $0.10 per share, or if the business combination between FG Merger Corp. (“FGMC”) and the Company pursuant to the Merger Agreement and Plan of Reorganization by and among FGMC, FG Merger Sub Inc., and the Company dated January 5, 2023, as such agreement may be amended from time to time (the “Business Combination”), occurs then, upon any subsequent conversion of the Note, the holder shall no longer have the right to receive Company common stock upon conversion of the Note, but shall have the right to receive, for each share of Company common stock that would have been issuable upon such conversion immediately prior to the occurrence of the Business Combination, the number of shares of FGMC common stock receivable as a result of such Business Combination by a holder of the number of shares of Company common stock for which the Note is convertible immediately prior to such Business Combination. As a condition of the Note all existing outstanding Notes maturing before September 1, 2023 had their term extended to September 1, 2023. In addition, all vested option holders and all warrant holders were provided with a cashless purchase option at time of the Business Combination. The Note is superior to all notes in terms of security except of our Senior Secured Note Payable. In May 2023 all warrant holders with down round provisions provided a waiver to the potential down round triggering event on any conversion issuance. As part of the Merger these notes along with outstanding interest was converted on August 25, 2023 into 876,522 common shares. 12. In June 2023, the Company entered into a twelve (12) month note Convertible Promissory Note (“Note”). The Note is for $77,000 and carries an interest rate of 15% per annum. The principal of the Note is convertible into Common Stock of the Company at a twenty percent discount to the closing price of the Company’s Common Stock on September 1, 2023 or if the business combination between FG Merger Corp. (“FGMC”) and the Company pursuant to the Merger Agreement and Plan of Reorganization by and among FGMC, FG Merger Sub Inc., and the Company dated January 5, 2023, as such agreement may be amended from time to time (the “Business Combination”), occurs then, upon any subsequent conversion of the Note, the holder shall no longer have the right to receive Company common stock upon conversion of the Note, but shall have the right to receive, for each share of Company common stock that would have been issuable upon such conversion immediately prior to the occurrence of the Business Combination, the number of shares of FGMC common stock receivable as a result of such Business Combination by a holder of the number of shares of Company common stock for which the Note is convertible immediately prior to such Business Combination at a twenty percent discount to such exchange ratio. The promissory note is subordinated to the Company’s senior lenders. As part of the Merger these notes along with outstanding interest was converted on August 25, 2023 into 9,138 common shares. 13. In June 2023, the Company entered into a twelve (12) month note Convertible Promissory Note (“Note”). The Note is for $6,000 and carries an interest rate of 15% per annum. The principal of the Note is convertible into Common Stock of the Company at a twenty percent discount to the closing price of the Company’s Common Stock on September 1, 2023 or if the business combination between FG Merger Corp. (“FGMC”) and the Company pursuant to the Merger Agreement and Plan of Reorganization by and among FGMC, FG Merger Sub Inc., and the Company dated January 5, 2023, as such agreement may be amended from time to time (the “Business Combination”), occurs then, upon any subsequent conversion of the Note, the holder shall no longer have the right to receive Company common stock upon conversion of the Note, but shall have the right to receive, for each share of Company common stock that would have been issuable upon such conversion immediately prior to the occurrence of the Business Combination, the number of shares of FGMC common stock receivable as a result of such Business Combination by a holder of the number of shares of Company common stock for which the Note is convertible immediately prior to such Business Combination at a twenty percent discount to such exchange ratio. The promissory note is subordinated to the Company’s senior lenders. As part of the Merger these notes along with outstanding interest was converted on August 25, 2023 into 712 common shares. 14. In June 2023 the Company received an advance on a six (6) month Promissory Note (“Note”) in the amount of $35,000. The Note is for $250,000 with $50,000 paid to the Holder on issuance for net proceeds of $200,000. The Note carries an interest of 15% per annum as interest is payable monthly in arrears with principal due at maturity. There is no penalty for early payoff. If an event of default occurs, the Note along with any outstanding and accrued interest is convertible into the Company’s Common Stock at $7.45 at the sole discretion of the issuer. The promissory note is subordinated to the Company’s senior lenders. 15. In July 2023, the Company entered into a twelve (12) month note Convertible Promissory Note (“Note”). The Note is for $40,000 and carries an interest rate of 15% per annum. The principal of the Note is convertible into Common Stock of the Company at a twenty percent discount to the closing price of the Company’s Common Stock on September 1, 2023 or if the business combination between FG Merger Corp. (“FGMC”) and the Company pursuant to the Merger Agreement and Plan of Reorganization by and among FGMC, FG Merger Sub Inc., and the Company dated January 5, 2023, as such agreement may be amended from time to time (the “Business Combination”), occurs then, upon any subsequent conversion of the Note, the holder shall no longer have the right to receive Company common stock upon conversion of the Note, but shall have the right to receive, for each share of Company common stock that would have been issuable upon such conversion immediately prior to the occurrence of the Business Combination, the number of shares of FGMC common stock receivable as a result of such Business Combination by a holder of the number of shares of Company common stock for which the Note is convertible immediately prior to such Business Combination at a twenty percent discount to such exchange ratio. The promissory note is subordinated to the Company’s senior lenders. As part of the Merger these notes along with outstanding interest was converted on August 25, 2023 into 4,670 common shares. 16. In September 2023 the Company entered into a sixty-day Promissory Note (“Note”) in the amount of $1,200,000. The Note carries an interest of 12% per annum and is subordinated to the Company’s senior lenders. |
COMMON AND PREFERRED STOCK
COMMON AND PREFERRED STOCK | 9 Months Ended |
Sep. 30, 2023 | |
COMMON AND PREFERRED STOCK | |
COMMON AND PREFERRED STOCK | 5. COMMON AND PREFERRED STOCK Common Stock The Company is authorized to issue up to 100,000,000 shares of Company Common Stock, par value $0.0001 per shares. During the nine months ended September 30, 2023 the Company issued 180,966 shares of common stock for cash of $540,000 and 1,392,935 shares of common stock on the conversion of debt. Preferred Stock The Company is authorized to issue up to 40,000,000 shares of Company Series A Preferred Stock, par value $0.0001 per shares. The Preferred Stock have the rights, preferences, powers, privileges and restrictions, qualifications and limitations including but not limited to: • The conversion price (“Conversion Price”) for the Preferred Stock is initially $10.00 per share; provided that the Conversion Price shall be reset to the lesser of $10.00 or 20% above the simple average of the volume weighted average price on the 20 trading days following 12 months after August 25, 2023; provided further that such Conversion Price shall be no greater than $10.00 and no less than $2.00 and subject to appropriate and customary adjustment. • The holders of Preferred Stock shall not be entitled to vote on any matters submitted to the stockholders of the Company. • From and after the date of the issuance of any shares of Preferred Stock, dividends shall accrue at the rate per annum of 12% of the original issue price for each share of Preferred Stock, prior and in preference to any declaration or payment of any other dividend (subject to appropriate adjustments). • Dividends shall accrue from day to day and shall be cumulative and shall be payable within fifteen (15) business days after the end of the Company’s second quarter, which is June 30, commencing with the quarter ending June 30, 2024 to each holder of Preferred Stock as of such date. • From the Closing of the Business Combination until the second anniversary of the date of the original issuance of the Preferred Stock, the Company may, at its option, pay all or part of the accruing dividends on the Preferred Stock by issuing and delivering additional shares of Preferred Stock to the holders thereof. • The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Company, unless the holders of the iCoreConnect Preferred Stock then outstanding shall first receive dividends due and owing on each outstanding share of iCoreConnect Preferred Stock. • In the event of any liquidation, dissolution or winding up of the Company, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount per share equal to the greater of (i) one times the applicable original issue price, plus any accrued and unpaid dividends, and (ii) such amount as would have been payable had all shares of Preferred Stock been converted into the Company’s Common Stock pursuant to the following paragraph immediately prior to such liquidation, dissolution or winding up, before any payment shall be made to the holders of the Company’s Common Stock. • Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of the Company’s Common Stock as is determined by dividing the original issue price by the Conversion Price in effect at the time of conversion, subject to adjustment. • After 24 months from the Closing of the Business Combination, in the event the closing share price of the Company’s Common Stock shall exceed 140% of the Conversion Price (as defined in the Merger Agreement) then in effect, then (i) each outstanding share of Preferred Stock shall automatically be converted into such number of shares of the Company’s Common Stock as is determined by dividing the original issue price by the Conversion Price in effect at the time of conversion and (ii) such shares may not be reissued by the Company, subject to adjustment. At the time of such conversion, the Company shall declare and pay all of the dividends that are accrued and unpaid as of the time of the conversion by either, at the option of the Company, (i) issuing additional Preferred Stock or (ii) paying cash. • Immediately prior to any such optional conversion the Company shall pay all dividends on the Preferred Stock being converted that are accrued and unpaid as of such time by, either, at the option of the Company: (i) issuing additional Preferred Stock or (ii) paying cash. During the nine months ended September 30, 2023 the Company issued 46,500 Series A Preferred stock for $465,000 in cash. During the nine months ended September 30, 2023, 211,040 shares of Series A Preferred stock were converted into shares of Common Stock on a one for one basis. Common Stock Options Certain employees and executives have been granted options or warrants that are compensatory in nature. A summary of option activity for the nine months ended September 30, 2023 are presented below: Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance Outstanding - January 1, 2023 1,080,265 $ 3.79 8.8 $ - Granted 10,675 $ 3.65 9.7 - Exercised as part of merger (310,881 ) 1.07 0.0 - Forfeited (168 ) $ 4.48 5.0 - Balance Outstanding – September 30, 2023 779,891 $ 3.66 3.9 $ - Exercisable – September 30, 2023 32,172 $ 3.82 8.0 $ - Nonvested Options Number of Options Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested - January 1, 2023 769,216 $ 3.58 8.8 Granted 10,675 $ 3.65 9.7 Vested (32,172 ) 3.82 8.8 Forfeited - - - Nonvested – September 30, 2023 747,719 $ 3.66 8.9 Restricted Common Stock Compensation On December 31, 2022, the Company’s Board of Directors approved the grant of 8,378 shares of common stock to each of the Directors of the Company, for services rendered during 2021 and 2022, all of which vested on December 31, 2022. Compensation expense related to this grant for the year 2022 was $122,375 based upon fair value of our common stock of $2.66 per share. The Company’s Board of Directors also approved the granting of shares of common stock for employee performance related to 2021 performance with a fair value of $160,645. The Board also approved on January 3, 2023 134,049 shares of common stock related to the Chief Executive Officer for bonus related to 2022 service with a fair value of $356,000. On March 13, 2023 the Company’s Board of Directors approved the grant of 5,027 shares of common stock to certain board members for services related to 2018 service. In April 2023, the Company’s Board of Directors approved the grant of 81,267 shares of common stock for employee performance related to 2022 performance with a fair value of $312,761. In April 2023, the Company’s Board of Directors approved compensation for its Board Members and Committee Members for the year ended December 31, 2023. On an annual basis equivalent, Board Members are compensated $60,000, with additional compensation of $10,000 for being a Committee Member and an additional $10,000 for being a Chair of a Committee. Compensation is to be paid quarterly in arrears at the closing stock price of the last trading day of the quarter. The Company has recorded an expense of $289,167 as of September 30, 2023 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. In May 2023, the Company entered into amendments with certain warrant holders whose warrants contained down round provisions and modified these warrants to remove such provisions from inception. As such the number and exercise of these warrants are set back to their original values as originally intended by the parties. During the nine months ending September 30, 2023, the Company issued no Common Stock Warrants. During the nine months ending September 30, 2022, the Company issued 11,729 Common Stock Warrants. In addition the Company purchased 1,278 common stock warrants issued to a lender in 2019 as part of a Note Payable that had been fully satisfied in 2020. These warrants include anti-dilutive provisions and as such resulted in an additional 28,883 of warrants that were to be issued at a strike price of $0.05. The Company purchased these warrants at their restated strike price for $45,000. As part of the Merger, all outstanding warrants were converted on a cashless basis into shares of common stock. As of September 30, 2023, the number of shares issuable upon exercise of the Common Stock Warrants were nil shares. Common Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 1,184,635 $ 2.98 3.45 $ 803,522 Granted - - - - Exercised (368,381 ) 6.86 3.15 - Cancelled (816,254 ) $ 2.98 3.45 - Outstanding – September 30, 2023 - $ - - $ - Preferred Stock Warrants As part of the Merger, the Company assumed the following preferred stock warrants: $2.00 Preferred Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 - - - - Granted 600,000 2.00 6.0 - Exercised - - - - Expired - - - - Outstanding – September 30, 2023 600,000 $ 2.00 5.9 $ - During the period there was a modification of the $2.00 warrant agreements which were issued in conjunction with the merger and classified as a derivate liability in the amount of $1,987,460. In September the warrants were modified and as a result are no longer considered a derivative liability and classified as equity. $11.50 Preferred Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 10,058,938 $ 11.50 10 - Granted 63,375 11.50 10 - Exercised - - - - Expired - - - - Outstanding – September 30, 2023 10,122,313 $ 11.50 9.9 $ - $15.00 Preferred Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 1,000,000 $ 15.00 10 - Granted - - - - Exercised - - - - Expired - - - - Outstanding – September 30, 2023 1,000,000 $ 15.00 9.9 $ - Equity Line of Credit In January 2021 the Old iCore and one of its Convertible Debt Holders entered into a Purchase Agreement for up to $5,000,000 shares of the Company’s common stock for 24 months. The purchase price of the stock will be at 75% of the lowest individual daily weight average price of the past five (5) trading days with the amount to be drawn down as the lesser of $250,000 or 300% of the average shares traded for the ten (10) days prior to the Closing Request Date with a minimum $25,000 put allowance. As part of the agreement, the Company issued 8,378 shares of common stock as a commitment fee. In January 2022 the Company exercised this equity line of credit of an aggregate amount of $350,000 in exchange for 5,360 shares of common stock. The balance available as of December 31, 2022, to draw on the equity line of credit after the draw was $4,650,000. This line expired in January 2023. On September 12, 2023, the Company entered into a purchase agreement (the “Purchase Agreement”) with Arena Business Solutions Global SPC II, Ltd. on behalf of and for the account of Segregated Portfolio #8 – SPC #8 (“Arena”), pursuant to which Arena has committed to purchase up to $40 million (the “Commitment Amount”) of our common stock, par value $0.0001 per share (the “Common Stock”), at our direction from time to time, subject to the satisfaction of the conditions in the Purchase Agreement. Such sales of Common Stock are subject to certain limitations, and may occur from time to time at the Company’s sole discretion over the approximately 36-month period commencing on the date of the Purchase Agreement subject to registration with the Securities and Exchange Commission. The Company may direct Arena to purchase amounts of its Common Stock under the Purchase Agreement that the Company specifies from time to time in a written notice (an “Advance Notice”) delivered to Arena on any trading day up to the Commitment Amount. The maximum amount that the Company may specify in any one Advance Notice is equal to the following: (A) if the Advance Notice is received by 8:30 A.M. Eastern time, then the maximum amount that the Company may specify is equal to the lesser of (i) an amount equal to 40% of the average Daily Value Traded of the Common Stock of the ten trading days immediately preceding such Advance Notice, or (ii) $20.0 million; and (B) if the Advance Notice is received after 8:30 A.M. Eastern Time but prior to 10:30 A.M. Eastern Time, then the maximum amount that the Company may specify in an Advance Notice is equal to the lesser of: (i) an amount equal to 30% of the average Daily Value Traded of the Common Stock on the ten trading days immediately preceding such Advance Notice, or (ii) $15.0 million. For these purposes, “Daily Value Traded” is the product obtained by multiplying the daily trading volume of the Company’s Common Stock on Nasdaq during regular trading hours, as reported by Bloomberg L.P., by the VWAP (as defined in the Purchase Agreement) for that trading day. Subject to the satisfaction of the conditions under the Purchase Agreement, the Company deliver Advance Notices from time to time, provided that the Pricing Period for all prior advances has been completed. For these purposes, “Pricing Period” means one trading day, as notified by the Company to Arena in the applicable Advance Notice, commencing on the date of the Advance Notice. The purchase price of the shares of Common Stock will be equal to 97% of the simple average of the daily VWAP of the Common Stock during the Pricing Period. Unless earlier terminated as provided in the Purchase Agreement, the Purchase Agreement will terminate automatically on the earliest to occur of: (i) the first day of the month next following the 36-month anniversary of the date of the Purchase Agreement; and (ii) the date on which Arena shall have purchased shares of Common Stock under the Purchase Agreement for an aggregate gross purchase price equal to Commitment Amount under the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty, upon five trading days’ prior written notice to Arena, provided that there are no outstanding Advance Notices the shares of Common Stock under which have not yet been issued. The Company and Arena may also terminate the Purchase Agreement at any time by mutual written consent. As consideration for Arena’s irrevocable commitment to purchase Common Stock upon the terms of and subject to satisfaction of the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, the Company agreed to issue a total of 291,259 shares of Common Stock equaling $600,000 (the “Commitment Fee Shares”) based on a price per share equal to the simple average daily VWAP of the Common Stock during the ten trading days immediately preceding the date on which the SEC declares the Registration Statement effective. As of September 30, 2023 the Company’s registration statement with the Securities and Exchange Commission had not yet been filed and therefore no amounts had been utilized of the purchase agreement. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS The following table sets forth the changes in the carrying amount of goodwill for the nine months ended September 30, 2023 and year ended December 2022: Total Balance at December 31, 2022 $ 1,484,966 2023 Acquisitions - Balance at September 30, 2023 $ 1,484,966 The following table sets forth the gross carrying amounts and accumulated amortization of the Company’s intangible assets as of September 30, 2023 and December 31, 2022: Gross Carrying Amount Impairment Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Capitalized software $ 3,014,490 $ - $ (2,483,429 ) $ 531,061 Customer relationships 3,713,434 - (1,363,054 ) 2,350,380 Acquired technology 1,527,186 - (1,447,758 ) 79,428 Total definite-lived intangible assets at December 31, 2022 8,255,110 - (5,294,241 ) 2,960,869 Capitalized software 3,522,086 - (2,742,361 ) 779,725 Customer relationships 5,272,579 - (1,928,660 ) 3,343,919 Acquired technology 1,527,186 - (1,510,403 ) 16,783 Total definite-lived intangible assets at September 30, 2023 $ 10,321,851 (6,181,424 ) 4,140,427 In September 2023, the Company purchased customer relationships in the amount of $1,559,145. Amortization expense of intangible assets was $317,251 and $280,815 for the three months ended September 30, 2023 and 2022, respectively and $887,183 and $983,934 for the nine months ended September 30, 2023 and 2022, respectively. The Company’s amortization is based on no residual value using the straight-line amortization method as it best represents the benefit of the intangible assets. |
FORWARD PURCHASE AGREEMENT
FORWARD PURCHASE AGREEMENT | 9 Months Ended |
Sep. 30, 2023 | |
FORWARD PURCHASE AGREEMENT | |
FORWARD PURCHASE AGREEMENT | 7. FORWARD PURCHASE AGREEMENT On August 14, 2023, the Company entered into Prepaid Forward Purchase Agreement (the “FPA”) with Old iCore and RiverNorth SPAC Arbitrage Fund, L.P., a Delaware limited partnership (the “Purchaser”). In accordance with the FPA and subject to the terms and conditions set forth therein, the Purchaser purchased the lesser of (a) 1.5 million shares of FGMC Common Stock and (b) such number of shares of FGMC Common Stock as shall, following the Business Combination, not exceed 9.9% of the total number of shares of FGMC Common Stock to be outstanding (such shares to be purchased, the “Forward Purchase Shares”) from public shareholders for a price no greater than the redemption price per share as is indicated in FGMC’s most recently filed periodic report (the “Prepaid Forward Purchase Price”). In accordance with the terms of the Business Combination, upon the consummation of the Business Combination, each Forward Purchase Share automatically converted into one share of Preferred Stock (including the shares of the Company’s Common Stock underlying the Preferred Stock, the “Purchased Shares”). Upon the Business Combination closing, 100,000 Purchased Shares were deemed to be “Commitment Shares” and the remaining Purchased Shares were deemed to be “Prepaid Forward Purchase Shares”. Upon the closing of the Business Combination FGMC caused Purchaser to be paid directly out of the funds held in FGMC’s trust account, a cash amount (the “Prepayment Amount”) equal to the number of Purchased Shares multiplied by the amount paid to redeeming stockholders in connection with the Business Combination (the “Redemption Price”). The Redemption Price was $[10.69]. Upon the sale of the Prepaid Forward Purchase Shares (or underlying FGMC Common Stock) by the Purchaser, the Purchaser will remit the Reference Price (as defined below) per share to FGMC. On the earlier to occur of: · the occurrence of a “Registration Failure” (as defined in the FPA), and · the date that is twelve months after the closing of the Business Combination (the “Maturity Date”), then, for any Common Stock underlying the Prepaid Forward Purchase Shares not sold by the Purchaser, the Purchaser shall, on the 25th trading day after the Maturity Date (the “Payment Date”), pay the Company an amount equal to (i) the number of Prepaid Forward Purchase Shares that the Purchaser held on the Maturity Date, multiplied by (ii) the lowest daily volume weighted average price per share of FGMC Common Stock during the twenty trading days beginning on the day after the Maturity Date less $0.15. Between the Maturity Date and the Payment Date, the Purchaser may not sell more than a number of Prepaid Forward Purchase Shares per day equal to the greater of (i) 5% of the Purchased Shares owned by the Purchaser at the Maturity Date and (ii) 10% of the daily trading volume on such date. The Purchaser has agreed that until the Maturity Date, the Common Stock underlying the Prepaid Forward Purchase Shares may not be sold for a price less than the Reference Price. The “Reference Price” will initially equal the Redemption Price and will be reduced (but never increased) each month commencing on the first day of the month starting 30 days after the Business Combination closing to the volume weighted average price of the FGMC Common Stock for the preceding 10 trading days, but in no event less than $10.00 per share (the “Floor”) unless in the Company’s sole discretion, the Floor is lowered. Any reduction of the Floor shall be accomplished through a written notice from the Company to Purchaser. The FPA provides for certain registration rights. In particular, FGMC is required to, within 30 calendar days following written request by Purchaser, file with the SEC a registration statement registering the resale of all shares held by Purchaser and have such registration statement declared effective as soon as practicable after the filing thereof. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES (A) LEASE COMMITMENTS 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. On September 10, 2021, an additional seven-month extension was signed extending the lease term to May 30, 2022. On September 22, 2021, the Company signed a six year and one month lease agreement for approximately 7,650 square feet for its new headquarters commencing on January 1, 2022, located in Ocoee, Florida. The lease provides for a five-year renewal term at the option of the Company In April 2023, the Company entered into a lease agreement with its existing landlord of its Florida location for a lease of an additional 2,295 square feet of space beginning at the earlier of June 1, 2023 or completion of build out for a five year term. 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. In August 2023, the Company extended its lease for another year on similar terms and conditions as its current lease. With the acquisition of Advantech, the Company signed a two-year lease on May 12, 2021, for an office in Scottsdale, AZ. In May 2023, the Company extended its lease for an additional 24 months for this location beginning July 1, 2023 under similar terms and conditions as its current lease. As of September 30, 2022, undiscounted future lease obligations for the office spaces are as follows: Lease Commitments as of 09/30/2023 Less than 1 year 1-3 years 3-5 years Total $ 378,313 $ 1,053,728 $ 180,342 $ 1,612,383 Lease costs for the nine months ended September 30, 2023 were $271,725 and cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2023 were $250,803. As of September 30, 2023, the following represents the difference between the remaining undiscounted lease commitments under non-cancelable leases and the lease liabilities: Undiscounted minimum lease commitments $ 1,612,383 Present value adjustment using incremental borrowing rate (366,962 ) Lease liabilities $ 1,245,421 (B) LITIGATION On February 21, 2023, the Company received a notice under section 21 of Indian Arbitration and Conciliation Act, 1996 related to a dispute pursuant to a contract between the Company and a service provider, pursuant to which the service provider has asserted the Company has violated the terms of the contract and has claimed damages of approximately $635,000. The Company is evaluating the claims asserted against it and intends to defend itself vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts. The outcome of this matter is not expected to have a material effect on these financial statements. The Company fully satisfied its obligations in the amount of $523,415 related to the final arbitration issued in February 2023 (C) GUARANTEE In May 2023, Old iCore agreed to guarantee the repayment of up to $400,000 in non-interest-bearing unsecured notes of FG Merger Corp. in the event that the merger between FG Merger Corp and Old iCore did not get completed by September 1, 2023. This guarantee was extinguished on August 25, 2023. In August 2023, the Company agreed to a Satisfaction Agreement in conjunction with the conversion of debt in the amount of $1,500,000 to be done at the time of merger. The Satisfaction Agreement provides that the Company would provide the equity holder cash proceeds on the difference between the proceeds from the sale of stock and the face value of debt up to $1,500,000 subject to certain selling limitations on or before August 2024. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 9 Months Ended |
Sep. 30, 2023 | |
CONCENTRATION OF CREDIT RISK | |
CONCENTRATION OF CREDIT RISK | 9. CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and trade accounts receivables. The Company places its cash with high-credit-quality financial institutions. At times, such cash may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limit of $250,000 per depositor. As a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company has not experienced any losses due to these excess deposits and believes the risk is not significant. With respect to trade receivables, management routinely assesses the financial strength of its customers and, as a consequence, believes that the receivable credit risk exposure is limited. 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 has no significant customers (greater than 10% of total revenue) in its six-month 2023 revenue. The Company has accounts receivable concentration with three customers in 2022 representing 59% of total accounts receivables outstanding as of September 30, 2023, and one customer that represented 31% of accounts receivable outstanding as of December 31, 2022. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 10. 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 type were as follows: For the Three Months Ended September 30 2023 % 2022 % % Change Revenue: Subscription software and services $ 1,837,030 92 % $ 1,677,373 89 % 10 % Professional services and other 167,823 8 % 211,395 11 % (21 %) Total revenue $ 2,004,853 100 % $ 1,888,768 100 % 6 % For the Nine Months Ended September 30 2023 % 2022 % % Change Revenue: Subscription software and services $ 5,170,844 91 % $ 5,348,465 90 % (3 %) Professional services and other 530,528 9 % 595,353 10 % (11 %) Total revenue $ 5,701,372 100 % $ 5,943,818 100 % (4 %) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 11. RELATED PARTY TRANSACTIONS The Company incurred related party transactions of $357,844 for the nine months ended September 30, 2023, and $407,309 for the nine months ended September, 2022, in relation to payments of interest and principal on Notes Payable with its Chief Executive Officer. These notes were fully repaid in February 2022 and March 2023 respectively. In July 2023 the Company entered into a $250,000 Promissory Note from a related party to the Chief Executive Officer. This promissory note bears interest of 15% per annum and is due monthly with the principal due at maturity. Net proceeds from the Note will be $200,000 with $50,000 paid to the issuer on closing. Accrued but unpaid interest as of September 30, 2023 was $8,333. In June 2022 the Company entered into a $100,000 promissory note with its Chief Operating Officer. The promissory note has a maturity date of six (6) months after issuance with an interest charge of 14% per annum which shall accrue and be paid on the maturity date. This note was extended to September 1, 2023. The Company has the right to prepay this note without penalty. Accrued but unpaid interest as of June, 2023, was $16,293. In June 2023 the Chief Operating Officer entered into an additional Promissory Note maturing September 1,2023 in the amount of $145,010 bearing 18% per annum with interest and principal due at Maturity. The Company has the right to prepay this note without penalty. Accrued but unpaid interest as of September 30, 2023 was $15,216. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2023 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | 12. BUSINESS COMBINATIONS The Company accounts for business combinations under the acquisition method of accounting, in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations Preferred Dental Development, LLC (“Preferred Dental”) On September 1, 2023, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Preferred Dental Development, LLC (the “Seller”). The Seller was engaged in the business of providing dental billing and claims services. Pursuant to the Agreement, the Company purchased the assets of the Seller utilized in the Seller’s business. As consideration for the acquired assets: (i) the Company issued a note to the Seller in the amount of $1,200,000, and (ii) the Company agreed to issue to Seller $400,000 worth of shares of Company common stock at $10.00 per share totaling 40,000 shares. Pursuant to the guidance in FASB Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, the Company calculated the estimated fair value of the acquired customer relationships using the discounted cash flow approach. The key assumptions and inputs into the cash flow model used were: (1) an annual customer attrition rate of 5%, (2) a gross margin percentage of 37%, (3) a tax rate of 25.50% and (4) a discount rate of 12%. Certain fair values of acquired assets and assumed liabilities may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they may be adjusted retrospectively in subsequent periods within the measurement period when it reflects new information obtained about facts and circumstances that were in existence at the acquisition date. The measurement period cannot exceed one year from the acquisition date. The following table summarizes the consideration paid and the fair value of the assets acquired and liabilities assumed as of the dates detailed in the table: Preferred Dental Consideration Paid: September 1, 2023 Note payable $ 1,200,000 Common stock 400,000 $ 1,600,000 Fair values of identifiable assets acquired and liabilities assumed: Assets acquired: Cash $ 40,855 Customer relationships 1,559,145 Total assets acquired $ 1,600,000 Net assets acquired $ 1,600,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS On October 13, 2023, the Company entered into a promissory note with an issue date of October 13, 2023 (the “October 13 Promissory Note”) with an accredited investor in exchange for $350,000. The maturity of the October 13 Promissory Note is May 13, 2024 and carries an interest rate of 12% per annum and is initially convertible into Company common stock at a conversion rate of $1.85 per share. In conjunction with the October 13 Promissory Note, the Company also issued a five-year warrant to purchase 24,500 shares of Company common stock with an exercise price of $2.04. On October 26, 2023, the Company entered into a securities purchase agreement with a former officer of the Company, pursuant to which the Company issued the investor a promissory note in principal amount of $200,000 (the “October 26 Promissory Note”) in exchange for $200,000. The maturity of the October 26 Promissory Note is December 31, 2023 and carries an interest rate of 12% per annum. In conjunction with the issuance of the October 26 Promissory Note, the Company also issued the investor a five-year warrant to purchase 14,000 shares of Company common stock with an exercise price of $2.15 per share, which was 120% of the closing price of the Company’s common stock on the date of issuance. On October 26, 2023, the Company entered into an additional securities purchase agreement with the same investor, pursuant to which the Company issued the investor a convertible promissory note in principal amount of $94,685.91 (the “Convertible Promissory Note”) in exchange for $94,685.91. The maturity of the Convertible Promissory Note is October 26, 2028 and carries an interest rate of 12% per annum and is initially convertible into Company common stock at a conversion rate of $1.80 per share, which was the closing price of the Company’s common stock on the date of issuance. In conjunction with the Convertible Promissory Note, the Company also issued the investor 6,629 shares of Company common stock and a five-year warrant to purchase 6,629 shares of Company common stock with an exercise price of $2.15 per share, which was 120% of the closing price of the Company’s common stock on the date of issuance. On October 31, 2023, the Company entered into a securities purchase agreement with an investor, pursuant to which the Company issued the investor a convertible promissory note in principal amount of $500,000 (the “Additional Convertible Promissory Note”) in exchange for $500,000. The maturity of the Additional Convertible Promissory Note is October 31, 2024 and carries an interest rate of 12% per annum and is initially convertible into Company common stock at a conversion rate equal to 120% of the closing price of the Company’s common stock on the date of issuance. In October 2023, the Company issued 291,259 shares of Common Stock valued at $600,000 to Arena as part of its commitment shares per its Purchase Agreement. In addition, the Company put 205,865 shares of Common Stock to Arena for cash proceeds of $315,709. On October 19, 2023 the Company was notified by its equity holder party to the Satisfaction Guarantee that they had sold 115,559 shares of common stock related to $1,000,000 worth of its original debt for proceeds of $526,257 after fees and was notifying that Company of its obligation to make whole the $474,742 as per the terms of the agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Annual Report on Form 10-K/A as filed with the SEC on June 16, 2023 by Old iCore and the Form 8-K filed by the Company on August 31, 2023. The interim results for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. |
Accounts Receivable and Allowance For Doubtful Accounts | Accounts receivable are customer obligations due under normal trade terms. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the potential inability of certain customers to make required future payments on amounts due. 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 the Company’s 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 customers improves and collections of amounts outstanding commence or are reasonably assured, then the Company may reverse previously established allowances for doubtful accounts. The Company has estimated and recorded an allowance for doubtful accounts of approximately $80,905 at September 30, 2023 and $65,000 December 31, 2022. |
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. The Company has determined that technological feasibility for its 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. |
Long-Lived Assets and Goodwill | The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets The Company accounts for goodwill and intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment |
Revenue Recognition | We have 6 primary sources of revenue 1. Electronic Prescription Software 2. Insurance Verifications 3. ICD-10 Medical Coding Software 4. Encrypted and HIPAA Compliant Secure email 5. Analytics 6. MsaaS software 1) Electronic Prescription software services are provided on an annual subscription basis using the software as a service (‘SaaS’) model with revenue recognized ratably over the contract term. 2). Insurance verification services are provided on an annual subscription basis using SaaS model with revenue recognized ratably over the contract term. 3) ICD-10 Medical Coding services are provided on an annual subscription basis using the software as a SaaS model with revenues recognized ratably over the contract term. 4) Encrypted and HIPAA compliant and secure email services are provided on an annual subscription basis using the SaaS model with revenues recognized ratably over the contract term. 5) Analytics automatically compiles real-time KPI data on an intuitive dashboard which saves time and helps focus the team during the morning huddle. Additionally, the Practice Metrics page provides custom reporting with rich graphics helping management to view revenue, claims, AR, scheduling and more. 6) MSaaS software services are provided on an annual subscription basis using the software as a service (‘SaaS’) model with revenue recognized ratably over the contract term. The Company accounts for revenue from contracts with customers in accordance with ASU No. 2017-09, Revenue from Contracts with Customers and a series of related accounting standard updates (collectively referred to as “Topic 606”). This guidance sets forth a five-step revenue recognition model which replaced the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance and to require more detailed disclosures. The five steps of the revenue recognition model are: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, the Company assesses the goods and services promised in the contract with customers and identifies a performance obligation for each. To determine the performance obligation, the Company considers all products and services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. The timing of satisfaction of the performance obligation is not subject to significant judgment. The Company measures revenue as the amount of consideration expected to be received in exchange for transferring goods and services. Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities. The Company’s customers are acquired through its own salesforce and through the referrals from its many state association marketing partners. The Company primarily generates revenue from multiple software as a service (SaaS) offerings, which typically include subscriptions to its 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. Approximately 90% of the Company’s revenue is subscription based with the remainder being professional services and other IT related revenue. The geographic concentration of the Company’s revenue is 100% in North America. Management has determined that it has the following performance obligations related to its products and services: multiple SaaS offerings, which typically include subscriptions to our online software solutions. Revenue from Software as a Service, hardware, service repairs, and support & maintenance are all recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract, or services is completed. 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. Substantially 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. For contracts with customers that contain multiple performance obligations, the Company accounts for the promised performance obligations separately as individual performance obligations if they are distinct. In determining whether performance obligations meet the criteria for being distinct, the Company considers several factors, including the degree of interrelation and interdependence between obligations and whether or not the good or service significantly modifies or transforms another good or service in the contract. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company generally determines the standalone selling prices based on the prices charged to customers. Judgment may be used to determine the standalone selling prices for items that are not sold separately, including taking into consideration either historical pricing practices or an adjusted market assessment. Unsatisfied and partially unsatisfied performance obligations as of the end of the reporting period primarily consist of products and services for which customer purchase orders have been accepted and that are in the process of being delivered. Transaction price is calculated as the selling price less any variable consideration, consisting of rebates and discounts. Discounts provided to customers are known at contract inception. Rebates are calculated on the “expected value” method where the Company (1) estimates the probability of each rebate amount which could be earned by the distributor, (2) multiplies each estimated amount by its assigned probability factor, and (3) calculates a final sum of each of the probability-weighted amounts calculated in step (2). The sum calculated in step (3) is the rebate amount, which along with discounts reduces the amount of revenue recognized. The Company has elected to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost rather than as an additional promised service. As a result, the Company accrues the costs of shipping and handling when the related revenue is recognized. Costs incurred for shipping and handling are included in costs of goods sold on the Consolidated Statements of Operations. Amounts billed to a customer for shipping and handling are reported as revenue on the Consolidated Statements of Operations. |
Advertising Costs | Advertising costs are reported in selling, general and administrative expenses and include advertising, marketing and promotional programs and are charged as expenses in the year in which they are incurred. Advertising costs were $129,204 and $93,657 for the three months ended September 30, 2023 and 2022 and $435,672 and $357,350 for the nine months ended September 30, 2023 and 2022, respectively. |
Accounting for Derivative Instruments | The Company accounts for derivative instruments in accordance with ASC 815 “Derivatives and Hedging”, 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. |
Financial Instruments With Down Round Features | The Company follows the guidance of FASB ASU 2017-11, “Earnings per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); and Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. ASU 2017-11 simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downround adjustment of the current exercise price based on the price of the future equity offerings. The standard requires companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for the purposes of determining liability of equity classification. Companies that provide earning per share (“EPS”) data will adjust their diluted EPS calculation for the effect of the feature when triggered (i.e. when the exercise price of the related equity-linked financial instrument is adjusted downward because of the down round feature) and will also recognize the effect of the trigger within equity. |
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 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 accounts for share-based compensation costs in accordance with ASC 718, Compensation – Stock Compensation. ASC 718 requires companies to measure the cost of awards of equity instruments, including stock options and restricted stock awards, based on the grant-date fair value of the award and to recognize it as compensation expense over the employee’s requisite service period or the non-employee’s vesting period. An employee’s requisite service period is the period of time over which an employee must provide service in exchange for an award under a share-based payment arrangement and generally is presumed to be the vesting period. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in additional paid in capital, 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. 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. |
Beneficial Conversion Features and Warrants | The Company evaluates the conversion feature of convertible debt instruments to determine whether the conversion feature was beneficial as described in ASC 470-30, Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital. The Company calculates the fair value of warrants with the convertible instruments using the Black-Scholes valuation model. Under these guidelines, the Company first allocates the value of the proceeds received from a convertible debt transaction between the convertible debt instrument and any other detachable instruments included in the transaction (such as warrants) on a relative fair value basis. A BCF is then measured as the intrinsic value of the conversion option at the commitment date, representing the difference between the effective conversion price and the Company’s stock price on the commitment date multiplied by the number of shares into which the debt instrument is convertible. The allocated value of the BCF and warrants are recorded as a debt discount and accreted over the expected term of the convertible debt as interest expense. If the intrinsic value of the BCF is greater than the proceeds allocated to the convertible debt instrument, the amount of the discount assigned to the BCF is limited to the amount of the proceeds allocated to the convertible debt instrument. |
Leases | The Company adopted ASU No. 2016-02, Leases and a series of related Accounting Standards Updates that followed (collectively referred to as “Topic 842”). Topic 842 requires organizations to recognize right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. The FASB retained the distinction between finance leases and operating leases, leaving the effect of leases in the statement of comprehensive income and the statement of cash flows largely unchanged from previous U.S. GAAP. The Company utilized the transition method allowed under ASU 2018-11 in which an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if any. The Company determines, at contract inception, whether or not an arrangement contains a lease and evaluates the contract for classification as an operating or finance lease. For all leases, ROU assets and lease liabilities are recognized based on the present value of lease payments, including annual rent increases, over the lease term at commencement date. If the Company’s lease does not provide an implicit rate in the contract, the Company uses its incremental, secured borrowing rate based on lease term information available as of the adoption date or lease commencement date in determining the present value of lease payments. Any renewal periods are considered in the analysis of each lease to the extent that the Company considers them to be reasonably certain of being exercised. |
Related Party Transactions | The Company accounts for related party transactions in accordance with FASB ASC 850, Related Party Disclosures |
Reportable Segments | U.S. GAAP establishes standards for reporting financial and descriptive information about a company’s reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The chief operating decision maker is the Company’s Chief Executive Officer, who currently reviews the financial performance and the results of operations of the Company’s operating subsidiaries on a consolidated basis when making decisions about allocating resources and assessing performance of the Company. Accordingly, the Company currently considers itself to be in a single reporting segment for reporting purposes focused on the North American market. |
Allowance for Credit Losses | On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected. The Company completed its assessment on the adoption date of the new standard and did not adjust the opening balance of retained earnings relating to its trade receivables. The Company writes off receivables once it is determined that they are no longer collectible, as local laws allow. |
Recently Issued Accounting Pronouncements | The Company does not believe that any issued, but not yet effective accounting standards, if currently adopted, will have a material effect on the Company’s financial position, results of operations and cash flows. |
BUSINESS COMBINATION AND RECA_2
BUSINESS COMBINATION AND RECAPITALIZATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
BUSINESS COMBINATION AND RECAPITALIZATION | |
Schedule of consummation of the Business Combination | Common Stock Preferred Stock Common stock of FGMC outstanding prior to business combination 8,050,000 - Less: Redemptions of FGMC common stock (6,460,059 ) - Common stock held by former FGMC shareholders 1,589,941 - FGMC sponsor shares 1,692,374 - Underwriter shares 40,250 - Sponsor shares transferred for services 2,000 - Sponsor shares transferred for non-redemption 373,126 - Shares issued related to extension note 84,500 - Total FGMC common shares outstanding prior to conversion to preferred stock 3,782,191 - Conversion of existing FGMC common stockholders to new preferred stock (3,782,191 ) 3,782,191 Shares issued to Old iCore stockholders for purchase consideration 8,095,706 - Total 8,095,706 3,782,191 |
Schedule of reconcile of statement of changes in stockholder's equity | Amount Cash - FGMC trust (net of redemptions) $ 17,002,897 Cash transferred to Forward Purchase Agreement (12,569,810 ) Gross proceeds 4,433,087 Less: FGMC and Old iCore transaction costs paid (4,433,087 ) Effect of Business Combination, net of redemptions and transaction costs $ - |
Schedule of warrants were converted into Preferred Stock warrants | Holder Number of Warrants Strike Price Underwriter 600,000 $ 2.00 Sponsor and Investors 10,122,313 $ 11.50 Sponsor 1,000,000 $ 15.00 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
NOTES PAYABLE | |
Schedule of Notes Payable | September 30, December 31, 2023 2022 (1) Convertible Note bearing interest at 12% due May, 2023 - 578,802 (2) Note bearing interest at 18% due September 1, 2023 - 1,012,500 (2) Note bearing interest at 18% due September 1, 2023 - 506,250 (3) Note bearing interest at 18% due October 1, 2028 30,074 32,752 (4) Secured Promissory Note bearing interest at 17.5% due February 28, 2026 1,962,990 1,960,965 (5) Promissory Note bearing interest at 14%, due January 15, 2023 - 50,892 (6) Promissory Note bearing interest at 14%, due September 1, 2023 - 329,227 (7) Related Party Promissory Note bearing interest at 14% due September 1, 2023 70,035 108,778 (8) Promissory Note bearing interest at 15%, due January 25, 2023 - 506,370 (9) Promissory Note bearing interest at 15%, due September 1, 2023 - 253,184 (9) Promissory Note bearing interest at 15%, due September 1, 2023 - 253,184 (10) Related Party Promissory Notes bearing interest at 18%, due March 31, 2023 - 135,888 (11) Convertible Note bearing interest at 15% due March 2024 - - (7) Related Party Promissory Note bearing interest at 18%, due September 1, 2023 213,970 - (12) Convertible Note bearing interest at 15% due June 14, 2024 - - (13) Convertible Note bearing interest at 15% due June 14, 2024 - - (14) Related Party Convertible Promissory Note bearing interest at 15% due June 30, 2024 206,523 - (15) Convertible Note bearing interest at 15% due July 24, 2024 - - (16) Promissory Note bearing interest at 12%, due October 31, 2023 1,211,836 3,695,428 5,728,792 Less current maturities (3,695,428 ) (4,279,531 ) Total Long-Term Debt $ - $ 1,449,261 |
COMMON AND PREFERRED STOCK (Tab
COMMON AND PREFERRED STOCK (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
COMMON AND PREFERRED STOCK | |
Summary of Stock Option Activity | Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance Outstanding - January 1, 2023 1,080,265 $ 3.79 8.8 $ - Granted 10,675 $ 3.65 9.7 - Exercised as part of merger (310,881 ) 1.07 0.0 - Forfeited (168 ) $ 4.48 5.0 - Balance Outstanding – September 30, 2023 779,891 $ 3.66 3.9 $ - Exercisable – September 30, 2023 32,172 $ 3.82 8.0 $ - Nonvested Options Number of Options Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested - January 1, 2023 769,216 $ 3.58 8.8 Granted 10,675 $ 3.65 9.7 Vested (32,172 ) 3.82 8.8 Forfeited - - - Nonvested – September 30, 2023 747,719 $ 3.66 8.9 |
Schedule of warrants outstanding | Common Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 1,184,635 $ 2.98 3.45 $ 803,522 Granted - - - - Exercised (368,381 ) 6.86 3.15 - Cancelled (816,254 ) $ 2.98 3.45 - Outstanding – September 30, 2023 - $ - - $ - $2.00 Preferred Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 - - - - Granted 600,000 2.00 6.0 - Exercised - - - - Expired - - - - Outstanding – September 30, 2023 600,000 $ 2.00 5.9 $ - $11.50 Preferred Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 10,058,938 $ 11.50 10 - Granted 63,375 11.50 10 - Exercised - - - - Expired - - - - Outstanding – September 30, 2023 10,122,313 $ 11.50 9.9 $ - $15.00 Preferred Stock Warrants Outstanding Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 1,000,000 $ 15.00 10 - Granted - - - - Exercised - - - - Expired - - - - Outstanding – September 30, 2023 1,000,000 $ 15.00 9.9 $ - |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of Goodwill | Total Balance at December 31, 2022 $ 1,484,966 2023 Acquisitions - Balance at September 30, 2023 $ 1,484,966 |
Schedule of carrying amounts and accumulated amortization | Gross Carrying Amount Impairment Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Capitalized software $ 3,014,490 $ - $ (2,483,429 ) $ 531,061 Customer relationships 3,713,434 - (1,363,054 ) 2,350,380 Acquired technology 1,527,186 - (1,447,758 ) 79,428 Total definite-lived intangible assets at December 31, 2022 8,255,110 - (5,294,241 ) 2,960,869 Capitalized software 3,522,086 - (2,742,361 ) 779,725 Customer relationships 5,272,579 - (1,928,660 ) 3,343,919 Acquired technology 1,527,186 - (1,510,403 ) 16,783 Total definite-lived intangible assets at September 30, 2023 $ 10,321,851 (6,181,424 ) 4,140,427 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of undiscounted future lease obligations | Lease Commitments as of 09/30/2023 Less than 1 year 1-3 years 3-5 years Total $ 378,313 $ 1,053,728 $ 180,342 $ 1,612,383 |
Schedule of Undiscounted minimum lease commitments | Undiscounted minimum lease commitments $ 1,612,383 Present value adjustment using incremental borrowing rate (366,962 ) Lease liabilities $ 1,245,421 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
SEGMENT INFORMATION | |
Revenue Segment | For the Three Months Ended September 30 2023 % 2022 % % Change Revenue: Subscription software and services $ 1,837,030 92 % $ 1,677,373 89 % 10 % Professional services and other 167,823 8 % 211,395 11 % (21 %) Total revenue $ 2,004,853 100 % $ 1,888,768 100 % 6 % For the Nine Months Ended September 30 2023 % 2022 % % Change Revenue: Subscription software and services $ 5,170,844 91 % $ 5,348,465 90 % (3 %) Professional services and other 530,528 9 % 595,353 10 % (11 %) Total revenue $ 5,701,372 100 % $ 5,943,818 100 % (4 %) |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS COMBINATIONS | |
Schedule of fair value of the assets acquired and liabilities | Preferred Dental Consideration Paid: September 1, 2023 Note payable $ 1,200,000 Common stock 400,000 $ 1,600,000 Fair values of identifiable assets acquired and liabilities assumed: Assets acquired: Cash $ 40,855 Customer relationships 1,559,145 Total assets acquired $ 1,600,000 Net assets acquired $ 1,600,000 |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
NATURE OF OPERATIONS | ||
Working Capital Deficit | $ (6,979,236) | |
Loss from operations | (5,882,750) | |
Accumulated deficit | $ (107,425,049) | $ (82,861,960) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Allowance for doubtful accounts | $ 80,905 | $ 80,905 | $ 65,000 | ||
Advertising Costs | $ 129,204 | $ 93,657 | $ 435,672 | $ 357,350 |
BUSINESS COMBINATION AND RECA_3
BUSINESS COMBINATION AND RECAPITALIZATION (Details) - shares | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Common stock of FGMC outstanding prior to business combination shares | 8,373,132 | 6,076,078 | |
Common Stock issued | 8,373,132 | 6,076,078 | 11,729 |
Preferred Stock issued | 3,617,651 | 0 | |
Common Share [Member] | |||
Common stock of FGMC outstanding prior to business combination shares | 8,050,000 | ||
Less: Redemptions of FGMC common stock | (6,460,059) | ||
Common stock held by former FGMC shareholders | 1,589,941 | ||
FGMC sponsor shares | 1,692,374 | ||
Underwriter shares | 40,250 | ||
Sponsor shares transferred for services | 2,000 | ||
Sponsor shares transferred for non-redemption | 373,126 | ||
Shares issued related to extension note | 84,500 | ||
Total FGMC common shares outstanding prior to conversion to preferred stock | 3,782,191 | ||
Conversion of existing FGMC common stockholders to new preferred stock | (3,782,191) | ||
Shares issued to Old iCore stockholders for purchase consideration | 8,095,706 | ||
Common Stock issued | 8,095,706 | ||
Preferred Share [Member] | |||
Common stock of FGMC outstanding prior to business combination shares | 0 | ||
Less: Redemptions of FGMC common stock | 0 | ||
Common stock held by former FGMC shareholders | 0 | ||
FGMC sponsor shares | 0 | ||
Underwriter shares | 0 | ||
Sponsor shares transferred for services | 0 | ||
Sponsor shares transferred for non-redemption | 0 | ||
Shares issued related to extension note | 0 | ||
Total FGMC common shares outstanding prior to conversion to preferred stock | 3,782,191 | ||
Conversion of existing FGMC common stockholders to new preferred stock | 0 | ||
Preferred Stock issued | 3,782,191 |
BUSINESS COMBINATION AND RECA_4
BUSINESS COMBINATION AND RECAPITALIZATION (Details 1) | Sep. 30, 2023 USD ($) |
BUSINESS COMBINATION AND RECAPITALIZATION | |
Cash - FGMC trust (net of redemptions) | $ 17,002,897 |
Cash transferred to Forward Purchase Agreement | (12,569,810) |
Gross proceeds | 4,433,087 |
Less: FGMC and Old iCore transaction costs paid | (4,433,087) |
Effect of Business Combination, net of redemptions and transaction costs | $ 0 |
BUSINESS COMBINATION AND RECA_5
BUSINESS COMBINATION AND RECAPITALIZATION (Details 2) | Sep. 30, 2023 $ / shares shares |
Underwriter [Member] | |
Number of Warrants | shares | 600,000 |
Strike Price | $ / shares | $ 2 |
Sponsor [Member] | |
Number of Warrants | shares | 1,000,000 |
Strike Price | $ / shares | $ 15 |
Sponsor And Investors Member [Member] | |
Number of Warrants | shares | 10,122,313 |
Strike Price | $ / shares | $ 11.50 |
NOTES PAYABLE (Details )
NOTES PAYABLE (Details ) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Total Long-term debt, gross | $ 3,695,428 | $ 5,728,792 |
Current maturities of long-term debt, net of | (3,695,428) | (4,279,531) |
Long-term debt, net of current maturities | 0 | 1,449,261 |
Secured Promissory Note Payable Six[Member] | ||
Total Long-term debt, gross | $ 0 | 0 |
Interest rate | 15% | |
Due date | Jun. 14, 2024 | |
Related Party Promissory Note Four [Member] | ||
Total Long-term debt, gross | $ 206,523 | 0 |
Interest rate | 15% | |
Due date | Jun. 30, 2024 | |
Promissory Note Five [Member] | ||
Total Long-term debt, gross | $ 1,211,836 | |
Interest rate | 12% | |
Due date | Oct. 31, 2023 | |
Promissory Note [Member] | ||
Total Long-term debt, gross | $ 0 | 50,892 |
Interest rate | 14% | |
Due date | Jan. 15, 2023 | |
Promissory Note One[Member] | ||
Total Long-term debt, gross | $ 0 | 329,227 |
Interest rate | 14% | |
Due date | Sep. 01, 2023 | |
Related Party Promissory Note One[Member] | ||
Total Long-term debt, gross | $ 70,035 | 108,778 |
Interest rate | 14% | |
Due date | Sep. 01, 2023 | |
Promissory Note Two[Member] | ||
Total Long-term debt, gross | $ 0 | 506,370 |
Interest rate | 15% | |
Due date | Jan. 25, 2023 | |
Promissory Note Three [Member] | ||
Total Long-term debt, gross | $ 0 | 253,184 |
Interest rate | 15% | |
Due date | Sep. 01, 2023 | |
Promissory Note Four [Member] | ||
Total Long-term debt, gross | $ 0 | 253,184 |
Interest rate | 15% | |
Due date | Sep. 01, 2023 | |
Related Party Promissory Note Two [Member] | ||
Total Long-term debt, gross | $ 0 | 135,888 |
Interest rate | 18% | |
Due date | Mar. 31, 2023 | |
Convertible Notes Payable [Member] | ||
Total Long-term debt, gross | $ 0 | 0 |
Interest rate | 15% | |
Due date1 | March 2024 | |
Related Party Promissory Note Three [Member] | ||
Total Long-term debt, gross | $ 213,970 | 0 |
Interest rate | 18% | |
Due date | Sep. 01, 2023 | |
Convertible Notes Payable 2 Member | ||
Total Long-term debt, gross | $ 0 | 0 |
Interest rate | 15% | |
Due date | Jun. 14, 2024 | |
Convertible Notes Payable Seven Member | ||
Total Long-term debt, gross | $ 0 | 0 |
Interest rate | 15% | |
Due date | Jul. 24, 2024 | |
Convertible Notes Payable One [Member] | ||
Total Long-term debt, gross | $ 0 | 578,802 |
Interest rate | 12% | |
Due date1 | May, 2023 | |
Notes Payable Two [Member] | ||
Total Long-term debt, gross | $ 0 | 1,012,500 |
Interest rate | 18% | |
Due date | Sep. 01, 2023 | |
Notes Payable Three [Member] | ||
Total Long-term debt, gross | $ 0 | 506,250 |
Interest rate | 18% | |
Due date | Sep. 01, 2023 | |
Notes Payable Four [Member] | ||
Total Long-term debt, gross | $ 30,074 | 32,752 |
Interest rate | 18% | |
Due date | Oct. 01, 2028 | |
Secured Promissory Note Payable Five [Member] | ||
Total Long-term debt, gross | $ 1,962,990 | $ 1,960,965 |
Interest rate | 17.50% | |
Due date | Feb. 28, 2026 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||
Mar. 31, 2023 | Dec. 31, 2022 | Jul. 31, 2022 | Jun. 30, 2022 | Apr. 30, 2022 | Feb. 28, 2022 | Nov. 30, 2021 | Aug. 31, 2021 | Apr. 30, 2021 | Sep. 30, 2023 | Aug. 25, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | Aug. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | May 31, 2023 | |
Exercisable price | $ 0.25 | |||||||||||||||||||
Proceed from convertible promissory notes | $ (5,747,497) | $ (22,387) | ||||||||||||||||||
Conversion in common shares | 876,522 | |||||||||||||||||||
Interest Rate | 12% | 15% | ||||||||||||||||||
Maturity date | 6 years | |||||||||||||||||||
Proceed from advance | $ 1,200,000 | $ 35,000 | ||||||||||||||||||
Payments Of Principal And Interest | $ 370,852 | $ 14,888 | $ 792,930 | $ 400,888 | ||||||||||||||||
Promissory Note, Description | The Note is for $250,000 with $50,000 paid to the Holder on issuance for net proceeds of $200,000 | |||||||||||||||||||
One [Member] | ||||||||||||||||||||
Outstanding warrants | 1,300,000 | |||||||||||||||||||
Exercisable price | $ 0.25 | |||||||||||||||||||
Proceed from convertible promissory notes | $ 77,000 | |||||||||||||||||||
Conversion in common shares | 9,138 | |||||||||||||||||||
Interest Rate | 15% | |||||||||||||||||||
Two [Member] | ||||||||||||||||||||
Outstanding warrants | 1,300,000 | |||||||||||||||||||
Exercisable price | $ 0.20 | |||||||||||||||||||
Proceed from convertible promissory notes | $ 6,000 | |||||||||||||||||||
Conversion in common shares | 712 | |||||||||||||||||||
Interest Rate | 15% | |||||||||||||||||||
Three [Member] | ||||||||||||||||||||
Proceed from convertible promissory notes | $ 40,000 | |||||||||||||||||||
Conversion in common shares | 4,670 | |||||||||||||||||||
Interest Rate | 15% | |||||||||||||||||||
Convertible Promissory Note [Member] | ||||||||||||||||||||
Convertible Promissory Note | $ 1,000,000 | $ 500,000 | ||||||||||||||||||
Conversion in common shares | 173,339 | |||||||||||||||||||
Exchange Received | $ 500,000 | |||||||||||||||||||
Interest Rate | 15% | 12% | ||||||||||||||||||
Common Stock at fixed conversion price | $ 0.10 | |||||||||||||||||||
Common Stock Conversion Percentage | 4.99% | |||||||||||||||||||
Restricted Shares, Issued | 1,000,000 | 788,000 | ||||||||||||||||||
Warrant Issued | 1,462,500 | 1,500,000 | 2,600,000 | 2,250,000 | ||||||||||||||||
Common Stock Term | 5 years | |||||||||||||||||||
Exercise price, per share | $ 0.08 | $ 0.20 | ||||||||||||||||||
Exercise price one | $ 0.25 | $ 0.25 | $ 0.10 | |||||||||||||||||
First Warrant Shares | 1,300,000 | |||||||||||||||||||
Other Warrant Shares | 1,300,000 | |||||||||||||||||||
Description of Maturity renegotiated | At Maturity this note was renegotiated and term extended to June 2023 for an additional principal consideration of $55,400 under the same interest rate and conditions as the matured note. This note and accrued interest was converted in January 2023 for 6,037,883 shares of Common Stock | |||||||||||||||||||
Convertible Promissory Note one | $ 500,000 | |||||||||||||||||||
Warrant Term | 5 years | |||||||||||||||||||
Finance Agreement Payment | $ 40,071 | |||||||||||||||||||
Maturity date | 60 years | |||||||||||||||||||
Payments Of Principal And Interest | $ 791 | |||||||||||||||||||
Total Warrant Shares | 7,312,500 | 3,750,000 | ||||||||||||||||||
Convertible Promissory Note [Member] | August 2021 [Member] | ||||||||||||||||||||
Warrant Issued | 3,250,000 | |||||||||||||||||||
Exercise price, per share | $ 0.10 | |||||||||||||||||||
Total Warrant Shares | 5,850,000 | |||||||||||||||||||
Convertible Promissory Note [Member] | December 2022 [Member] | ||||||||||||||||||||
Outstanding warrants | 1,500,000 | |||||||||||||||||||
Warrant Issued | 937,500 | |||||||||||||||||||
Exercise price, per share | $ 0.10 | |||||||||||||||||||
Total Warrant Shares | 4,687,500 | |||||||||||||||||||
Convertible Promissory Note [Member] | Unsecured Debt 1 [Member] | ||||||||||||||||||||
Convertible Promissory Note | $ 50,000 | |||||||||||||||||||
Exchange Received | $ 55,000 | |||||||||||||||||||
Interest Rate | 15% | 14% | ||||||||||||||||||
Maturity date | 6 months | |||||||||||||||||||
Convertible Promissory Note [Member] | Unsecured Debt 2 [Member] | ||||||||||||||||||||
Convertible Promissory Note | $ 300,000 | |||||||||||||||||||
Conversion in common shares | 41,104 | |||||||||||||||||||
Exchange Received | $ 80,000 | |||||||||||||||||||
Interest Rate | 15% | 14% | ||||||||||||||||||
Maturity date | 6 months | |||||||||||||||||||
Convertible Promissory Note [Member] | Unsecured Debt [Member] | ||||||||||||||||||||
Convertible Promissory Note | $ 500,000 | $ 100,000 | $ 145,010 | $ 250,000 | ||||||||||||||||
Conversion in common shares | 57,780 | |||||||||||||||||||
Interest Rate | 14% | 14% | 18% | 14% | ||||||||||||||||
Warrant Issued | 23,625 | 175,000 | 18,813 | 175,000 | ||||||||||||||||
Common Stock Term | 5 years | 5 years | 5 years | 5 years | ||||||||||||||||
Exercise price, per share | $ 0.20 | $ 0.25 | $ 0.25 | $ 0.25 | ||||||||||||||||
Exercise price one | $ 0.25 | $ 0.20 | $ 0.20 | $ 0.20 | ||||||||||||||||
First Warrant Shares | 11,813 | 87,500 | 9,407 | 87,500 | ||||||||||||||||
Other Warrant Shares | 11,812 | 87,500 | 9,406 | 87,500 | ||||||||||||||||
Maturity date | 6 months | 6 months | 6 months | |||||||||||||||||
Maturity date of debt | Sep. 01, 2023 | |||||||||||||||||||
Conversion rate | $ 0.08 | |||||||||||||||||||
Stock issued for conversion of debt | 1,019,315 | |||||||||||||||||||
Convertible Secured Promissory Note, Description | The Note is for $2,500,000 with $500,000 paid to the Holder on issuance for net proceeds of $2,000,000. The Note carries and interest of 15% per annum which can be paid in cash or kind and it is convertible either into the Company’s Common Stock after six months from date of issuance at $0.10 per share | |||||||||||||||||||
Secured Promissory Note Payable [Member] | ||||||||||||||||||||
Convertible Promissory Note | $ 2,000,000 | |||||||||||||||||||
Debt obligation | $ 1,962,990 | |||||||||||||||||||
Exchange Received | $ 1,970,000 | |||||||||||||||||||
Interest Rate | 17.50% | |||||||||||||||||||
Maintaining Minimum Cash Balance | $ 150,000 |
COMMON AND PREFERRED STOCK (Det
COMMON AND PREFERRED STOCK (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Options Outstanding | |
Number of Options/Warrants Outstanding, Beginning | shares | 1,080,265 |
Number of Options granted | shares | 10,675 |
Number of Options Exercised as part of merger | shares | (310,881) |
Number of Options Forfeited | shares | (168) |
Number of Options/Warrants Outstanding, Ending | shares | 779,891 |
Number of Options Outstanding, Exercisable Ending | shares | 32,172 |
Weighted Average Exercise Price, Beginning | $ 3.79 |
Weighted Average Exercise Price, Granted | 3.65 |
Weighted Average Exercise Price, Exercised | 1.07 |
Weighted Average Exercise Price, Forfeited | 4.48 |
Weighted Average Exercise Price, Ending | 3.66 |
Weighted Average Exercise Price, Exercisable | $ 3.82 |
Weighted Average Remaining Contractual Term in Years, granted | 9 years 8 months 12 days |
Weighted Average Remaining Contractual Term in Years, Beginning | 8 years 9 months 18 days |
Weighted Average Remaining Contractual Term in Years, Exercised as part of merger | 0 years |
Weighted Average Remaining Contractual Term in Years, Forfeited | 5 years |
Weighted Average Remaining Contractual Term in Years, Ending | 3 years 10 months 24 days |
Weighted Average Remaining Contractual Term in Years, Exercisable Ending | 8 years |
Nonvested Options | |
Number of Options Nonvested, Beginning | shares | 769,216 |
Number of Options Nonvested, Vested | shares | (32,172) |
Number of Options Nonvested, Granted | shares | 10,675 |
Number of Options Nonvested, Ending | shares | 747,719 |
Weighted Average grant date Fair Value Nonvested, Beginning | $ 3.58 |
Weighted Average grant date Fair Value Nonvested, Vested | 3.82 |
Weighted Average grant date Fair Value Nonvested, Granted | 3.65 |
Weighted Average grant date Fair Value Nonvested, Forfeited | 0 |
Weighted Average grant date Fair Value Nonvested, Ending | $ 3.66 |
Weighted Average Remaining Years to vest Nonvested, Beginning | 8 years 9 months 18 days |
Weighted Average Remaining Years to vest Nonvested, Vested | 8 years 9 months 18 days |
Weighted Average Remaining Years to vest Nonvested, Granted | 9 years 8 months 12 days |
Weighted Average Remaining Years to vest Nonvested, Ending | 8 years 10 months 24 days |
COMMON AND PREFERRED STOCK (D_2
COMMON AND PREFERRED STOCK (Details 1) | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
COMMON AND PREFERRED STOCK | |
Number of Warrants Outstanding, Beginning | shares | 1,184,635 |
Number of Warrants,Exercised | shares | (368,381) |
Number of Warrants, Cancelled | shares | (816,254) |
Weighted Average Exercise Price of Warrants, Beginning | $ 2.98 |
Weighted Average Exercise Price of Warrants, Exercised | 6.86 |
Weighted Average Exercise Price of Warrants, Cancelled | 2.98 |
Weighted Average Exercise Price of Warrants, Granted | 0 |
Weighted Average Exercise Price of Warrants, Ending | $ 0 |
Weighted Average Remaining Life of Warrants in Years,Exercised | 3 years 1 month 24 days |
Weighted Average Remaining Life of Warrants in Years, Cancelled | 3 years 5 months 12 days |
Weighted Average Remaining Life of Warrants in Years, Beginning | 3 years 5 months 12 days |
Aggregate Intrinsic Value of Warrants, Beginning | $ | $ 803,522 |
Aggregate Intrinsic Value of Warrants, Ending | $ | $ 0 |
COMMON AND PREFERRED STOCK (D_3
COMMON AND PREFERRED STOCK (Details 2) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
COMMON AND PREFERRED STOCK | |
OneNumber of Warrants, granted | shares | 600,000 |
OneNumber of Warrants,Exercised | shares | 0 |
One Number of Warrants, Expired | shares | 0 |
One Number of Warrants Outstanding, Ending | shares | 600,000 |
One Weighted Average Exercise Price of Warrants, Beginning | $ 0 |
One Weighted Average Exercise Price of Warrants, Granted | 2 |
One Weighted Average Exercise Price of Warrants, Exercised | 0 |
One Weighted Average Exercise Price of Warrants, expired | 2 |
One Weighted Average Exercise Price of Warrants, Ending | $ 0 |
One Weighted Average Remaining Life of Warrants in Years, Beginning | 6 years |
One Weighted Average Remaining Life of Warrants in Years, Ending | 5 years 10 months 24 days |
COMMON AND PREFERRED STOCK (D_4
COMMON AND PREFERRED STOCK (Details 3) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
COMMON AND PREFERRED STOCK | |
Two Preferred Stock Warrants Outstanding, Beginning | shares | 10,058,938 |
Two Number of Warrants, granted | shares | 63,375 |
Two Number of Warrants Outstanding, Ending | shares | 10,122,313 |
Two Weighted Average Exercise Price of Warrants, Beginning | $ 11.50 |
Two Weighted Average Exercise Price of Warrants, Granted | 11.50 |
Two Weighted Average Exercise Price of Warrants, Exercised | 0 |
Two Weighted Average Exercise Price of Warrants, expired | 0 |
Two Weighted Average Exercise Price of Warrants, Ending | $ 11.50 |
One Weighted Average Remaining Life of Warrants in Years, Beginning | 10 years |
One Weighted Average Remaining Life of Warrants in Years, granted | 10 years |
One Weighted Average Remaining Life of Warrants in Years, Ending | 9 years 10 months 24 days |
COMMON AND PREFERRED STOCK (D_5
COMMON AND PREFERRED STOCK (Details 4) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
COMMON AND PREFERRED STOCK | |
Three Preferred Stock Warrants Outstanding, Beginning | shares | 1,000,000 |
Three Number of Warrants Outstanding, Ending | shares | 1,000,000 |
Three Weighted Average Exercise Price of Warrants, Beginning | $ 15 |
Three Weighted Average Exercise Price of Warrants, Granted | 0 |
Three Weighted Average Exercise Price of Warrants, Exercised | 0 |
Three Weighted Average Exercise Price of Warrants, expired | 0 |
Three Weighted Average Exercise Price of Warrants, Ending | $ 15 |
Three Weighted Average Remaining Life of Warrants in Years, Beginning | 10 years |
Three Weighted Average Remaining Life of Warrants in Years, Ending | 9 years 10 months 24 days |
COMMON AND PREFERRED STOCK (D_6
COMMON AND PREFERRED STOCK (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 12, 2023 | Apr. 30, 2023 | Jan. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 13, 2023 | Jan. 03, 2023 | Jan. 31, 2021 | |
Common Stock Shares authorized | 100,000,000 | 100,000,000 | ||||||||
Common Stock, par value | $ 0.0001 | $ 0.0001 | ||||||||
Preferred Stock Shares authorized | 40,000,000 | 40,000,000 | ||||||||
Preferred Stock Shares issued | 3,617,651 | 0 | ||||||||
Common Stock Shares issued | 8,373,132 | 11,729 | 6,076,078 | |||||||
Purchase of Common stock | 291,259 | |||||||||
Advance to party | $ 15,000,000 | |||||||||
Purchase of Common stock value | $ 45,000 | $ 600,000 | ||||||||
Restricted Stock Compensation | 289,167 | |||||||||
Purchase of Common stock warrants | 1,278 | |||||||||
Additional warrants to be issued | 28,883 | |||||||||
Restated strike price | $ 45,000 | |||||||||
Strike price | $ 0.05 | |||||||||
Common Stock Shares Issued For Cash, Value | 540,000 | |||||||||
Shares of common stock on the conversion of debt | 1,392,935 | |||||||||
Warrant Agreement [Member] | ||||||||||
Derivate liability | $ 1,987,460 | |||||||||
Modification of warrant price | $ 2 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Preferred Stock Shares authorized | 40,000,000 | |||||||||
Preferred Stock Shares per value | $ 0.0001 | |||||||||
Conversion Price | $ 10 | |||||||||
Accrued Intrest rate | 12% | |||||||||
Preferred Stock Shares issued | 46,500 | |||||||||
Common Stock Shares Issued For Cash, Shares | 465,000 | |||||||||
Shares of common stock on the conversion of debt | 211,040 | |||||||||
Chief Executive Officer [Member] | ||||||||||
Restricted Shares Of Common Stock Issued For Bonus, Shares | 134,049 | |||||||||
Arena Business Solutions Global SPC II [Member] | ||||||||||
Common Stock, par value | $ 0.0001 | |||||||||
Purchase of Common stock | 40,000,000 | |||||||||
Advance to party | $ 20,000,000 | |||||||||
Board Of Directors [Member] | ||||||||||
Common stock shares issued related to employee performance, shares | 81,267 | |||||||||
Common stock shares issued related to employee performance, value | $ 312,761 | |||||||||
Committee [Member] | ||||||||||
Additional compensation | 10,000 | |||||||||
Chair of a Committee [Member] | ||||||||||
Additional compensation | 10,000 | |||||||||
Restricted Stock Compensation [Member] | ||||||||||
Restricted common stock issued for service, shares | 2,425,000 | 8,378 | ||||||||
Compensation | $ 60,000 | |||||||||
Restricted common stock issued for srvice, value | $ 122,375 | |||||||||
Price per share | $ 2.66 | |||||||||
Restricted shares of common stock issued for bonus, value | $ 160,645 | |||||||||
Restricted Stock Compensation [Member] | 2020 Service [Member] | Chief Executive Officers [Member] | ||||||||||
Restricted shares of common stock issued for bonus, value | 356,000 | |||||||||
Restricted Shares Of Common Stock Issued For Bonus, Shares | 5,027 | |||||||||
Equity Lineof Credit [Member] | January Two Thousand Twenty One [Member] | ||||||||||
Common Stock Shares issued | 11,729 | 8,378 | ||||||||
Common Stock Shares | 5,360 | 5,000,000 | ||||||||
Purchase Price, Description | The purchase price of the stock will be at 75% of the lowest individual daily weight average price of the past five (5) trading days with the amount to be drawn down as the lesser of $250,000 or 300% of the average shares traded for the ten (10) days prior to the Closing Request Date with a minimum $25,000 put allowance | |||||||||
Equity Line Of Credit Of Aggregate Amount | $ 350,000 | |||||||||
Balance available | $ 4,650,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Balance, beginning | $ 1,484,966 |
2023 Acquisitions | 0 |
Balance, ending | $ 1,484,966 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Gross carrying amount | $ 10,321,851 | $ 8,255,110 |
Impairment | 0 | 0 |
Accumulated amortization | (6,181,424) | (5,294,241) |
Net carrying amount | 4,140,427 | 2,960,869 |
Capitalized Software [Member] | ||
Gross carrying amount | 3,522,086 | 3,014,490 |
Impairment | 0 | 0 |
Accumulated amortization | (2,742,361) | (2,483,429) |
Net carrying amount | 779,725 | 531,061 |
Customer Relationships [Member] | ||
Gross carrying amount | 5,272,579 | 3,713,434 |
Impairment | 0 | 0 |
Accumulated amortization | (1,928,660) | (1,363,054) |
Net carrying amount | 3,343,919 | 2,350,380 |
Acquired Technology [Member] | ||
Gross carrying amount | 1,527,186 | 1,527,186 |
Impairment | 0 | 0 |
Accumulated amortization | (1,510,403) | (1,447,758) |
Net carrying amount | $ 16,783 | $ 79,428 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Amortization expense of intangible assets | $ 317,251 | $ 280,815 | $ 887,183 | $ 983,934 | |
Customer Relationships [Member] | |||||
Purchased amount | $ 1,559,145 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2023 USD ($) |
Lease Commitments | $ 1,612,383 |
Less Than 1 Year [Member] | |
Lease Commitments | 378,313 |
1-3 years [Member] | |
Lease Commitments | 1,053,728 |
3-5 years [Member] | |
Lease Commitments | $ 180,342 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) - Lease [Member] | Sep. 30, 2023 USD ($) |
Undiscounted Minimum Lease Commitments | $ 1,612,383 |
Present Value Adjustment Using Incremental Borrowing Rate | (366,962) |
Lease Liabilities | $ 1,245,421 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Aug. 31, 2023 | May 31, 2023 | Feb. 28, 2023 | Feb. 21, 2023 | Nov. 15, 2017 | Sep. 30, 2023 | |
Litigation obligations | $ 523,415 | |||||
Repayment guarantee | $ 400,000 | |||||
Conversion of debt amount | $ 1,500,000 | |||||
Cash proceeds | $ 1,500,000 | |||||
Lease [Member] | ||||||
Lease Agreement Description | the Company signed a three-year lease agreement for approximately 4,100 square feet of office space located in Winter Garden | |||||
Lease Costs | $ 271,725 | |||||
Cash Paid Measurement Of Lease Liabilities | $ 250,803 | |||||
Settlement Agreement [Member] | ||||||
Claimed charge of damages | $ 635,000 | |||||
Lease Agreement [Member] | November 15, 2017 [Member] | ||||||
Term Of Lease Agreement | An amendment to this lease was signed on October 26, 2020 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fdic Insured Limit | $ 250,000 | |
Revenue Benchmark [Member] | No Customers [Member] | ||
Concentration Risk, Percentage | 10% | |
Accounts Receivable [Member] | Three Customers [Member] | ||
Concentration Risk, Percentage | 59% | |
Accounts Receivable [Member] | One Customers [Member] | ||
Concentration Risk, Percentage | 31% |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Total [Member] | ||||
Total Revenue | $ 2,004,853 | $ 1,888,768 | $ 5,701,372 | $ 5,943,818 |
Revenues: | ||||
Revenue, Percentage | 100% | 100% | 100% | 100% |
Total percent | 6% | (4.00%) | ||
Revenue Segment [Member] | ||||
Revenues: | ||||
Subscription Software And Services, Percentage Change | 10% | (3.00%) | ||
Professional Services And Other, Percentage Changes | (21.00%) | (11.00%) | ||
Subscription Software And Services | $ 1,837,030 | $ 1,677,373 | $ 5,170,844 | $ 5,348,465 |
Subscription Software And Services, Percentage | 92% | 89% | 91% | 90% |
Professional Services And Other | $ 167,823 | $ 211,395 | $ 530,528 | $ 595,353 |
Professional Services And Other, Percentage | 8% | 11% | 9% | 10% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Principal and interest payments for note payable | $ 357,844 | $ 407,309 | |||||
Interest Rate | 12% | 15% | |||||
Accrued unpaid interest | $ 15,216 | $ 15,216 | |||||
Net proceeds | $ 1,500,000 | ||||||
Chief Executive Officer [Member] | |||||||
Promissory note | $ 250,000 | $ 100,000 | |||||
Interest Rate | 15% | 14% | 18% | ||||
Additional promissory note | $ 145,010 | ||||||
Accrued unpaid interest | $ 8,333 | $ 16,293 | 8,333 | ||||
Net proceeds | 200,000 | ||||||
Payable to the issuer | $ 50,000 | ||||||
Maturity date | Sep. 01, 2023 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) | Sep. 30, 2023 USD ($) |
Cash | $ 40,855 |
Customer relationships | 1,559,145 |
Total assets acquired | 1,600,000 |
Net assets acquired | 1,600,000 |
Total Consideration paid | 1,600,000 |
Common Share [Member] | |
Total Consideration paid | 400,000 |
Notes Payable [Member] | |
Total Consideration paid | $ 1,200,000 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Narrative) | 9 Months Ended |
Sep. 30, 2023 | |
BUSINESS COMBINATIONS | |
Description of note issued to the Seller | (i) the Company issued a note to the Seller in the amount of $1,200,000, and (ii) the Company agreed to issue to Seller $400,000 worth of shares of Company common stock at $10.00 per share totaling 40,000 shares |
Customer attrition rate | 5% |
Percentage OF gross margin | 37% |
Tax rate | 25.50% |
Discount rate | 12% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||||
Oct. 13, 2023 | Oct. 31, 2023 | Oct. 26, 2023 | Oct. 19, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Interest Rate | 12% | 15% | ||||||||
Common stock value | $ 838 | $ 838 | $ 608 | |||||||
Common Stock Shares issued | 8,373,132 | 8,373,132 | 11,729 | 6,076,078 | ||||||
Proceeds from issuance of common stock | $ 540,000 | $ 350,000 | ||||||||
Original debt amount | $ 1,500,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Conversion rate | $ 1.85 | |||||||||
Exercise price | $ 2.04 | |||||||||
Interest Rate | 12% | |||||||||
Common stock value | $ 600,000 | |||||||||
Common Stock Shares issued | 291,259 | |||||||||
Common stock shares new issued | 205,865 | 115,559 | ||||||||
Proceeds from issuance of common stock | $ 315,709 | $ 526,257 | ||||||||
Original debt amount | 1,000,000 | |||||||||
Obligation amount | $ 474,742 | |||||||||
Convertible promissory note | $ 350,000 | |||||||||
Warrant to purchase issued | 24,500 | |||||||||
Maturity date | May 13, 2024 | |||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | ||||||||||
Promissory note issued | $ 200,000 | |||||||||
Exercise price | $ 2.15 | |||||||||
Interest Rate | 12% | |||||||||
Convertible promissory note | $ 200,000 | |||||||||
Warrant to purchase issued | 14,000 | |||||||||
Maturity date | Dec. 31, 2023 | |||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | October 26, 2023 [Member] | ||||||||||
Conversion rate | $ 1.80 | |||||||||
Promissory note issued | $ 94,685 | |||||||||
Exercise price | $ 2.15 | |||||||||
Interest Rate | 12% | |||||||||
Convertible promissory note | $ 94,685 | |||||||||
Warrant to purchase issued | 6,629 | |||||||||
Maturity date | Oct. 26, 2028 | |||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | October 31, 2023 [Member] | ||||||||||
Promissory note issued | $ 500,000 | |||||||||
Interest Rate | 12% | |||||||||
Convertible promissory note | $ 500,000 | |||||||||
Maturity date | Oct. 31, 2024 |