EX-99.2 11 icct_ex992.htm UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION icct_ex992.htm

EXHIBIT 99.2

 

iCoreConnect Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

 

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

unaudited

 

 

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

Pro Forma

 

 

 

(unaudited)

 

 

 

 

 

 

 

Condensed

 

 

 

FGMC

 (Historical)

 

 

iCore

 (Historical)

 

 

Closing Adjustments

 

 

 

 

Combined

at Closing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 $ -

 

 

 $ 3,697

 

 

 $ -

 

 

 

 

 $ 3,697

 

Cost of Sales

 

 

 -

 

 

 

 975

 

 

 

 -

 

 

 

 

 

 975

 

Gross Profit

 

 

 -

 

 

 

 2,722

 

 

 

 -

 

 

 

 

 

 2,722

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

 1,617

 

 

 

 5,600

 

 

 

 (1,617 )

 

 M

 

 

 5,600

 

Depreciation and amortization

 

 

 -

 

 

 

 581

 

 

 

 -

 

 

 

 

 

 581

 

Total operating expenses

 

 

 1,617

 

 

 

 6,181

 

 

 

 (1,617 )

 

 

 

 

 6,181

 

Loss from operations

 

 

 (1,617 )

 

 

 (3,459 )

 

 

 1,617

 

 

 

 

 

 (3,459 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 -

 

 

 

 (529 )

 

 

 -

 

 

 

 

 

 (529 )

Finance charges

 

 

 -

 

 

 

 (422 )

 

 

 -

 

 

 

 

 

 (422 )

Other income (expense)

 

 

 1,890

 

 

 

 14

 

 

 

 1,890

 

 

 N

 

 

 3,794

 

FV change of the FPA

 

 

 

 

 

 

 

 

 

 

 (4,192 )

 

 K

 

 

 (4,192 )

Total other income (expense), net

 

 

 1,890

 

 

 

 (937 )

 

 

 (2,302 )

 

 

 

 

 (1,349 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TAXES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

 400

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 400

 

Total tax expense

 

 

 400

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

NET LOSS

 

 

 (127 )

 

 

 (4,396 )

 

 

 (685 )

 

 

 

 

 (5,208 )

 

 
1

 

 

iCoreConnect Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2023

 

 

 

 

 

unaudited

 

 

 

(unaudited)

 

 

Transaction

 

 

 

Pro Forma

 

 

 

FGMC

(Historical)

 

 

iCore

(Historical)

 

 

Accounting Adjustments

 

 

 

Condensed Combined

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 $ 6.0

 

 

 $ 69

 

 

 

 4,433

 

 

A,H

 

 

 613

 

 

 

 

 

 

 

 

 

 

 

 

 12,570

 

 

B,H

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (12,570 )

 

B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (3,895 )

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

 -

 

 

 

 366

 

 

 

 -

 

 

 

 

 

 366

 

Prepaid expenses and other assets

 

 

 128

 

 

 

 685

 

 

 

 -

 

 

 

 

 

 813

 

Total current assets

 

 

 134

 

 

 

 1,120

 

 

 

 538

 

 

 

 

 

 1,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities held in trust account

 

 

 85,748

 

 

 

 -

 

 

 

 (85,748 )

 

C

 

 

 -

 

prepaid forward contract derivative

 

 

 

 

 

 

 

 

 

 

 12,570

 

 

B

 

 

 8,378

 

 

 

 

 

 

 

 

 

 

 

 

 (4,192 )

 

K

 

 

 

 

LONG TERM ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment - net

 

 

 -

 

 

 

 200

 

 

 

 -

 

 

 

 

 

 200

 

Right of use lease asset - operating

 

 

 -

 

 

 

 853

 

 

 

 -

 

 

 

 

 

 853

 

Software development costs, net

 

 

 -

 

 

 

 722

 

 

 

 -

 

 

 

 

 

 722

 

Acquired technology, net

 

 

 -

 

 

 

 38

 

 

 

 -

 

 

 

 

 

 38

 

Customer relationships, net

 

 

 

 

 

 

 1,990

 

 

 

 -

 

 

 

 

 

 1,990

 

Goodwill

 

 

 

 

 

 

 1,484

 

 

 

 -

 

 

 

 

 

 1,484

 

Total long term assets

 

 

 -

 

 

 

 5,287

 

 

 

 -

 

 

 

 

 

 5,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

 

 85,882

 

 

 

 6,407

 

 

 

 (76,832 )

 

 

 

 

 15,457

 

 

 
2

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

 1,198

 

 

 

 2,746

 

 

 

 (1,198 )

 

D

 

 

 2,746

 

Operating lease liability, current portion

 

 

 -

 

 

 

 136

 

 

 

 -

 

 

 

 

 

 136

 

Notes payable, current portion

 

 

 845

 

 

 

 5,664

 

 

 

 (5,097 )

 

G

 

 

 567

 

 

 

 

 

 

 

 

 

 

 

 

 (845 )

 

F

 

 

 

 

Deferred revenue

 

 

 -

 

 

 

 88

 

 

 

 -

 

 

 

 

 

 88

 

Tax liabilities

 

 

 211

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 211

 

Total current liabilities

 

 

 2,254

 

 

 

 8,634

 

 

 

 (7,140 )

 

 

 

 

 3,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities

 

 

 -

 

 

 

 1,245

 

 

 

 -

 

 

 

 

 

 1,245

 

Operating lease liability, net of current portion

 

 

 -

 

 

 

 755

 

 

 

 -

 

 

 

 

 

 755

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

Total long term liabilities

 

 

 -

 

 

 

 2,000

 

 

 

 -

 

 

 

 

 

 2,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 2,254

 

 

 

 10,634

 

 

 

 (7,140 )

 

 

 

 

 5,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock subject to possible redemption, 8,050,000 shares at redemption value

 

 

 85,748

 

 

 

 -

 

 

 

 (85,748 )

 

H

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

 -

 

 

 

 -

 

 

 

 0.21

 

 

I

 

 

 379

 

 

 

 

 

 

 

 

 

 

 

 

 0.08

 

 

I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 378.22

 

 

I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 0.16

 

 

I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 0.21

 

 

 

 196

 

 

-

 

 

E

 

 

 811

 

 

 

 

 

 

 

 

 

 

 

 

 0.16

 

 

H

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (195.08 )

 

J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (0.21 )

 

I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 0.08

 

 

F

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (0.08 )

 

I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (0.16 )

 

I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 809.59

 

 

G

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional paid-in capital

 

 

 -

 

 

 

 88,849

 

 

 

 (2,697 )

 

D

 

 

 105,984

 

 

 

 

 

 

 

 

 

 

 

 

 17,002

 

 

H

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 195

 

 

J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (2,120 )

 

L

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 845

 

 

F

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 4,287

 

 

G

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (378 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income (loss)

 

 

 (2,120 )

 

 

 (93,272 )

 

 

 2,120

 

 

L

 

 

 (97,464 )

 

 

 

 

 

 

 

 

 

 

 

 (4,192 )

 

K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

 (2,120 )

 

 

 (4,227 )

 

 

 16,055

 

 

 

 

 

 9,708

 

Total liabilities and Stockholders' Equity

 

 

 85,882

 

 

 

 6,407

 

 

 

 (76,832 )

 

 

 

 

 15,457

 

 

 
3

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

1. Basis of Presentation

 

The unaudited pro forma condensed combined financial information has been prepared to illustrate the estimated effect of the Transactions.

 

The Transactions are shown as a reverse recapitalization as provided under U.S. GAAP. FG Merger Corp. is the acquired company, with iCoreConnect Inc. treated as the acquirer. This determination reflects iCoreConnect Inc. Equityholders holding a majority of the voting power of new iCoreConnect Inc., old iCoreConnect Inc.’s pre-merger operations being the majority post-merger operations of new iCoreConnect Inc, and old iCoreConnect Inc.’s management team retaining similar roles at new iCoreConnect Inc. Accordingly, although FG Merger Corp is the legal parent company, GAAP dictates that the financial statements of new iCoreConnect Inc. will represent a continuation of old iCoreConnect Inc.’s operations, with the Transactions being treated as though old iCoreConnect Inc. issued ownership interests for FG Merger Corp., accompanied by a recapitalization. The net assets of old iCoreConnect Inc. are stated at historical cost, with no incremental goodwill or other intangible assets recorded for the effects of the Merger with FG Merger Corp.

 

2. Accounting Policies

 

Based on an analysis of FG Merger Corp and old iCoreConnect Inc.’s policies there were no identified account policies that would have an impact on the unaudited pro forma condensed combined financial information. As a result the unaudited condensed combined financial information does not assume any differences in accounting policies.

 

2. Transaction Accounting Adjustments

 

A

Represents approximately $4.43 million retained in trust from non-redemptions.

 

B

Represents $12.57 million worth of public shares purchase under the Forward Purchase Agreement.

 

C

Represents reclassification of cash and investments held in the Trust Account that becomes available at the closing of the  Business Combination.

 

D

Represents transaction cost for FGMC and iCoreconnect expected to be paid in cash upon closing of the Business Combination.

 

E

Represents transaction cost for FGMC and iCoreconnect to be paid in equity upon closing of the Business Combination.

 

F

Represents convertible debt of $845k expected to convert into equity at the close of the Business Combination.

 

G

Represents amount of iCoreConnect debt that is expected to be converted by debt holders upon closing of Business Combination.

 

H

Represents reclassification of FGMC’s Common Stock subject to possible redemptions to permanent equity. This includes impact of non-redemptions for shares.

 

I

Represents conversion of FGMC non-redeemed common stock into shares of newly issued FGMC Preferred Stock.

 

J

Represents conversion of iCoreConnect Common Stock, including the vested warrants and options that have been converted to iCoreConnect Common Stock prior to the closing, into shares of Combined Company Common Stock at the Exchange Ratio.

 

K

Represents change in fair value of the public shares purchased under the Forward Purchase Agreement.

 

L

Reflects elimination of FGMC historical retained earnings at reverse acquisition.

 

M

Represents pro forma transaction accounting adjustment to eliminate historical expenses incurred by FGMC, which will not be recurring after the completion of the Business Combination.

 

N

Represents pro forma transaction accounting adjustment to eliminate interest income earned on FGMC’s Trust Account, which will not be recurring after the completion of the Business Combination.

 

 
4