Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.23.3
Segment Information
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Information

Note 11 – Segment Information

 

The Company operates in three reportable segments: Nexxis Inc., Flagship Solutions Group, and CloudFirst. The Company’s segments were determined based on its internal organizational structure, the manner in which its operations are managed, and the criteria used by its 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 has maintains technical assets on one data center. 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 the Company’s reportable segments and Corporate:

 

 

                                       
As of September 30, 2023
    CloudFirst Technologies
Corporation		   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
                     
Accounts receivable   $ 1,032,309     $ 1,283,809     $ 28,225     $ —     $ 2,344,343  
Prepaid expenses and other current assets     616,149       149,239       19,089       87,556       872,033  
Net Property and Equipment     2,710,730       22,334       3,118       2,838       2,739,020  
 Intangible assets, net     279,268       1,487,963       —       —       1,767,231  
 Goodwill     3,015,700       1,222,971       —       —       4,238,671  
 Operating lease right-of-use assets     —       89,547       —       —       89,547  
All other assets     —       —       —       11,573,746       11,573,746  

Total Assets

 

   $ 7,654,156     $ 4,255,863     $ 50,432     $ 11,664,140     $ 23,624,591  
                                         
Accounts payable and accrued expenses   $ 1,031,518     $ 1,351,349     $ 127,002     $ 348,855     $ 2,858,724  
Deferred revenue     106,370       153,172       —       —       259,542  
Total Finance leases payable     346,589       —       —       —       346,589  
Total Finance leases payable related party     384,577       —       —       —       384,577  
 Total Operating lease liabilities     —       90,979       —       —       90,979  
Total Liabilities   $ 1,869,054     $ 1,595,500     $ 127,002     $ 348,855     $ 3,940,411  

 

                                         
As of December 31, 2022
    CloudFirst Technologies
Corporation		   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 September 30, 2023
    CloudFirst Technologies
Corporation		   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 3,741,717     $ 1,974,343     $ 270,565     $ —     $ 5,986,625  
Cost of Sales     1,990,420       1,501,830       164,021       —       3,656,271  
Gross Profit     1,751,297       472,513       106,544       —       2,330,354  
                                         
Selling, General and Administrative     651,896       544,686       174,527       606,584       1,977,693  
Depreciation and Amortization     267,440       70,691       213       176       338,520  
Total Operating Expenses     919,336       615,377       174,740       606,760       2,316,213  
                                         
Income (Loss) from Operations     831,961       (142,864 )     (68,196 )     (606,760 )     14,141  
                                         
Interest Expense, net     (13,069 )     —       —       156,666       143,597  
Other Expense     —       —       —       —       —  
Total Other Income (Expense)     (13,069 )     —       —       156,666       143,597  
                                         
Income (Loss) before provision for income taxes    $ 818,892     $ (142,864 )   $ (68,196 )   $ (450,094 )   $ 157,738  

 

                                         
For the three months ended September 30, 2022
    CloudFirst Technologies
Corporation		   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 2,976,461     $ 1,218,990     $ 223,834     $ —     $ 4,419,285  
Cost of Sales     1,525,175       910,852       130,957       —       2,566,984  
Gross Profit     1,451,286       308,138       92,877       —       1,852,301  
                                         
Selling, General and Administrative     556,060       691,863       92,837       443,026       1,783,786  
Depreciation and Amortization     220,810       70,929       —       —       291,739  
Total Operating Expenses     776,870       762,792       92,837       443,026       2,075,525  
                                         
Income (Loss) from Operations     674,416       (454,654 )     40       (443,026 )     (223,224 )
                                         
Interest Expense, net     (29,123 )     (137 )     —       (479 )     (29,739 )
Loss on Disposal of Equipment     —       —       —       —       —  
Gain on Forgiveness of Debt     —       —       —       —       —  
All Other Expenses     —       —       —       —       —  
Total Other Income (Expense)     (29,123 )     (137 )     —       (479 )     (29,739 )
                                         
Income (Loss) before Provision for Income Taxes   $ 645,293     $ (454,791 )   $ 40     $ (443,505 )   $ (252,963 )

 

                                         
For the nine months ended September 30, 2023
    CloudFirst Technologies
Corporation		   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 10,052,281     $ 7,918,016     $ 800,442     $ —     $ 18,770,739  
Cost of Sales     5,323,346       5,949,745       498,795       —       11,771,886  
Gross Profit     4,728,935       1,968,271       301,647       —       6,998,853  
                                         
Selling, General and Administrative     2,002,882       1,729,191       468,605       1,790,124       5,990,802  
Depreciation and Amortization     714,585       212,646       492       457       928,180  
Total Operating Expenses     2,717,467       1,941,837       469,097       1,790,581       6,918,982  
                                         
Income (Loss) from Operations     2,011,468       26,434       (167,450 )     (1,790,581 )     79,871  
                                         
Interest Expense, net     (56,985 )     —       —       375,953       318,968  
Total Other Income (Expense)     (56,985 )     —       —       375,953       318,968  
                                         
Income (Loss) before Provision for Income Taxes   $ 1,954,483     $ 26,434     $ (167,450 )   $ (1,414,628 )   $ 398,839  

 

                                         
For the nine months ended September 30, 2022
    CloudFirst Technologies
Corporation		   Flagship Solutions LLC   Nexxis Inc.   Corporate   Total
Sales   $ 8,200,881     $ 9,045,733     $ 657,619     $ —     $ 17,904,233  
Cost of Sales     4,289,894       7,146,441       411,125       —       11,847,460  
Gross Profit     3,910,987       1,899,292       246,494       —       6,056,773  
                                         
Selling, General and Administrative     1,712,409       2,807,096       278,785       1,398,977       6,197,267  
Depreciation and Amortization     720,573       211,755       —       —       932,328  
Total Operating expenses     2,432,982       3,018,851       278,785       1,398,977       7,129,595  
                                         
Income (Loss) from Operations     1,478,005       (1,119,559 )     (32,291 )     (1,398,977 )     (1,072,822 )
                                         
Interest Expense, net     (108,052 )     (75,695 )     —       (2,316 )     (186,063 )
Loss on Disposal of Equipment     —       —       —       —       —  
Gain on Forgiveness of Debt     —       —       —       —       —  
All Other Expenses     —       —       —       —       —  
Total Other Income (Expense)     (108,052 )     (75,695 )     —       (2,316 )     (186,063 )
                                         
Income (Loss) before Provision for Income Taxes   $ 1,369,953     $ (1,195,254 )   $ (32,291 )   $ (1,401,293 )   $ (1,258,885 )