iCoreConnect Inc. - Quarter Report: 2008 September (Form 10-Q)

---

---

 

 

 

 

 

 

 

Nevada		95-4696799
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

 

 

 

Large accelerated filer      ¨	Accelerated filer                      ¨
Non-accelerated filer        ¨	Smaller reporting company   x
(Do not check if a smaller reporting company)

 

 

 

 

 

		September 30, 2008				June 30, 2008
ASSETS		unaudited				audited
						(as restated)
Current assets:
Cash and cash equivalents –– interest bearing		$	195,594			$	246,630
Accounts receivable, net of allowance for doubtful accounts of $5,000 and $-0- at March 31, 2008 and June 30, 2007, respectively			52,444				153,843
Other Receivable			-				650,000
Advances			5,000				0
Total Current Assets			253,038				1,050,473
Property and equipment, net			52,461				109,043
Other Assets
Technology and Medical Software, net			7,892,148				9,150,530
Goodwill			681,673				681,673
			8,573,821				9,832,203
Total Assets		$	8,879,320			$	10,991,719
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable –– banks		$	87,000			$	299,980
Current maturity of capital lease obligations			-				834
Short-term notes payable			1,651,857				2,151,566
Accounts payable and accrued expenses			1,259,481				1,259,887
Deferred income			65,000				98,056
Total Current Liabilities			3,073,338				3,810,313
Capital long-term liabilities
Long-term notes payable			1,141,931				272,219
Total Liabilities			4,215,296				4,082,532
Stockholders’ Equity
Common stock,			83,093				50,609
Additional Paid in Capital			27,907,280				26,981,769
Less: Treasury stock, 368,407 shares at both September 30, 2008 and June 30, 2008			(508,195	)			(508,195	)
Accumulated deficit			(22,818,127	)			(15,614,996	)
Total Stockholders’ Equity			4,664,051				6,909,187
Total Liabilities and Stockholders’ Equity		$	8,879,320			$	10,991,719

 

 

 

		For the three				For the three
		months ended				months ended
		September 30, 2008				September 30, 2007
		unaudited				(as restated)
Revenues:		$	76,910			$	166,717
Cost of Services			15,109				36,346
Gross Profit			61,801				130,371
Expenses:
Consulting, commissions and travel			128,068				530,023
Operational fees and expenses			166,822				235,985
Professional fees			80,543				84,553
Payroll and related taxes			270,431				277,462
Depreciation and amortization			494,354				14,376
Production, advertising, brochures and public relations			28,941				158,048
Total Expenses			1,169,159				1,300,447
Loss before other expenses			(1,107,358	)			(1,170,076	)
Other Income/(Expenses):
Interest income			4,048				552
Interest expense			(39,196	)			(35,704	)
Total Other Income/(Expenses)			(35,112	)			(35,152	)
Loss before extraordinary item			(1,142,470	)			(1,205,228	)
Extraordinary item – Litigation net of expenses and taxes			-				650,000
Net loss available to common stockholders		$	(1,142,470	)		$	(555,228	)
Net loss per share, basic and diluted, before extraordinary item			(0.01	)			(0.02	)
Net loss per share, basic and diluted, extraordinary item net		$	-			$	0.01
Net loss per share, to common stockholders		$	(0.01	)		$	(0.01	)
Weighted average number of shares, basic and diluted			78,745,373				50,609,453

 

 

		For the three				For the three
		months ended				months ended
		September 30, 2008				September 30, 2007
		unaudited				(as restated)
Cash Flows From Operating Activities:
Receipts from customers		$	23,087			$	190,414
Payments to suppliers, salaries			(1,264,903	)			(1,348,133	)
Other income received							300,000
Interest received			4,084				562
Interest paid			(18,547	)			(10,688	)
Bad Debt Expense			-				(1,706	)
Net Cash Used in Operating Activities			(1,256,279	)			(869,551	)
Cash Flows Used in Investing Activities:
Purchase of Technology and Medical Software			(340,000	)			(52,321	)
Purchase of fixed assets			(271	)			(2,105	)
Net Cash Used in Investing Activities			(340,271	)			(54,426	)
Cash Flows From Financing Activities:
Payments on capital lease obligations			-				(5,062	)
Payments on notes payable			(212,980	)			(179,989	)
Short term loans proceeds			240,000				850,000
Short term loans paid			(147,442	)			-
Sale of Common Stock			1,700,000				-
Net Cash Provided by Financing Activities			1,579,578				664,949
Net Increase/(Decrease) in Cash			(16,972	)			(259,028	)
Cash at the Beginning of Period			212,566				505,668
Cash at End of Period		$	195,594			$	246,640

Reconciliation of Net Loss to Net Cash Used by Operating Activities
Net loss		$	(1,142,470	)		$	(555,228	)
Adjustments to reconcile net income/(loss) to net cash used by operating activities
Depreciation & Amortization			494,354				14,376
Changes in:
Trade receivables			4,667				74,979
Other receivables			-				(650,000	)
Prepaid expenses			(5,000	)			-
Accounts payable and accrued expenses			(569,989	)			269,306
Accrued interest payable			20,649				16,788
Convertible Debentures  accrued interest			-				11,500
Deferred income			(58,500	)			(51,282	)
Net Cash Used by Operating Activities			(1,256,279	)			(869,651	)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	The delivery of CME (Continuing Medical Education) courses to the medical community in the U.S., which continues to grow.

 

·	The licensing of our productivity tools to state education departments in the U.S.  The state of Pennsylvania is our first customer in this effort.  We plan a sales campaign to increase our state education department customer base.

 

 

 

 

		Three Months Ended September 30
		(unaudited)
		2008								2007
Net Sales and Revenues		$	76,910				100	%		$	166,717				100	%
Cost of Services			15,109				20	%			36,346				22	%
Gross Profit			61,801				80	%			130,371				78	%
Operational General and Administrative Expenses			674,805				877	%			1,286,071				771	%
Depreciation and amortization			494,354				642	%			14,376				8	%
Bad debt expenses			-				0	%			-				1	%
Total Expenses			1,169,159				1520	%			1,300,447				780	%
Loss before other income (expense)		$	(1,107,358	)			1440	%		$	(1,170,076	)			702	%

 

 

 

 

·	lack of adequate accounting experience with personnel tasked with recording financial transactions;
·	lack of timely and accurate posting of accounts payable and accounts receivable entries to accounting system;
·	inadequate communication between the chief executive officer and chief financial officer with regards to contractual obligations and receivables;
·	inaccurate recording of company contracts and related deferral of income;
·	inaccurate amortization of company assets and recording of payroll and related tax liabilities.

·	Hired a new bookkeeper with a bachelor’s degree in accounting and 15 years of post-degree bookkeeping/accounting experience;

·	Instituted weekly reviews of accounts payable and accounts receivable postings;

·	Instituted regular meetings between the Chief Executive officer and Chief Financial Officer regarding all accounts’

·	Managements’ review and revisions to its method of recording annual contracts and posting deferred income; and

·	Contracted with an outside payroll processor to ensure accurate and timely recording of payroll liabilities.