Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.23.2
Segment Information
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Segment Information

Note 11 – 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.

 

Schedule of segment reporting income or losses    
Operations of:   Products and services provided:
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.
     
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 has maintains technical assets on one data center. FSG periodically sells equipment and software.
     

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.

 

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

 

                                       
As of June 30, 2023
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
                     
Accounts receivable   $ 559,958     $ 1,602,958     $ 52,686     $ 6,000     $ 2,221,602  
Prepaid expenses and other current assets     466,801       126,839       24,254       118,492       736,386  
Net Property and Equipment     2,897,408       23,879       3,331       2,503       2,927,121  
 Intangible assets, net     279,268       1,557,110       —       —       1,836,378  
 Goodwill     3,015,700       1,222,971       —       —       4,238,671  
 Operating lease right-of-use assets     8,612       115,863       —       —       124,475  
All other assets     —       —       —       10,715,729       10,715,729  
Total Assets   $ 7,227,747     $ 4,649,620     $ 80,271     $ 10,842,724     $ 22,800,362  
                                         
Accounts payable and accrued expenses   $ 1,202,846     $ 598,799     $ 53,527     $ 233,305     $ 2,088,477  
Deferred revenue     151,437       162,629       —       —       314,066  
Total Finance leases payable     404,628       —       —       —       404,628  
Total Finance leases payable related party     468,859       —       —       —       468,859  
 Total Operating lease liabilities     9,274       117,579       —       —       126,853  
Total Liabilities   $ 2,237,044     $ 879,007     $ 53,527     $ 233,305     $ 3,402,883  

 

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

 

                                         
For the Three Months Ended June 30, 2023
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 3,151,825     $ 2,487,485     $ 265,081     $ —     $ 5,904,391  
Cost of sales     1,627,281       1,541,703       156,653       —       3,325,637  
Gross Profit     1,524,544       945,782       108,428       —       2,578,754  
                                         
Selling, general and administrative     744,534       644,178       169,328       613,020       2,171,060  
Depreciation and amortization     229,523       71,052       208       167       300,950  
Total operating expenses     974,057       715,230       169,536       613,187       2,472,010  
                                         
Income (Loss) from Operations     550,487       230,552       (61,108 )     (613,187 )     106,744  
                                         
Interest expense, net     (16,570 )     —       —       115,864       99,294  
Other expense     —       —       —       —       —  
Total Other Income (Expense)     (16,570 )     —       —       115,864       99,294  
                                         
Income (Loss) before provision for income taxes     533,917       230,552       (61,108 )     (497,323 )     206,038  

 

                                         
For the Three Months Ended June 30, 2022
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 2,822,367     $ 1,783,521     $ 221,861     $ —     $ 4,827,749  
Cost of sales     1,411,652       1,717,243       140,292       —       3,269,187  
Gross Profit     1,410,715       66,278       81,569       —       1,558,562  
                                         
Selling, general and administrative     679,868       1,027,693       88,749       507,278       2,303,588  
Depreciation and amortization     219,925       70,691       —       —       290,616  
Total operating expenses     899,793       1,098,384       88,749       507,278       2,594,204  
                                         
Income (Loss) from Operations     510,922       (1,032,106 )     (7,180 )     (507,278 )     (1,035,642 )
                                         
Interest expense, net     (37,206 )     (75,510 )     —       (948 )     (113,664 )
Loss on disposal of equipment     —       —       —       —       —  
Gain on forgiveness of debt     —       —       —       —       —  
All other expenses     —       —       —       —       —  
Total Other Income (Expense)     (37,206 )     (75,510 )     —       (948 )     (113,664 )
                                         
Income (Loss) before provision for income taxes   $ 473,716     $ (1,107,616 )   $ (7,180 )   $ (508,226 )   $ (1,149,306 )

 

                                         
For the Six Months Ended June 30, 2023
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 6,310,564     $ 5,943,673     $ 529,877     $ —     $ 12,784,114  
Cost of sales     3,332,926       4,447,915       334,774       —       8,115,615  
Gross Profit     2,977,638       1,495,758       195,103       —       4,668,499  
                                         
Selling, general and administrative     1,350,986       1,184,505       294,078       1,183,540       4,013,109  
Depreciation and amortization     447,145       141,955       279.00       281       589,660  
Total operating expenses     1,798,131       1,326,460       294,357       1,183,821       4,602,769  
                                         
Income (Loss) from Operations     1,179,507       169,298       (99,254 )     (1,183,821 )     65,730  
                                         
Interest expense, net     (43,916 )     —       —       219,287       175,371  
Total Other Income (Expense)     (43,916 )     —       —       219,287       175,371  
                                         
Income (Loss) before provision for income taxes   $ 1,135,591     $ 169,298     $ (99,254 )   $ (964,534 )   $ 241,101  

 

                                         
For the Six Months Ended June 30, 2022
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 5,224,420     $ 7,826,743     $ 433,785     $ —     $ 13,484,948  
Cost of sales     2,764,719       6,235,589       280,168       —       9,280,476  
Gross Profit     2,459,701       1,591,154       153,617       —       4,204,472  
                                         
Selling, general and administrative     1,156,349       2,115,233       185,948       955,951       4,413,481  
Depreciation and amortization     499,763       140,826       —       —       640,589  
Total operating expenses     1,656,112       2,256,059       185,948       955,951       5,054,070  
                                         
Income (Loss) from Operations     803,589       (664,905 )     (32,331 )     (955,951 )     (849,598 )
                                         
Interest expense, net     (78,929 )     (75,558 )     —       (1,837 )     (156,324 )
Loss on disposal of equipment     —       —       —       —       —  
Gain on forgiveness of debt     —       —       —       —       —  
All other expenses     —       —       —       —       —  
Total Other Income (Expense)     (78,929 )     (75,558 )     —       (1,837 )     (156,324 )
                                         
Income (Loss) before provision for income taxes   $ 724,660     $ (740,463 )   $ (32,331 )   $ (957,788 )   $ (1,005,922 )