Data Storage Corporation Quarterly report pursuant to Section 13 or 15(d)

Segment Information (Tables)

6 Months Ended

Jun. 30, 2023


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.


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	)