Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.24.1
Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment Information

Note 12 – 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, 2023
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
                     
Accounts receivable    $ 528,810     $ 701,010     $ 30,152       —     $ 1,259,972  
Prepaid expenses and other current assets     353,881       65,373       18,157       75,764       513,175  
Net Property and Equipment     2,706,435       20,790       2,905       2,644       2,732,774  
Intangible assets, net     279,268       1,418,816       —       —       1,698,084  
Goodwill     3,015,700       1,222,971       —       —       4,238,671  
Operating lease right-of-use assets     —       62,981       —       —       62,981  
All other assets     —       —       —       12,795,362       12,795,362  
Total Assets   $ 6,884,094     $ 3,491,941     $ 51,214     $ 12,873,770     $ 23,301,019  
                                         
Accounts payable and accrued expenses   $ 687,342     $ 1,333,621     $ 65,161     $ 522,814     $ 2,608,938  
Deferred revenue     231,253       104,948       —       —       336,201  
Total Finance leases payable     281,241       —       —       —       281,241  
Total Finance leases payable related party     256,241       —       —       —       256,241  
Total Operating lease liabilities     —       63,983       —       —       63,983  
Total Liabilities   $ 1,456,077     $ 1,502,552     $ 65,161     $ 522,814     $ 3,546,604  

 

                     
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 year ended December 31, 2023
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 13,510,866     $ 10,351,783     $ 1,096,927     $ —     $ 24,959,576  
Cost of sales     7,097,844       7,651,993       633,414       —       15,383,251  
Gross Profit     6,413,022       2,699,790       463,513       —       9,576,325  
                                         
Selling, general and administrative     2,723,593       2,388,600       692,185       2,638,764       8,443,142  
Depreciation and amortization     1,016,901       283,337       705       651       1,301,594  
Total operating expenses     3,740,494       2,671,937       692,890       2,639,415       9,744,736  
                                         
Income (Loss) from Operations     2,672,528       27,853       (229,377 )     (2,639,415 )     (168,411 )
                                         
Interest expense, net     (74,502 )     —       —       542,229       467,727  
Total Other Income (Expense)     (74,502 )     —       —       542,229       467,727  
                                         
Income (Loss) before provision for income taxes   $ 2,598,026     $ 27,853     $ (229,377 )   $ (2,097,186 )   $ 299,316  

 

                     
For the year ended December 31, 2022
                     
    CloudFirst Technologies   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 11,543,726     $ 11,395,770     $ 931,341     $ —     $ 23,870,837  
Cost of sales     6,145,450       9,041,684       600,410       —       15,787,544  
Gross Profit     5,398,276       2,354,086       330,931       —       8,083,293  
                                         
Selling, general and administrative     2,391,613       3,599,572       403,370       2,216,842       8,611,397  
Impairment of goodwill     —       2,322,000       —       —       2,322,000  
Depreciation and amortization     943,227       282,684       —       —       1,225,911  
Total operating expenses     3,334,840       6,204,256       403,370       2,216,842       12,159,308  
                                         
Income (Loss) from Operations     2,063,436     (3,850,170 )     (72,439 )     (2,216,842 )     (4,076,015 )
                                         
Interest expense, net     (138,365 )      (319 )     —       8,597       (130,087 )
Other expense     —       (75,418 )     —       —       (75,418 )
Impairment of deferred offering costs      —        —        —        (127,343 )       (127,343 ) 
Total Other Income (Expense)     (138,365 )     (75,737 )     —       (118,746 )     (332,848 )
                                         
Income (Loss) before provision for income taxes   $ 1,925,071     $ (3,925,907 )   $ (72,439 )   $ (2,335,588 )   $ (4,408,863 )