Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.23.1
Segment Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Information

Note 14 – Segment Information

 

We operate in three reportable segments: Nexxis, Flagship Solutions Group, and CloudFirst. Our segments were determined based on our internal organizational structure, the manner in which our operations are managed, and the criteria used by our Chief Operating Decision Maker (CODM) to evaluate performance, which is generally the segment’s operating income or losses.

 

   
Operations of:   Products and services provided:
Nexxis Inc   NEXXIS is a single-source solution provider that delivers fully-managed cloud-based voice services, data transport, internet access, and SD-WAN solutions focused on business continuity for today’s modern business environment. 
     
Flagship Solutions, LLC  

Flagship Solutions Group (FSG) is a managed service provider. FSG invoices clients primarily for services that assist the clients’ technical teams. FSG has few technical assets and utilizes the assets or software of other cloud providers, whereby managing 3rd party infrastructure. FSG periodically sells equipment and software.
     
CloudFirst Technologies Corporation   CloudFirst, provides services from CloudFirst technological assets deployed in six Tier 3 data centers throughout the USA and Canada.  This technology has been developed by CloudFirst. Clients are invoiced for cloud infrastructure and disaster recovery on the CloudFirst platform.  Services provided to clients are provided on a subscription basis on long term contracts.

 

The following tables present certain financial information related to our reportable segments and Corporate:

 

                   
As of December 31, 2022
                     
    Nexxis Inc.   Flagship Solutions LLC   CloudFirst Technologies   Corporate   Total
                     
Accounts receivable   $ 34,903     $ 1,924,184     $ 1,543,749     $ —     $ 3,502,836  
Prepaid expenses and other current assets     16,799       213,826       285,306       68,735       584,666  
Net Property and Equipment     —       19,705       2,192,085       —       2,211,790  
Intangible assets, net     —       1,696,376       279,268       —       1,975,644  
Goodwill     —       1,222,971       3,015,700       —       4,238,671  
Operating lease right-of-use assets     —       167,761       58,740       —       226,501  
All other assets     —       —       —       11,346,127       11,346,127  
Total Assets   $ 51,702     $ 5,244,823     $ 7,374,848     $ 11,414,862     $ 24,086,235  
                                         
Accounts payable and accrued expenses   $ 40,091     $ 1,563,408     $ 1,069,278     $ 534,800     $ 3,207,577  
Deferred revenue     —       165,725       115,335       —       281,060  
Total Finance leases payable     —       —       641,110       —       641,110  
Total Finance leases payable related party     —       —       776,864       —       776,864  
Total Operating lease liabilities     —       169,469       62,960       —       232,429  
Total Liabilities   $ 40,091     $ 1,898,602     $ 2,665,547     $ 534,800     $ 5,139,040  

 

                                         
As of December 31, 2021
                     
    Nexxis Inc.   Flagship Solutions LLC   CloudFirst Technologies   Corporate   Total
                     
Accounts receivable   $ 19,094     $ 1,437,840     $ 927,433     $ —     $ 2,384,367  
Prepaid expenses and other current assets     6,117       330,777       198,860       647       536,401  
Net Property and Equipment     —       6,036       1,931,435       —       1,937,471  
Intangible assets, net     —       1,975,298       279,268       —       2,254,566  
Goodwill     —       3,544,971       3,015,700       —       6,560,671  
Operating lease right-of-use assets     —       268,698       153,620       —       422,318  
All other assets     —       —       —       12,239,029       12,239,029  
Total Assets   $ 25,211     $ 7,563,620     $ 6,506,316     $ 12,239,676     $ 26,334,823  
                                         
Accounts payable and accrued expenses   $ 49,291     $ 274,387     $ 812,192     $ 207,521     $ 1,343,391  
Deferred revenue     —       —       366,859       —       366,859  
Total Finance leases payable     —       —       373,723       —       373,723  
Total Finance leases payable related party     —       —       1,204,447       —       1,204,447  
Total Operating lease liabilities     —       269,407       162,351       —       431,758  
Total Liabilities   $ 49,291     $ 543,794     $ 2,919,572     $ 207,521     $ 3,720,178  

 

                                         
For the year ended December 31, 2022
                     
    Nexxis Inc.   Flagship Solutions LLC   CloudFirst Technologies   Corporate   Total
Sales   $ 931,341     $ 11,395,770     $ 11,543,726     $ —     $ 23,870,837  
Cost of sales     600,410       9,041,684       6,145,450       —       15,787,544  
Gross Profit     330,931       2,354,086       5,398,276       —       8,083,293  
                                         
Selling, general and administrative     403,370       3,599,572       2,391,613       2,216,842       8,611,397  
Impairment of goodwill             2,322,000       —       —       2,322,000  
Depreciation and amortization     —       282,684       943,227       —       1,225,911  
Total operating expenses     403,370       6,204,256       3,334,840       2,216,842       12,159,308  
                                         
Loss from Operations     (72,439 )     (3,850,170  )     2,063,436       (2,216,842 )     (4,076,015  )
                                         
Interest expense, net     —       (319  )     (138,365 )     8,597       (130,087  )
 Other expense     —        (75,418)        —        —        (75,418)   
Impairment of deferred offering costs     —       —       —       (127,343 )     (127,343 )
Total Other Income (Expense)     —       (75,737 )     (138,365 )     (118,746 )     (332,848 )
                                         
Income (Loss) before provision for income taxes   $ (72,439 )   $

(3,925,907

 )   $ 1,925,071     $ (2,335,588 )   $ (4,408,863  )

                                         
For the year ended December 31, 2021
                     
    Nexxis Inc.   Flagship Solutions LLC   CloudFirst Technologies   Corporate   Total
Sales   $ 817,175     $ 3,853,473     $ 10,205,579     $ —     $ 14,876,227  
Cost of sales     527,159       2,334,331       5,597,627       —       8,459,117  
Gross Profit     290,016       1,519,142       4,607,952       —       6,417,110  
                                         
Selling, general and administrative     329,628       1,965,727       2,763,880       840,602       5,899,837  
Depreciation and amortization     —       168,011.00       1,116,334.00       —       1,284,345  
Total operating expenses     329,628       2,133,738       3,880,214       840,602       7,184,182  
                                         
Loss from Operations     (39,612 )     (614,596 )     727,738       (840,602 )     (767,072 )
                                         
Interest expense, net     —       (3,423 )     (123,323 )     —       (126,746 )
All other expenses     —       310,723       443,385       —       754,108  
Total Other Income (Expense)     —       307,300       320,062       —       627,362  
                                         
Income (Loss) before provision for income taxes   $ (39,612 )   $ (307,296 )   $ 1,047,800     $ (840,602 )   $ (139,710 )