Cover
Cover | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-1 |
Amendment Flag | false |
Entity Registrant Name | DATA STORAGE CORPORATION |
Entity Central Index Key | 0001419951 |
Entity Address, Address Line One | Data Storage Corporation |
Entity Address, Address Line Two | 48 South Service Road |
Entity Address, City or Town | Melville |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 11747 |
City Area Code | (212) |
Local Phone Number | 564-4922 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | |||
Cash and cash equivalents | $ 3,076,120 | $ 893,598 | $ 326,561 |
Accounts receivable (less allowance for doubtful accounts of $59,067 and $30,000 in 2021 and 2020, respectively) | 1,558,716 | 554,587 | 691,436 |
Prepaid expenses and other current assets | 392,489 | 239,472 | 80,728 |
Total Current Assets | 5,027,325 | 1,687,657 | 1,098,725 |
Property and Equipment: | |||
Property and equipment | 6,327,875 | 7,845,423 | 6,894,087 |
Less—Accumulated depreciation | (4,177,560) | (5,543,822) | (4,705,256) |
Net Property and Equipment | 2,150,315 | 2,301,601 | 2,188,831 |
Other Assets: | |||
Goodwill | 13,216,040 | 3,015,700 | 3,015,700 |
Operating lease right-of-use assets | 198,549 | 241,911 | 324,267 |
Other assets | 72,153 | 49,310 | 65,433 |
Intangible assets, net | 391,662 | 455,935 | 649,934 |
Total Other Assets | 13,878,404 | 3,762,856 | 4,055,334 |
Total Assets | 21,056,044 | 7,752,114 | 7,342,890 |
Current Liabilities: | |||
Accounts payable and accrued expenses | 1,547,763 | 979,552 | 906,716 |
Dividend payable | 1,115,674 | 970,997 | |
Deferred revenue | 431,047 | 461,893 | 432,942 |
Line of credit | 0 | 24 | 75,000 |
Finance leases payable | 174,110 | 168,139 | 0 |
Finance leases payable related party | 973,245 | 1,149,403 | 833,148 |
Operating lease liabilities short term | 106,102 | 104,549 | 101,505 |
Contingent Consideration | 4,950,000 | ||
Note payable | 481,977 | 374,871 | 350,000 |
Total Current Liabilities | 8,664,244 | 4,354,105 | 3,670,308 |
Note payable long term | 107,106 | 0 | |
Operating lease liabilities long term | 102,407 | 147,525 | 231,312 |
Finance leases payable, long term | 167,694 | 247,677 | 0 |
Finance leases payable related party, long term | 597,408 | 974,743 | 1,713,122 |
Total Long Term Liabilities | 867,509 | 1,477,051 | 1,944,434 |
Total Liabilities | 9,531,753 | 5,831,156 | 5,614,742 |
Stockholders’ Equity: | |||
Preferred stock, Series A par value $.001; 10,000,000 shares authorized; 0 and 1,401,786 shares issued and outstanding in 2021 and 2020, respectively | 1,402 | 1,402 | |
Common stock, par value $.001; 250,000,000 shares authorized; 4,862,352 and 3,213,486 shares issued and outstanding in 2021 and 2020, respectively | 4,862 | 3,213 | 3,211 |
Additional paid in capital | 27,276,653 | 17,745,785 | 17,581,659 |
Accumulated deficit | (15,657,208) | (15,734,737) | (15,790,076) |
Total Data Storage Corp Stockholders’ Equity | 11,624,307 | 2,015,663 | 1,796,196 |
Non-controlling interest in consolidated subsidiary | (100,016) | (94,705) | (68,048) |
Total Stockholder’s Equity | 11,524,291 | 1,920,958 | 1,728,148 |
Total Liabilities and Stockholders’ Equity | $ 21,056,044 | $ 7,752,114 | $ 7,342,890 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts related to accounts receivable | $ 59,067 | $ 30,000 | $ 30,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 1,401,786 | 1,401,786 |
Preferred stock, outstanding | 0 | 1,401,786 | 1,401,786 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common stock, issued | 4,862,352 | 3,213,486 | 3,210,985 |
Common stock, outstanding | 4,862,352 | 3,213,486 | 3,210,985 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||||
Sales | $ 3,528,249 | $ 2,005,625 | $ 6,102,940 | $ 4,104,335 | $ 9,320,933 | $ 8,483,608 |
Cost of sales | 2,021,324 | 1,140,421 | 3,442,223 | 2,356,538 | 5,425,205 | 4,746,031 |
Gross Profit | 1,506,925 | 865,204 | 2,660,717 | 1,747,797 | 3,895,728 | 3,737,577 |
Selling, general and administrative | 1,602,311 | 988,266 | 2,720,718 | 1,864,892 | 3,896,791 | 3,531,053 |
Income (loss) from Operations | (95,386) | (123,062) | (60,001) | (117,095) | (1,063) | 206,524 |
Other Income (Expense) | ||||||
Interest income | 2 | 4 | 20 | 24 | 250 | |
Interest expense | (46,623) | (43,679) | (81,670) | (90,139) | (175,602) | (177,451) |
Gain on contingent liability | 350,000 | 350,000 | ||||
Loss on disposal of equipment | (29,732) | (29,732) | ||||
Gain on forgiveness of debt | 307,300 | 307,300 | ||||
Gain on extinguishment of contingent liability | 350,000 | 0 | ||||
Total Other Income (Expense) | 230,947 | 306,321 | 195,902 | 259,881 | 174,422 | (177,201) |
Income before provision for income taxes | 135,561 | 183,259 | 135,901 | 142,786 | 173,359 | 29,323 |
Provision for income taxes | ||||||
Net Income | 135,561 | 183,259 | 135,901 | 142,786 | 173,359 | 29,323 |
Non-controlling interest in consolidated subsidiary | 3,552 | 7,487 | 5,311 | 13,550 | 26,657 | 40,537 |
Net Income attributable to Data Storage Corp | 139,113 | 190,746 | 141,212 | 156,336 | 200,016 | 69,860 |
Preferred Stock Dividends | (24,800) | (35,041) | (63,683) | (69,227) | (144,677) | (124,312) |
Net Income Attributable to Common Stockholders | 114,313 | 155,705 | 77,529 | 87,109 | ||
Net Income (Loss) Attributable to Common Stockholders | $ 114,313 | $ 155,705 | $ 77,529 | $ 87,109 | $ 55,339 | $ (54,452) |
Earnings per Share – Basic | $ 0.03 | $ 0.05 | $ 0.02 | $ 0.03 | $ 0.02 | $ 0.02 |
Earnings per Share – Diluted | $ 0.03 | $ 0.05 | $ 0.02 | $ 0.03 | $ 0.02 | $ 0.02 |
Weighted Average Number of Shares – Basic | 3,981,402 | 3,213,485 | 3,607,909 | 3,212,822 | 3,213,157 | 3,203,917 |
Weighted Average Number of Shares – Diluted | 4,118,989 | 3,357,589 | 3,611,242 | 3,356,926 | 3,366,010 | 3,203,917 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | ||||
Net Income | $ 135,901 | $ 142,786 | $ 173,359 | $ 29,323 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 577,044 | 494,467 | 1,032,566 | 896,697 |
Stock based compensation | 76,221 | 74,386 | 158,728 | 41,340 |
Gain on forgiveness of debt | (307,300) | |||
Gain on contingent liability | (350,000) | |||
Loss on disposal of equipment | 29,732 | |||
Gain on extinguishment of contingent liability | (350,000) | 0 | ||
Changes in Assets and Liabilities: | ||||
Accounts receivable | 385,134 | 72,069 | 136,849 | (160,191) |
Other assets | (344) | 16,125 | 16,126 | 0 |
Prepaid expenses and other current assets | (25,443) | (71,168) | (132,132) | 87,163 |
Right of use asset | 43,362 | 40,473 | 82,356 | (324,267) |
Accounts payable and accrued expenses | 53,857 | (55,529) | 44,620 | (81,862) |
Deferred revenue | (99,582) | 56,517 | 28,951 | (2,464) |
Operating lease liability | (43,565) | (39,168) | ||
Deferred rent | 0 | (18,890) | ||
Operating lease liability | (80,743) | 332,817 | ||
Net Cash Provided by Operating Activities | 825,017 | 380,958 | 1,110,679 | 799,666 |
Cash Flows from Investing Activities: | ||||
Capital expenditures | (303,228) | (101,850) | (181,072) | (40,355) |
Cash consideration for business acquisition | (5,937,275) | |||
Net Cash Used in Investing Activities | (6,240,503) | (101,850) | (181,072) | (40,355) |
Cash Flows from Financing Activities: | ||||
Repayments of capital lease obligations | 0 | 0 | ||
Proceeds from issuance of note payable | 481,977 | 481,977 | 0 | |
Repayments of finance lease obligations related party | (603,495) | (397,719) | (718,690) | (741,940) |
Repayments of finance lease obligations | (74,010) | (4,109) | (56,281) | 0 |
Proceeds from issuance of common stock and warrants | 9,454,894 | |||
Cash received for the exercised of options | 5,400 | 5,400 | 5,400 | |
Repayments of Dividend payable | (1,179,357) | |||
Advance from Credit Line | 0 | 75,000 | ||
Repayment of line of credit | (24) | (74,976) | (74,976) | 0 |
Net Cash Provided by Financing Activities | 7,598,008 | 10,573 | (362,570) | (661,540) |
Increase in Cash and Cash Equivalents | 2,182,522 | 289,681 | 567,037 | 97,771 |
Cash and Cash Equivalents, Beginning of Period | 893,598 | 326,561 | 326,561 | 228,790 |
Cash and Cash Equivalents, End of Period | 3,076,120 | 616,242 | 893,598 | 326,561 |
Supplemental Disclosures | ||||
Cash paid for interest | 78,136 | 77,095 | 168,837 | 177,451 |
Cash paid for income taxes | 0 | 0 | ||
Non-cash investing and financing activities: | ||||
Accrual of preferred stock dividend | 63,683 | 69,227 | 144,677 | 124,312 |
Assets acquired by finance lease | $ 50,000 | $ 663,078 | $ 808,261 | $ 1,560,021 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2018 | $ 1,402 | $ 3,203 | $ 17,534,925 | $ (15,735,624) | $ (27,511) | $ 1,776,395 |
Balance at beginning (in shares) at Dec. 31, 2018 | 1,401,786 | 3,203,485 | ||||
Stock Options Issued as Compensation | 15,342 | 15,342 | ||||
Net Income (Loss) | 69,860 | (40,537) | 29,323 | |||
Common Stock Issued as Compensation | $ 5 | 25,995 | 26,000 | |||
Common Stock Issued as Compensation (in shares) | 5,000 | |||||
Stock Options Exercise | $ 3 | 5,397 | 5,400 | |||
Stock Options Exercise, shares | 2,500 | |||||
Stock-based compensation | 41,340 | |||||
Preferred Stock Dividend | (124,312) | (124,312) | ||||
Ending balance, value at Dec. 31, 2019 | $ 1,402 | $ 3,211 | 17,581,659 | (15,790,076) | (68,048) | 1,728,148 |
Balance at end (in shares) at Dec. 31, 2019 | 1,401,786 | 3,210,985 | ||||
Net Income (Loss) | 156,336 | (13,550) | 142,786 | |||
Common Stock Issued as Compensation | ||||||
Stock Options Exercise | $ 2 | 5,398 | 5,400 | |||
Stock Options Exercise, shares | 2,500 | |||||
Stock-based compensation | 74,386 | 74,386 | ||||
Preferred Stock Dividend | (69,227) | (69,227) | ||||
Ending balance, value at Jun. 30, 2020 | $ 1,402 | $ 3,213 | 17,661,443 | (15,702,967) | (81,598) | 1,881,493 |
Balance at end (in shares) at Jun. 30, 2020 | 1,401,786 | 3,213,485 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 1,402 | $ 3,211 | 17,581,659 | (15,790,076) | (68,048) | 1,728,148 |
Balance at beginning (in shares) at Dec. 31, 2019 | 1,401,786 | 3,210,985 | ||||
Stock Options Issued as Compensation | 158,728 | 158,728 | ||||
Net Income (Loss) | 200,016 | (26,657) | 173,359 | |||
Stock Options Exercise | $ 2 | 5,398 | 5,400 | |||
Stock Options Exercise, shares | 2,501 | |||||
Stock-based compensation | 158,728 | |||||
Preferred Stock Dividend | (144,677) | (144,677) | ||||
Ending balance, value at Dec. 31, 2020 | $ 1,402 | $ 3,213 | 17,745,785 | (15,734,737) | (94,705) | 1,920,958 |
Balance at end (in shares) at Dec. 31, 2020 | 1,401,786 | 3,213,486 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 1,402 | $ 3,213 | 17,620,105 | (15,858,672) | (74,111) | 1,691,937 |
Balance at beginning (in shares) at Mar. 31, 2020 | 1,401,786 | 3,213,485 | ||||
Net Income (Loss) | 190,746 | (7,487) | 183,259 | |||
Stock-based compensation | 41,338 | 41,338 | ||||
Preferred Stock Dividend | (35,041) | (35,041) | ||||
Ending balance, value at Jun. 30, 2020 | $ 1,402 | $ 3,213 | 17,661,443 | (15,702,967) | (81,598) | 1,881,493 |
Balance at end (in shares) at Jun. 30, 2020 | 1,401,786 | 3,213,485 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 1,402 | $ 3,213 | 17,745,785 | (15,734,737) | (94,705) | 1,920,958 |
Balance at beginning (in shares) at Dec. 31, 2020 | 1,401,786 | 3,213,486 | ||||
Conversion of preferred series to Common stock | $ (1,402) | $ 44 | 1,358 | |||
Conversion of preferred series to stock, shares | (1,401,786) | 43,806 | ||||
Proceeds from issuance of common stock and warrants net of offering costs | $ 1,600 | 9,453,294 | 9,454,894 | |||
Proceeds from issuance of common stock and warrants, shares | 1,600,000 | |||||
Net Income (Loss) | 141,212 | (5,311) | 135,901 | |||
Stock Options Exercise | $ 5 | (5) | ||||
Stock Options Exercise, shares | 5,060 | 5,060 | ||||
Stock-based compensation | 76,221 | $ 76,221 | ||||
Preferred Stock Dividend | (63,683) | (63,683) | ||||
Ending balance, value at Jun. 30, 2021 | $ 4,862 | 27,276,653 | (15,657,208) | (100,016) | 11,524,291 | |
Balance at end (in shares) at Jun. 30, 2021 | 4,862,352 | |||||
Beginning balance, value at Mar. 31, 2021 | $ 1,402 | $ 3,213 | 17,787,956 | (15,771,521) | (96,464) | 1,924,586 |
Balance at beginning (in shares) at Mar. 31, 2021 | 1,401,786 | 3,213,486 | ||||
Conversion of preferred series to Common stock | $ (1,402) | $ 44 | 1,358 | |||
Conversion of preferred series to stock, shares | (1,401,786) | 43,806 | ||||
Proceeds from issuance of common stock and warrants net of offering costs | $ 1,600 | 9,453,294 | 9,454,894 | |||
Proceeds from issuance of common stock and warrants, shares | 1,600,000 | |||||
Net Income (Loss) | 139,113 | (3,552) | 135,561 | |||
Stock Options Exercise | $ 5 | (5) | ||||
Stock Options Exercise, shares | 5,060 | |||||
Stock-based compensation | 34,050 | 34,050 | ||||
Preferred Stock Dividend | (24,800) | (24,800) | ||||
Ending balance, value at Jun. 30, 2021 | $ 4,862 | $ 27,276,653 | $ (15,657,208) | $ (100,016) | $ 11,524,291 | |
Balance at end (in shares) at Jun. 30, 2021 | 4,862,352 |
Basis of Presentation, Organiza
Basis of Presentation, Organization and Other Matters | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation, Organization and Other Matters | Note 1 - Basis of Presentation, Organization and Other Matters Data Storage Corporation (“DSC” or the “Company”) provides subscription based, long term agreements for disaster recovery solutions, Infrastructure as a Service (IaaS), Cyber Security and Voice and Data solutions. Headquartered in Melville, NY, DSC offers solutions and services to businesses within the healthcare, banking and finance, distribution services, manufacturing, construction, education, and government industries. DSC derives its revenues from subscription services and solutions, managed services, software and maintenance, equipment and onboarding provisioning. DSC maintains infrastructure and storage equipment in several technical centers in New York, Massachusetts, Texas, Florida and North Carolina. On May 31, 2021, the Company completed the merger (the “Merger”) contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”) with Data Storage FL, LLC, a Florida limited liability company and the Company’s wholly-owned subsidiary (the “Merger Sub”), Flagship Solutions, LLC (“Flagship”), a Florida limited liability company. Flagship is a provider of IBM solutions, managed services and cloud solutions. The Company expects that Flagship’s business will be synergistic with the Company’s existing IBM business and anticipates meaningful operation efficiency through the integration of the two organizations. The Company also believes the Merger will provide the combined entities a comprehensive one-stop provider to cross-sell solutions across each organization’s respective enterprise, as well as middle-market customers. Key offerings for the combined companies are expected to include a wide array of multi-cloud information technology solutions in highly secure, reliable enterprise level cloud services for companies using IBM Power systems, Microsoft Windows and Linux, including: Infrastructure as a Service (IaaS), Disaster Recovery of digital information (DRaaS), Cyber Security as a Service (CSaaS), and Data Analytics as a Service. | Note 1 - Basis of Presentation, Organization and Other Matters Data Storage Corporation (“DSC” or the “Company”) provides subscription based, long term agreements for disaster recovery solutions, Infrastructure as a Service (IaaS) and VoIP type solutions. Headquartered in Melville, NY, with additional offices in Warwick, RI, DSC offers solutions and services to businesses within the healthcare, banking and finance, distribution services, manufacturing, construction, education, and government industries. DSC derives its revenues from subscription services and solutions, managed services, software and maintenance, equipment and onboarding provisioning. DSC maintains infrastructure and storage equipment in several technical centers in New York, New Jersey, Massachusetts, North Carolina and Texas. Going Concern Analysis Under ASU 2014-15 Presentation of Financial Statements-Going Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued. Management has assessed the Company’s ability to continue as a going concern in accordance with the requirement of ASC 205-40. As reflected in the consolidated financial statements, the Company had a net income (loss) available to common stockholders of $ 55,339 (54,452) 893,598 2,666,448 During the year ended December 31, 2020, the Company generated cash from operations of $ 1,110,679 If necessary, management also determined that it is probable that related party sources of debt financing and capitalized leases can be renegotiated based on management’s history of being able to raise and refinance debt through related parties. As a result of the current favorable trends of improving cash flow, the Company concluded that the initial conditions which raised substantial doubt regarding the ability to continue as a going concern has been alleviated. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of Consolidation The Condensed Consolidated Financial statements include the accounts of (i) the Company, (ii) its wholly-owned subsidiaries, Data Storage Corporation, a Delaware corporation, and Data Storage FL, LLC, a Florida limited liability company, (iii) Flagship Solutions, LLC, a Florida limited liability company, Basis of Presentation The Condensed Consolidated Financial Statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP). Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. As such, the information included in these financial statements should be read in conjunction with the audited financial statements as of and for the years ended December 31, 2020 and 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), as filed on March 31, 2021. In the opinion of the Company’s management, these condensed consolidated financial statements include all adjustments, which are of only a normal and recurring nature, necessary for a fair presentation of the statement of financial position of the Company as of June 30, 2021 and its results of operations and cash flows for the three and six months ended June 30, 2021 and 2020. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2021. Business combinations We account for business combinations under the acquisition method of accounting, which requires us to recognize separately from goodwill, the assets acquired, and the liabilities assumed at their acquisition date fair values. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of operations. Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include future expected cash flows from product sales, customer contracts and acquired technologies, and estimated cash flows from the projects when completed and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Recently Issued and Newly Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Estimated Fair Value of Financial Instruments The Company’s financial instruments include cash, accounts receivable, accounts payable, line of credit, notes payable and lease commitments. Management believes the estimated fair value of these accounts at June 30, 2021 approximate their carrying value as reflected in the balance sheet due to the short-term nature of these instruments or the use of market interest rates for debt instruments. The carrying values of certain of the Company’s notes payable and capital lease obligations approximate their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity or remaining maturity at the time of purchase, of three months or less to be cash equivalents. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments and assets subjecting the Company to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable. The Company’s cash and cash equivalents are maintained at major U.S. financial institutions. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company’s customers are primarily concentrated in the United States. The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts on factors surrounding the credit risk of specific customers, historical trends, and other information. As of June 30, 2021, DSC had two customers with an accounts receivable balance representing 33 31 For the six months ended June 30, 2021 the Company had one customer that accounted for 15 14 Accounts Receivable/Allowance for Credit Losses The Company sells its services to customers on an open credit basis. Accounts receivable are uncollateralized, non-interest-bearing customer obligations. Accounts receivables are typically due within 30 Property and Equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives or the term of the lease using the straight-line method for financial statement purposes. Estimated useful lives in years for depreciation are 5 to 7 years for property and equipment. Additions, betterments and replacements are capitalized, while expenditures for repairs and maintenance are charged to operations when incurred. As units of property are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income. During the six months ended June 30, 2021, the Company recorded a loss on disposal of equipment of $ 29,732 Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At June 30, 2021 and December 31, 2020, the Company had a full valuation allowance against its deferred tax assets. Per FASB ASC 740-10, disclosure is not required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not possibility that the outcome will be unfavorable. Using this guidance, as of December 31, 2020 and 2019, the Company has no Goodwill and Other Intangibles In accordance with GAAP, the Company tests goodwill and other intangible assets for impairment on at least an annual basis. Impairment exists if the carrying value of a reporting unit exceeds its estimated fair value. To determine the fair value of goodwill and intangible assets, the Company uses many assumptions and estimates using a market participant approach that directly impact the results of the testing. In making these assumptions and estimates, the Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management. Revenue Recognition Nature of goods and services The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: 1) Infrastructure as a Service (IaaS) and Disaster Recovery Revenue Infrastructure as a Service (IaaS) provides clients the ability to migrate compute and store on DSC enterprise level technical assets in Tier 3 data centers. DSC provides a turnkey solution whereby achieving reliable and cost-effective, multi-tenant IBM Power compute, flash storage, disaster recovery and cyber security while eliminating client capital expenditures. Clients can subscribe to disaster recovery solutions without subscribing to IaaS. Product offerings provided directly from DSC are High Availability, Data Vaulting and DRaaS type solutions, including standby servers which allows clients to centralize and streamline their mission critical digital information and technical environment. clients' data is vaulted, maintenance of retention schedules for corporate governances and regulations to meet their back to work objective in a disaster. 2) Managed Services These services are performed at the inception of a contract. The Company offers professional assistance to its clients during the installation processes. On-boarding and set-up services ensure that the solution or software is installed properly and function as designed to provide clients with the best solutions. In addition, clients that are managed service clients have a requirement for DSC to offer time and material billing. The Company also derives both one time and subscription-based revenue, from providing support, management and renewal of software, hardware, third party maintenance contracts and third-party cloud services to clients. The managed services include help desk, remote access, annual recovery tests and manufacturer support for equipment and on-gong monitoring of client system performance. 3) Equipment and Software Revenue The Company provides equipment and software and actively participate in collaboration with IBM to provide innovative business solutions to clients. The Company is a partner of IBM and the various software, infrastructure and hybrid cloud solutions provided to clients. Disaggregation of revenue In the following table, revenue is disaggregated by major product line, geography, and timing of revenue recognition. Schedule of revenue is disaggregated by major product For the Three Months Ended June 30, 2021 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 1,685,951 $ 39,212 $ 1,725,163 Equipment and Software 760,451 — 760,451 Managed Services 809,487 — 809,487 Nexxis VoIP Services 183,118 — 183,118 Other 50,030 — 50,030 Total Revenue $ 3,489,037 $ 39,212 $ 3,528,249 For the Three Months Ended June 30, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 1,340,437 $ 42,433 $ 1,382,870 Equipment and Software 247,187 — 247,187 Managed Services 219,392 — 219,392 Nexxis VoIP Services 153,887 — 153,887 Other 2,289 — 2,289 Total Revenue $ 1,963,192 $ 42,433 $ 2,005,625 For the Three Months Ended June 30, Timing of revenue recognition 2021 2020 Products transferred at a point in time $ 937,178 $ 247,187 Products and services transferred over time 2,591,071 1,758,438 Total Revenue $ 3,528,249 $ 2,005,625 For the Six Months Ended June 30, 2021 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 3,307,949 $ 69,787 $ 3,385,511 Equipment and Software 1,225,334 — 1,225,334 Managed Services 1,036,254 — 1,036,254 Nexxis VoIP Services 378,444 — 378,444 Other 77,265 — 77,265 Total Revenue $ 6,025,246 $ 69,787 $ 6,102,940 For the Six Months Ended June 30, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,689,558 $ 87,032 $ 2,776,590 Equipment and Software 575,928 — 575,928 Managed Services 439,867 — 439,867 Nexxis VoIP Services 307,084 — 307,084 Other 4,866 — 4,866 Total Revenue $ 4,017,303 $ 87,032 $ 4,104,335 For the Six Months Ended June 30, Timing of revenue recognition 2021 2020 Products transferred at a point in time $ 1,511,751 $ 575,928 Products and services transferred over time 4,591,189 3,528,407 Total Revenue $ 6,102,940 $ 4,104,335 Contract receivables are recorded at the invoiced amount and are uncollateralized, non-interest-bearing client obligations. Provisions for estimated uncollectible accounts receivable are made for individual accounts based upon specific facts and circumstances including criteria such as their age, amount, and client standing. Sales are generally recorded in the month the service is provided. For clients who are billed on an annual basis, deferred revenue is recorded and amortized over the life of the contract. Transaction price allocated to the remaining performance obligations The Company has the following performance obligations: 1) Data Vaulting 2) High Availability (“HA”) 3) Infrastructure as a Service (“IaaS”) 4) Internet 5) Support and Maintenance 6) Initial Implementation / Set-Up Fees 7) Equipment sales 9) License 2) High Availability (“HA”) 3) Infrastructure as a Service (“IaaS”) Disaster Recovery with Stand-By Servers, High Availability, Data Vaulting, IaaS, Message Logic, Support and Maintenance and Internet Subscription services such as the above allows clients to access a set of data or receive services for a predetermined period of time. As the client obtains access at a point in time but continues to have access for the remainder of the subscription period, the client is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the related performance obligation is considered to be satisfied ratably over the contract term. As the performance obligation is satisfied evenly across the term of the contract, revenue is recognized on a straight-line basis over the contract term. Initial Set-Up Fees The Company accounts for set-up fees as separate performance obligation. Set-up services are performed one time and accordingly the revenue is recognized at the point in time that the service is performed, and the Company is entitled to the payment. Equipment sales For the Equipment sales performance obligation, the control of the product transfers at a point in time (i.e., when the goods have been shipped or delivered to the clients' location, depending on shipping terms). Noting that the satisfaction of the performance obligation, in this sense, does not occur over time as defined within ASC 606-10-25-27 through 29, the performance obligation is considered to be satisfied at a point in time (ASC 606-10-25-30) when the obligation to the client has been fulfilled (i.e., when the goods have left the shipping facility or delivered to the client, depending on shipping terms). License – granting SSL certificates and other licenses In the case of licensing performance obligation, the control of the product transfers either at point in time or over time depending on the nature of the license. The revenue standard identifies two types of licenses of IP: a right to access IP and a right to use IP. To assist in determining whether a license provides a right to use or a right to access IP, ASC 606 defines two categories of IP: Functional and Symbolic. The Company’s license arrangements typically do not require the Company to make its proprietary content available to the client either through a download or through a direct connection. Throughout the life of the contract the Company does not continue to provide updates or upgrades to the license granted. Based on the guidance, the Company considers its license offerings to be akin to functional IP and recognizes revenue at the point in time the license is granted and/or renewed for a new period. Payment terms The terms of the contracts typical range from 12 to 36 months with auto-renew options. The Company invoices clients one month in advance for its services plus any overages or additional services. Warranties The Company offers guaranteed service levels and service guarantees on some of its contracts. These warrantees are not sold separately and according to ASC 606-10-50-12(a) are accounted as “assurance warranties”. Significant judgement In the instances that contracts have multiple performance obligations, the Company uses judgment to establish stand-alone price for each performance obligation separately. The price for each performance obligation is determined by reviewing market data for similar services as well as the Company’s historical pricing of each individual service. The sum of each performance obligation was calculated to determine the aggregate price for the individual services. Next the proportion of each individual service to the aggregate price was determined. That ratio was applied to the total contract price in order to allocate the transaction price to each performance obligation. Impairment of Long-Lived Assets In accordance with FASB ASC 360-10-35, the Company reviews its long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying value exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred $ 252,286 137,931 Stock Based Compensation DSC follows the requirements of FASB ASC 718-10-10, Share Based Payments The valuation methodology used to determine the fair value of the options issued during the period is the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common Stock and does not intend to pay dividends on its Common Stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best assessment. Estimated volatility is a measure of the amount by which DSC’s stock price is expected to fluctuate each year during the expected life of the award. DSC’s calculation of estimated volatility is based on historical stock prices of these entities over a period equal to the expected life of the awards. Net Income (Loss) Per Common Share In accordance with FASB ASC 260-10-5 Earnings Per Share, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) adjusted for income or loss that would result from the assumed conversion of potential common shares from contracts that may be settled in stock or cash by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The following table sets forth the information needed to compute basic and diluted earnings per share for the three and six months ended June 30, 2021 and 2020: Schedule of Earning per share basic and dilute For the Three Months Ended June 30, For the Six Months Ended 2021 2020 2021 2020 Net Income (Loss) Available to Common Shareholders $ 114,313 $ 155,705 $ 77,529 $ 87,109 Weighted average number of common shares – basic 3,981,402 3,213,485 3,607,909 3,212,822 Dilutive securities Options 134,254 140,770 — 140,770 Warrants 3,333 3,333 3,333 3,333 Weighted average number of common shares – diluted 4,118,989 3,357,589 3,611,242 3,356,926 Earnings (Loss) per share, basic $ 0.03 $ 0.05 $ 0.02 $ 0.03 Earnings (Loss) per share, diluted $ 0.03 $ 0.05 $ 0.02 $ 0.03 The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income (loss) per share net income (loss) per share because their effect was anti-dilutive: Schedule of anti-dilutive income (loss) per share Three Months ended June 30, Six Months ended June 30, 2021 2020 2021 2020 Options 66,901 69,875 201,155 69,875 Warrants 1,840,000 — 1,840,000 — 1,906,901 69,875 2,041,155 69,875 | Note 2 - Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of (i) the Company, (ii) its wholly-owned subsidiary, Data Storage Corporation, a Delaware corporation, and (iii) its majority-owned subsidiary, Nexxis Inc, a Nevada corporation. All significant inter-company transactions and balances have been eliminated in consolidation. Business combinations We account for business combinations under the acquisition method of accounting, which requires us to recognize separately from goodwill, the assets acquired, and the liabilities assumed at their acquisition date fair values. While we use our best estimates and assumptions to accurately value assets, acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of operations. Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include future expected cash flows from product sales, customer contracts and acquired technologies, and estimated cash flows from the projects when completed and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Recently Issued and Newly Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s consolidated financial statements upon the adoption of this ASU. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The adoption of ASU 2016-16 did not have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 Intangibles-Goodwill and Other (“ASC 350”): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests for fiscal years beginning after December 15, 2019 and an entity should apply the amendments of ASU 2017-04 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 did not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves the disclosure requirements for fair value measurements. The updated guidance was adopted on January 1, 2020 and did not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This guidance requires companies to apply the internal-use software guidance in Accounting Standards Codification (“ASC”) 350-40 to implementation costs incurred in a hosting arrangement that is a service contract to determine whether to capitalize certain implementation costs or expense them as incurred. The new guidance, is effective for fiscal years beginning after December 15, 2019. The adoption of ASU 2018-15 did not have a material impact on the consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Reclassifications Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. Fair Value Measurements The fair value measurement disclosures are grouped into three levels based on valuation factors: ● Level 1 – quoted prices in active markets for identical investments ● Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) ● Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments) The Company’s Level 1 assets/liabilities include cash, accounts receivable, accounts payable, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at December 31, 2020 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments. The Company’s Level 2 assets/liabilities include the Company’s notes payable and capital lease obligations. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace. The Company’s Level 3 assets/liabilities include goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. As such, the Company measures goodwill and intangible assets on a non-recurring basis. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. Cash, Cash Equivalents and Short-Term Investments The Company considers all highly liquid investments with an original maturity or remaining maturity at the time of purchase, of three months or less to be cash equivalents. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments and assets subjecting the Company to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable. The Company’s cash and cash equivalents are maintained at major U.S. financial institutions. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company’s customers are primarily concentrated in the United States. The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts on factors surrounding the credit risk of specific customers, historical trends, and other information. For the year ended December 31, 2020, DSC had three customers with an accounts receivable balance representing 45 38 Accounts Receivable/Allowance for Doubtful Accounts The Company sells its services to customers on an open credit basis. Accounts receivable are uncollateralized, non-interest-bearing customer obligations. Accounts receivables are typically due within 30 Property and Equipment Property and equipment is recorded at cost and depreciated over their estimated useful lives or the remaining term of the lease using the straight-line method for financial statement purposes. Estimated useful lives in years for depreciation are 5 7 Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At December 31, 2020 and 2019, the Company had a full valuation allowance against its deferred tax assets. Per FASB ASC 740-10, disclosure is not required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not possibility that the outcome will be unfavorable. Using this guidance, as of December 31, 2020 and 2019, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company’s 2019, 2018, 2017 and 2016 Federal and State tax returns remain subject to examination by their respective taxing authorities. Neither of the Company’s Federal or State tax returns are currently under examination. Goodwill and Other Intangibles In accordance with GAAP, the Company tests goodwill and other intangible assets for impairment on at least an annual basis. Goodwill impairment exists if the net book value of a reporting unit exceeds its estimated fair value. The impairment testing is performed in two steps: (i) the Company determines impairment by comparing the fair value of a reporting unit with its carrying value, and (ii) if there is impairment, the Company measures the amount of impairment loss by comparing the implied fair value of goodwill with the carrying amount of that goodwill. To determine the fair value of these intangible assets, the Company uses many assumptions and estimates using a market participant approach that directly impact the results of the testing. In making these assumptions and estimates, the Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management. Revenue Recognition Nature of goods and services The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: 1) Infrastructure as a Service (IaaS) and Disaster Recovery Revenue Subscription services such as Infrastructure as a Service, Platform as a Service and Disaster Recovery, High Availability, Data Vault Services and DRaaS type solutions (cloud) allows clients to centralize and streamline their technical and mission critical digital information and technical environment. Clients' data can be backed up, replicated, archived and restored to meet their back to work objective in a disaster. Infrastructure as a Service (IaaS) assist clients to achieve reliable and cost-effective computing and high availability solutions while eliminating or supplementing Capex. 2) Managed Services These services are performed at the inception of a contract. The Company offers professional assistance to its clients during the installation processes. On-boarding and set-up services ensure that the solution or software is installed properly and function as designed to provide clients with the best solutions. In addition, clients that are managed service clients have a requirement for DSC to offer time and material billing. The Company also derives revenues in the area from providing support and management of its software to clients. The managed services include help desk, remote access, annual recovery tests and manufacturer support for equipment and on-gong monitoring of client system performance. 3) Equipment and Software Revenue The Company provides equipment and software and actively participate in collaboration with IBM to provide innovative business solutions to clients. The Company is a partner of IBM and the various software solutions provided to clients. Disaggregation of revenue In the following table, revenue is disaggregated by major product line, geography, and timing of revenue recognition. Schedule of revenue is disaggregated by major product For the Year Ended December 31, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,691,133 $ 115,237 $ 5,806,370 Equipment and Software 2,074,911 — 2,074,911 Managed Services 380,701 — 380,701 Professional Fees 362,375 — 362,375 Nexxis VoIP Services 696,576 — 696,576 Total Revenue $ 9,205,696 $ 115,237 $ 9,320,933 For the Year Ended December 31, 2019 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,223,868 $ 213,816 $ 5,437,684 Equipment and Software 1,784,658 — 1,784,658 Managed Services 365,767 — 365,767 Professional Fees 411,475 — 411,475 Nexxis VoIP Services 484,024 — 484,024 Total Revenue $ 8,269,792 $ 213,816 $ 8,483,608 For the Year Ended December 31, Timing of revenue recognition 2020 2019 Products transferred at a point in time $ 2,817,987 $ 2,196,133 Products and services transferred over time 6,502,946 6,287,475 Total Revenue $ 9,320,933 $ 8,483,608 Contract receivables are recorded at the invoiced amount and are uncollateralized, non-interest-bearing client obligations. Provisions for estimated uncollectible accounts receivable are made for individual accounts based upon specific facts and circumstances including criteria such as their age, amount, and client standing. Sales are generally recorded in the month the service is provided. For clients who are billed on a quarterly or annual basis, deferred revenue is recorded and amortized over the life of the contract. Transaction price allocated to the remaining performance obligations The Company has the following performance obligations: 1) Disaster Recovery as a Service (“DRaaS”) 2) Data Vaulting 3) High Availability (“HA”) 4) Infrastructure as a Service (“IaaS”) 5) Message Logic 6) Internet 7) Support and Maintenance 8) Initial Set-Up Fees 9) Equipment sales 10) License Disaster Recovery with Stand-By Servers, High Availability, Data Vaulting, IaaS, Message Logic, Support and Maintenance, and Internet Subscription services such as the above allows clients to access a set of data or receive services for a predetermined period of time. As the client obtains access at a point in time but continues to have access for the remainder of the subscription period, the client is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the related performance obligation is considered to be satisfied ratably over the contract term. As the performance obligation is satisfied evenly across the term of the contract, revenue should be recognized on a straight-line basis over the contract term. Initial Set-Up Fees The Company accounts for set-up fees as separate performance obligation. Set-up services are performed one time and accordingly the revenue should be recognized at the point in time that the service is performed, and the Company is entitled to the payment. Equipment sales For the Equipment sales performance obligation, the control of the product transfers at a point in time (i.e., when the goods have been shipped or delivered to the clients' location, depending on shipping terms). Noting that the satisfaction of the performance obligation, in this sense, does not occur over time as defined within ASC 606-10-25-27 through 29, the performance obligation is considered to be satisfied at a point in time (ASC 606-10-25-30) when the obligation to the client has been fulfilled (i.e., when the goods have left the shipping facility or delivered to the client, depending on shipping terms). License – granting SSL certificates and other licenses In the case of Licensing performance obligation, the control of the product transfers either at point in time or over time depending on the nature of the license. The revenue standard identifies two types of licenses of IP: a right to access IP and a right to use IP. To assist in determining whether a license provides a right to use or a right to access IP, ASC 606 defines two categories of IP: Functional and Symbolic. The Company’s license arrangements typically do not require the Company to make its proprietary content available to the client either through a download or through a direct connection. Throughout the life of the contract the Company does not continue to provide updates or upgrades to the license granted. Based on the guidance, the Company considers its license offerings to be akin to functional IP and will recognize revenue at the point in time the license is granted and/or renewed for a new period. Payment terms The terms of the contracts typical range from 12 to 36 months with auto-renew options. The Company invoices clients one month in advance for its services plus any overages or additional services provided. Warranties The Company offers guaranteed service levels and performance and service guarantees on some of its contracts. These warrantees are not sold separately and according to ASC 606-10-50-12(a) are accounted as “assurance warranties”. Significant judgement In the instances that contract have multiple performance obligation, the Company uses judgment to establish stand-alone price for each performance obligation separately. The price for each performance obligation is determined by reviewing market data for similar services as well as the Company’s historical pricing of each individual service. The sum of each performance obligation was calculated to determine the aggregate price for the individual services. Next the proportion of each individual service to the aggregate price was determined. That ratio was applied to the total contract price in order to allocate the transaction price to each performance obligation. Impairment of Long-Lived Assets In accordance with FASB ASC 360-10-35, we review our long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying value exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred a net impact of $ 309,003 259,920 Stock Based Compensation DSC follows the requirements of FASB ASC 718-10-10, Share Based Payments The valuation methodology used to determine the fair value of the options issued during the year was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk- free interest rate, and the weighted average expected life of the options. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate. Estimated volatility is a measure of the amount by which DSC’s stock price is expected to fluctuate each year during the expected life of the award. DSC’s calculation of estimated volatility is based on historical stock prices of these entities over a period equal to the expected life of the awards. DSC uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price. Net Income (Loss) Per Common Share In accordance with FASB ASC 260-10-5 Earnings Per Share, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) adjusted for income or loss that would result from the assumed conversion of potential common shares from contracts that may be settled in stock or cash by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The following table sets forth the information needed to compute basic and diluted earnings per share for the years ended December 31, 2020 and 2019: Schedule of Earnings Per Share, Basic and Diluted December 31, 2020 2019 Net Income (Loss) Available to Common Shareholders $ 55,339 $ (54,452 ) Weighted average number of common shares - basic 3,213,157 3,203,917 Dilutive securities Options 149,520 — Warrants 3,333 — Weighted average number of common shares - diluted 3,366,010 3,203,917 Earnings (Loss) per share, basic $ 0.02 $ 0.02 Earnings (Loss) per share, diluted $ 0.02 $ 0.02 The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income (loss) per share net income (loss) per share because their effect was anti-dilutive: Schedule of anti-dilutive income (loss) per share December 31, 2020 2019 Options 58,129 210,646 Warrants 3,333 3,333 61,462 213,979 |
Property and Equipment
Property and Equipment | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | Note 3 - Property and Equipment Property and equipment, at cost, consist of the following: Schedule of property and equipment June 30, December 31, 2021 2020 Storage equipment $ 476,887 $ 756,236 Website and software — 533,417 Furniture and fixtures 27,850 17,441 Leasehold improvements 20,983 20,983 Computer hardware and software 299,867 1,236,329 Data center equipment 5,502,288 5,281,017 6,327,875 7,845,423 Less: Accumulated depreciation (4,177,560 ) (5,543,822 ) Net property and equipment $ 2,150,315 $ 2,301,601 Depreciation expense for the six months ended June 30, 2021 and 2020 was $ 479,768 397,467 | Note 3 - Property and Equipment Property and equipment, at cost, consist of the following: Schedule of property and equipment December 31, 2020 2019 Storage equipment $ 756,236 $ 756,236 Website and software 533,417 533,417 Furniture and fixtures 17,441 27,131 Leasehold improvements 20,983 16,846 Computer hardware and software 1,236,329 1,218,464 Data center equipment 5,281,017 4,341,993 7,845,423 6,894,087 Less: Accumulated depreciation 5,543,822 4,705,256 Net property and equipment $ 2,301,601 $ 2,188,831 Depreciation expense for the years ended December 31, 2020 and 2019 was $ 838,566 699,918 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill and Intangible Assets | Note 4 - Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following: Schedule of goodwill and intangible assets June 30, 2021 Estimated life Accumulated in years Gross amount Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 13,216,040 $ — $ 13,216,040 Trademarks Indefinite 294,268 — 294,268 Total intangible assets not subject to amortization 13,510,308 — 13,510,308 Intangible assets subject to amortization Customer lists 5 15 744,099 744,099 — ABC acquired contracts 5 310,000 289,334 20,666 SIAS acquired contracts 5 660,000 616,000 44,000 Non-compete agreements 4 272,147 272,147 — Website and Digital Assets 3 33,002 274 32,728 Total intangible assets subject to amortization 2,019,248 1,921,854 97,394 Total Goodwill and Intangible Assets $ 15,529,556 $ 1,921,854 $ 13,607,702 Scheduled amortization over the next three years are as follows: Schedule of amortization over the next two years Twelve months ending June 30, 2022 $ 75,575 2023 10,909 2024 10,910 Total $ 97,394 Amortization expense for the six months ended June 30, 2021 and 2020 were $ 97,275 98,667 | Note 4 - Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following: Schedule of goodwill and intangible assets December 31, 2020 Estimated life in years Gross amount Accumulated Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 3,015,700 $ — $ 3,015,700 Trademarks Indefinite 294,268 — 294,268 Total intangible assets not subject to amortization 3,309,968 — 3,309,968 Intangible assets subject to amortization Customer lists 5 15 897,274 897,274 — ABC acquired contracts 5 310,000 258,333 51,667 SIAS acquired contracts 5 660,000 550,000 110,000 Non-compete agreements 4 272,147 272,147 - Total intangible assets subject to amortization 2,139,421 1,977,754 161,667 Total Goodwill and Intangible Assets $ 5,449,389 $ 1,977,754 $ 3,471,635 The scheduled remaining amortization is as follows: Schedule of amortization over the next two years Years ending December 31, 2021 $ 161,667 Total $ 161,667 Amortization expense for the years ended December 31, 2020 and 2019 were $ 194,000 196,779 |
Leases
Leases | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Leases | Note 5 – Leases Operating Leases The Company currently has two leases for office space located in Melville, NY. The first lease for office space in Melville, NY commenced on September 1, 2019. The term of this lease is for three years and eleven months and runs co-terminus with our existing lease in the same building. The base annual rent is $10,764 payable in equal monthly installments of $897. A second lease for office space in Melville, NY, was entered into on November 20, 2017, which commenced on April 2, 2018. The term of this lease is five years and three months at $ 86,268 July 31, 2023 The lease for office space in Warwick, RI, called for monthly payments of $ 2,324 2,460 January 31, 2019 January 31, 2021 31,176 2,598 The Company leases rack space in New York, Massachusetts and North Carolina. These leases are month to month and the monthly rent is approximately $ 25,000 In 2020, the Company entered into a new rack space lease agreement in Dallas, TX. The lease term is 13 1,905 July 31, 2023 Finance Lease Obligations On June 1, 2020, the Company entered into a lease agreement with Arrow Capital Solutions, Inc. to lease equipment. The lease obligation is payable to Arrow Capital Solutions with monthly installments of $ 5,008 On June 29, 2020, the Company entered into a lease agreement with Arrow Capital Solutions, Inc. to lease equipment. The lease obligation is payable to Arrow Capital Solutions with monthly installments of $5,050. The lease carries an interest rate of 7% and is a three-year lease. The term of the lease ends June 29, 2023 On July 31, 2020, the Company entered into a lease agreement with Arrow Capital Solutions, Inc. to lease equipment under a finance lease. The lease obligation is payable to Arrow Capital Solutions with monthly installments of $ 4,524 7 Finance Lease Obligations – Related Party On April 1, 2018, the Company entered into a lease agreement with Systems Trading Inc. (“Systems Trading”) to refinance all equipment leases into one lease. This lease obligation is payable to Systems Trading with bi-monthly installments of $ 23,475 April 16, 2022 On January 1, 2019, the Company entered into a lease agreement with Systems Trading. This lease obligation is payable to Systems Trading with monthly installments of $ 29,592 6.75 5 On April 1, 2019, the Company entered into two lease agreements with Systems Trading to add new data center equipment. The first lease calls for monthly installments of $ 1,328 March 1, 2022 7 461 March 1, 2022 6.7 On January 1, 2020, the Company entered into a new lease agreement with Systems Trading to lease equipment. The lease obligation is payable to Systems Trading with monthly installments of $ 10,534 6 January 1, 2023 On March 4, 2021, the Company entered into a new lease agreement with Systems Trading effective April 1, 2021. This lease obligation is payable to Systems Trading with monthly installments of $ 1,567 March 31, 2024 8 The Company determines if an arrangement contains a lease at inception. Right of Use “ROU” assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company’s lease term includes options to extend the lease when it is reasonably certain that it will exercise that option. Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient . ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. A discount rate of 7 The components of lease expense were as follows: Components of lease expense Six Months Ended Finance leases: Amortization of assets, included in depreciation and amortization expense $ 677,505 Interest on lease liabilities, included in interest expense 102,539 Operating lease: Amortization of assets, included in total operating expense 51,762 Interest on lease liabilities, included in total operating expense 8,197 Total net lease cost $ 840,000 Supplemental balance sheet information related to leases was as follows Operating Leases Operating lease ROU asset $ 198,549 Current operating lease liabilities 106,102 Noncurrent operating lease liabilities 102,407 Total operating lease liabilities $ 208,509 June 30, 2021 Finance leases: Property and equipment, at cost $ 4,416,665 Accumulated amortization (2,516,643 ) Property and equipment, net 1,900,022 Current obligations of finance leases $ 1,147,355 Finance leases, net of current obligations 765,102 Total finance lease liabilities $ 1,912,457 Supplemental cash flow and other information related to leases was as follows: Supplemental balance sheet information related to leases Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 43,362 Financing cash flows related to finance leases $ 677,505 Weighted average remaining lease term (in years): Operating leases 1.22 Finance leases 1.82 Weighted average discount rate: Operating leases 7 % Finance leases 6 % Long-term obligations under the operating and finance leases at June 30, 2021 mature as follows: Long-term obligations under the operating and Finance leases For the Twelve Months Ended June 30, Operating Leases Finance Leases 2022 $ 106,102 1,209,750 2023 109,365 622,949 2024 9,395 242,341 Total lease payments 224,863 2,075,040 Less: Amounts representing interest (16,354 ) (162,584 ) Total lease obligations 208,509 1,912,457 Less: Current (106,102 ) (1,273,587 ) $ 102,407 $ 765,102 As of June 30, 2021, the Company had no additional significant operating or finance leases that had not yet commenced. Rent expense under all operating leases for the six months ended June 30, 2021 and 2020 was $ 41,894 79,510 | Note 5 – Leases Operating Leases The Company currently has three leases for office space, with two offices located in Melville, NY, and one office in Warwick, RI. The first lease for office space in Melville, NY, was assumed as part of the Company’s acquisition of ABC in 2016 and called for monthly payments of $ 8,382 August 31, 2019 3.92 10,764 897 A second lease for office space in Melville, NY, was entered into on November 20, 2017, which commenced on April 2, 2018. The term of this lease is five years 5.25 86,268 July 31, 2023 The lease for office space in Warwick, RI, calls for monthly payments of $ 2,324 2,460 January 31, 2019 January 31, 2020 31,176 2,598 The Company leases rack space in New York, Massachusetts and North Carolina. These leases are month to month and the monthly rent is approximately $ 25,000 In 2020 the Company entered into a new rack space lease agreement in Dallas, TX. The lease term is 13 1,905 Finance Lease Obligations On June 1, 2020, the Company entered into a lease agreement with Arrow Capital Solutions, Inc. to lease equipment. The lease obligation is payable to Arrow Capital Solutions with monthly installments of $ 5,008 7 3 On June 29, 2020, the Company entered into a lease agreement with Arrow Capital Solutions, Inc. to lease equipment. The lease obligation is payable to Arrow Capital Solutions with monthly installments of $5,050. The lease carries an interest rate of 7 3 On July 31, 2020, the Company entered into a lease agreement with Arrow Capital Solutions, Inc. to lease equipment under a finance lease. The lease obligation is payable to Arrow Capital Solutions with monthly installments of $ 4,524 7 3 Finance Lease Obligations – Related Party On April 1, 2018, the Company entered into a lease agreement with Systems Trading Inc. (“Systems Trading”) to refinance all leases into one lease. This lease obligation is payable to Systems Trading with bi-monthly installments of $ 23,475 5 4 April 16, 2022 On January 1, 2019, the Company entered into a lease agreement with Systems Trading. This lease obligation is payable to Systems Trading with monthly installments of $ 29,592 6.75 5 December 31, 2023 On April 1, 2019, the Company entered into two lease agreements with Systems Trading to add new data center equipment. The first lease calls for monthly payments of $ 1,328 March 1, 2022 7 461 March 1, 2022 6.7 On January 1, 2020, the Company entered into a new lease agreement with Systems Trading Inc. to lease equipment. The lease obligation is payable to Systems Trading with monthly installments of $ 10,534 6 3 January 1, 2023 We determine if an arrangement contains a lease at inception. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Our lease term includes options to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. We recognize lease expense for these leases on a straight-line basis over the lease term. We recognize variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. A discount rate of 7 The components of lease expense were as follows: Components of lease expense Year Ended Finance lease: Amortization of assets, included in depreciation and amortization expense $ 814,572 Interest on lease liabilities, included in interest expense 154,858 Operating lease: Amortization of assets, included in total operating expense 101,504 Interest on lease liabilities, included in total operating expense 20,763 Total net lease cost $ 1,091,697 Supplemental balance sheet information related to leases was as follows Operating Leases Supplemental balance sheet information related to leases Operating lease ROU asset $ 241,911 Current operating lease liabilities 104,549 Noncurrent operating lease liabilities 147,525 Total operating lease liabilities $ 252,074 December 31, 2020 Finance leases: Property and equipment, at cost $ 4,366,665 Accumulated amortization (2,267,449 ) Property and equipment, net 2,099,216 Current obligations of finance leases $ 1,317,542 Finance leases, net of current obligations 1,222,420 Total finance lease liabilities $ 2,539,962 Supplemental cash flow and other information related to leases was as follows: Supplemental cash flow and other information related to leases Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 80,743 Financing cash flows related to finance leases $ 774,971 Weighted average remaining lease term (in years): Operating leases 1.72 Finance leases 2.12 Weighted average discount rate: Operating leases 7 % Finance leases 6 % Long-term obligations under the operating and finance leases at December 31, 2020 mature as follows: Long-term obligations under the operating and Finance leases For the Year ending December 31, Operating Leases Finance Leases 2021 $ 104,549 $ 1,462,239 2022 107,718 849,427 2023 64,357 441,724 2024 — — 2025 — — Total lease payments 276,625 2,753,390 Less: Amounts representing interest (24,551 ) (213,428 ) Total lease obligations 252,074 2,539,962 Less: Current (104,549 ) (1,317,542 ) $ 147,525 $ 1,222,420 As of December 31, 2020, we had no additional significant operating or finance leases that had not yet commenced. Rent expense under all operating leases for the years ended December 31, 2020 and 2019 were $ 169,716 251,814 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Note 6 - Commitments and Contingencies COVID-19 The COVID-19 pandemic has created significant worldwide uncertainty, volatility and economic disruption. The extent to which COVID-19 will adversely impact the Company’s business, financial condition and results of operations is dependent upon numerous factors, many of which are highly uncertain, rapidly changing and uncontrollable. These factors include, but are not limited to: (i) the duration and scope of the pandemic; (ii) governmental, business and individual actions that have been and continue to be taken in response to the pandemic, including travel restrictions, quarantines, social distancing, work-from-home and shelter-in-place orders and shut-downs; (iii) the impact on U.S. and global economies and the timing and rate of economic recovery; (iv) potential adverse effects on the financial markets and access to capital; (v) potential goodwill or other impairment charges; (vi) increased cybersecurity risks as a result of pervasive remote working conditions; and (vii) the Company’s ability to effectively carry out its operations due to any adverse impacts on the health and safety of its employees and their families. Under NYS Executive Order 202.6, “Essential Business,” DSC is an “Essential Business” based on the following in the Executive order number 2: Essential infrastructure including telecommunications and data centers; and, number 12: Vendors that provide essential services or products, including logistics and technology support. Further, as a result of the pandemic, all employees, including the Company’s specialized technical staff, are working remotely or in a virtual environment. DSC always maintains the ability for team members to work virtually and the Company will continue to stay virtual, until the State and or the Federal government indicate the environment is safe to return to work. The significant increase in remote working, particularly for an extended period of time, could exacerbate certain risks to the Company’s business, including an increased risk of cybersecurity events and improper dissemination of personal or confidential information, though the Company does not believe these circumstances have, or will, materially adversely impact its internal controls or financial reporting systems. If the COVID-19 pandemic should worsen, the Company may experience disruptions to our business including, but not limited to: equipment, its workforce, or to its business relationships with other third parties. The extent to which COVID-19 impacts the Company’s operations or those of its third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. Any such disruptions or losses we incur could have a material adverse effect on the Company’s financial results and our ability to conduct business as expected. Revolving Credit Facility On January 31, 2008, the Company entered into a revolving credit line with a bank. The credit facility provides for $ 100,000 0.5 0 24 | Note 6 - Commitments and Contingencies COVID 19 The COVID-19 pandemic has created significant worldwide uncertainty, volatility and economic disruption. The extent to which COVID-19 will adversely impact our business, financial condition and results of operations is dependent upon numerous factors, many of which are highly uncertain, rapidly changing and uncontrollable. These factors include, but are not limited to: (i) the duration and scope of the pandemic; (ii) governmental, business and individual actions that have been and continue to be taken in response to the pandemic, including travel restrictions, quarantines, social distancing, work-from-home and shelter-in-place orders and shut-downs; (iii) the impact on U.S. and global economies and the timing and rate of economic recovery; (iv) potential adverse effects on the financial markets and access to capital; (v) potential goodwill or other impairment charges; (vi) increased cybersecurity risks as a result of pervasive remote working conditions; and (vii) our ability to effectively carry out our operations due to any adverse impacts on the health and safety of our employees and their families. Under NYS Executive Order 202.6, “Essential Business,” DSC is an “Essential Business” based on the following in the Executive order number 2: Essential infrastructure including telecommunications and data centers; and, number 12: Vendors that provide essential services or products, including logistics and technology support. Further, as a result of the pandemic, all employees, including the Company’s specialized technical staff, are working remotely or in a virtual environment. DSC always maintains the ability for team members to work virtual and the Company will continue to stay virtual, until the State and or the Federal government indicate the environment is safe to return to work. The significant increase in remote working, particularly for an extended period of time, could exacerbate certain risks to the Company’s business, including an increased risk of cybersecurity events and improper dissemination of personal or confidential information, though the Company does not believe these circumstances have, or will, materially adversely impact its internal controls or financial reporting systems. If the COVID-19 pandemic should worsen, the Company may experience disruptions to our business including, but not limited to equipment, to its workforce, or to its business relationships with other third parties. The extent to which COVID-19 impacts the Company’s operations or those of its third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. Any such disruptions or losses we incur could have a material adverse effect on the Company’s financial results and our ability to conduct business as expected. Revolving Credit Facility On January 31, 2008, the Company entered into a revolving credit line with a bank. The credit facility provides for $ 100,000 0.5 24 75,000 |
Long Term Debt
Long Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long Term Debt | Note 7 – Long Term Debt In connection with the Company’s October 2012 acquisition of certain assets (the “ML Assets”) of Message Logic, Inc. (“Message Logic”), the Company maintained ownership of the ML Assets subject to a security interest in the ML Assets held by a third party banking institution (the “Bank”) in connection with a secured loan made by the Bank to Message Logic in June 2012 in the amount of $350,000 (the “ML Loan”). The Bank filed a UCC-1 Financing Statement with the Secretary of State of Delaware perfecting its interest in the ML Assets (the “UCC-1 Filing”). On September 5, 2014, the Company entered into an agreement with Message Logic and the Bank pursuant to which the Company paid to the Bank the outstanding interest amount due on the ML Loan over seven months at $3,910 per month. In addition, the Company agreed to continue to make monthly interest-only payments to the Bank at $1,553 per month. 350,000 On April 30, 2020, the Company was granted a loan from a banking institution, in the principal amount of $ 481,977 April 30, 2022 1.00 As of December 31, 2020, if not forgiven, remaining scheduled principal payments due on notes payable are as follows: Schedule of principal payments due on notes payable Year ending December 31, 2021 $ 374,871 2022 107,106 $ 481,977 |
Stockholders_ (Deficit)
Stockholders’ (Deficit) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Stockholders’ (Deficit) | Note 8 - Stockholders’ (Deficit) Capital Stock The Company has 260,000,000 250,000,000 .001 10,000,000 .001 On March 8, 2021 the Company’s shareholders approved an amendment to the Company’s articles of incorporation, as amended, to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, at a ratio to be determined at the discretion of the Board of Directors within a range of one (1) share of common stock for every two (2) to sixty (60) shares of common stock, such amendment to be effected only in the event the Board of Directors still deems it advisable. On May 13, 2021, the Company’s registration statement on Form S-1 (File No. 333-23506) was declared effective (the “S-1 Registration Statement”). On May 13, 2021, the Company filed a registration statement on Form S-1 (File No. 333-256111) with the “Securities and Exchange Commission pursuant to Rule 462(b) of the Securities Act of 1933, as amended to register additional securities which was immediately declared effective. On May 6, 2021 the Company filed with the Securities and Exchange Commission Amendment No. 4 to Form S-1 - Registration Statement Under the Securities Act of 1993 to offer 1,162,790 Units (Each Unit Consisting of One Share of Common Stock and One Warrant to Purchase One Share of Common Stock). On May 13, 2021, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC, as representative of the several underwriters named therein (the “Representative”), for an underwritten public offering (the “Offering”) of an aggregate of 1,600,000 .001 7.425 The public offering price was $6.75 per Unit and the underwriters agreed to purchase 1,600,000 Units at an 7.5% discount to the public offering price. The Company granted the Representative a 45-day option to purchase an additional 240,000 shares of Common Stock and/or an additional 240,000 Warrants, in any combination thereof, to cover over-allotments, . On May 15, 2021, the Representative exercised the over-allotment option to purchase an additional 240,000 Warrants to purchase 240,000 shares of Common Stock. The gross proceeds from the Offering were $10.8 million. Pursuant to the Underwriting Agreement, the Company issued warrants to purchase up to a total of 80,000 7.425 The Underwriting Agreement contains customary representations, warranties, and covenants by the Company and customary conditions to closing, obligations of the parties and termination provisions. Additionally, under the terms of the Underwriting Agreement, the Company has agreed to indemnify the underwriters for losses, expenses and damages arising out of or in connection with the Offering, including for liabilities under the Securities Act, or contribute to payments the underwriters may be required to make with respect to these liabilities. Pursuant to the Underwriting Agreement, subject to certain exceptions, each director and executive officer of the Company and certain of its stockholders have agreed to a 180-day “lock-up” from the date of the closing of the Offering of shares of Common Stock that they beneficially own, and the Company agreed to a 120-day lock-up, not to offer, sell, contract to sell, pledge or otherwise dispose of any shares of Common Stock or securities convertible into Common Stock, without first obtaining the consent of the Representative. On May 14, 2021, the Company effected a 1-for-40 reverse stock split. As a result, all share information in the accompanying condensed financial statements has been adjusted as if the reverse stock split happened on the earliest date presented. During the six months ended June 30, 2021, employees exercised 6,592 5,060 Common Stock Options A summary of the Company’s option activity and related information follows: Schedule of option activity and related information Number of Range of Weighted Weighted Options Outstanding at December 31, 2020 207,650 $ 2.0-16 $ 5.2 6.6 Options Granted — — — — Exercised (6,592 ) 2.0 2.0 — Expired/Cancelled — — — — Options Outstanding at June 30, 2021 201,155 $ 2.0-16 $ 5.53 6.12 Options Exercisable at June 30, 2021 201,155 $ 2.0-16 $ 5.53 6.12 Share-based compensation expense for options totaling $ 76,221 74,386 The valuation methodology used to determine the fair value of the options issued during the year was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the options. Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s calculation of estimated volatility is based on historical stock prices of the Company over a period equal to the expected life of the awards. As of June 30, 2021, there was $187,890 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.5 Preferred Stock Dividends Each share of Series A Preferred Stock, in preference to the holders of all common stock, shall entitle its holder to receive, but only out of funds that are legally available therefore, cash dividends at the rate of ten percent ( 10 1,401,786 43,806 1,179,357 0 | Note 8 - Stockholders’ (Deficit) Capital Stock The Company has 260,000,000 250,000,000 .001 10,000,000 .001 Common Stock Options 2010 Incentive Award Plan On August 12, 2010, the Company adopted the Data Storage Corporation 2010 Incentive Award Plan (the “2010 Plan”) that provided for 50,000 125,000 200,000 250,000 10 207,650 If an incentive award granted under the Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for future awards under the Plan. The number of shares subject to the Plan, and the number of shares and terms of any Incentive Award may be adjusted in the event of any change in our outstanding common stock by reason of any stock dividend, spin-off, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares, or similar transaction. A summary of the Company’s option activity and related information follows: Schedule of option activity and related information Number of Range of Weighted Weighted Options Outstanding at January 1, 2019 144,139 $ 0.08 – 26.00 $ 10.40 6.8 Options Granted 71,313 2.00 2.00 Exercised (100,000 ) 2.00 2.00 Expired/Cancelled (92,232 ) 2.00 2.00 Options Outstanding at December 31, 2019 210,646 $ 2.00 – 26.00 $ 6.80 7.5 Options Granted 8,750 4.80 – 5.20 5.20 Exercised (2,500 ) 2.00 2.00 Expire/Cancelled (9,246 ) 14.00 – 14.40 14.40 Options Outstanding at December 31, 2020 207,650 $ 2.00 – 15.60 $ 5.20 6.6 Options Exercisable at December 31, 2020 130,681 $ 2.00 – 15.60 $ 6.80 5.5 Share-based compensation expense for options totaling $ 158,728 15,342 The valuation methodology used to determine the fair value of the options issued during the year was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the options. Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price. As of December 31, 2020, there was $ 264,111 3 The weighted average fair value of options granted, and the assumptions used in the Black-Scholes model during the year ended December 31, 2020 and 2019 are set forth in the table below. Schedule of fair value of options by using Black-Scholes model 2020 2019 Weighted average fair value of options granted $ 5.20 $ 2.00 Risk-free interest rate 0.66 0.83 % 1.79 % Volatility 221 223 % 225 % Expected life (years) 10 10 Dividend yield 0.00 % 0.00 % Common Stock Warrants A summary of the Company’s warrant activity and related information follows: Schedule of warrant activity and related information Number of Range of Weighted Weighted Warrants Outstanding at January 1, 2019 3,333 $ 0.40 $ 0.40 5.5 Warrants Granted — — — Warrants Outstanding at December 31, 2019 3,333 $ 0.40 $ 0.40 4.5 Warrants Granted — — — Warrants Outstanding at December 31, 2020 3,333 $ 0.40 $ 0.40 3.5 Warrants Exercisable at December 31, 2020 3,333 $ 0.40 $ 0.40 3.5 Preferred Stock Liquidation preference Upon any liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, before any distribution or payment shall be made to the holders of any Common Stock, the holders of Series A Preferred Stock shall be entitled to be paid out of the assets of the Corporation legally available for distribution to stockholders, for each share of Series A Preferred Stock held by such holder, an amount per share of Series A Preferred Stock equal to the Original Issue Price for such share of Series A Preferred Stock plus all accrued and unpaid dividends on such share of Series A Preferred Stock as of the date of the Liquidation Event. Conversion The number of shares of Common Stock to which a share of Series A Preferred Stock may be converted shall be the product obtained by dividing the Original Issue Price of such share of Series A Preferred Stock by the then-effective Conversion Price (as defined herein) for such share of Series A Preferred Stock. The Conversion Price for the Series A Preferred Stock shall initially be equal to $0.80 and shall be adjusted from time to time. Voting Each holder of shares of Series A Preferred Stock shall be entitled to the number of votes, upon any meeting of the stockholders of the Corporation (or action taken by written consent in lieu of any such meeting) equal to the number of shares of Class B Common Stock into which such shares of Series A Preferred Stock could be converted. Dividends Each share of Series A Preferred Stock, in preference to the holders of all Common Stock (as defined below), shall entitle its holder to receive, but only out of funds that are legally available therefore, cash dividends at the rate of ten percent ( 10 1,115,674 970,997 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 - Income Taxes The components of deferred taxes are as follows: Deferred Tax Assets: Schedule of components of deferred taxes 2020 2019 Net operating loss carry-forward $ 1,313,000 $ 1,419,000 Less: valuation allowance (1,313,000 ) (1,419,000 ) Net deferred tax asset $ — $ — The Company had federal and state net operating tax loss carry-forwards of $ 4,725,000 4,325,000 In 2020 and 2019, net deferred tax assets did not change due to the full allowance. The gross amount of the asset is entirely due to the net operating loss carry forward. The realization of the tax benefits is subject to the sufficiency of taxable income in future years. The combined deferred tax assets represent the amounts expected to be realized before expiration. The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible profits. As a result of this analysis of all available evidence, both positive and negative, the Company concluded that it is more likely than not that its net deferred tax assets will ultimately not be recovered and, accordingly, a valuation allowance was recorded as of December 31, 2020 and 2019. The difference between the expected income tax expense (benefit) and the actual tax expense (benefit) computed by using the Federal statutory rate of 21% is as follows: Schedule of expected income tax expense (benefit) Year Ended December 31, 2020 2019 Expected income tax benefit (loss) at statutory rate of 21% $ 79,000 $ 22,000 State and local tax benefit (loss), net of federal 27,000 7,500 (106,000 ) Change in valuation account (4,000 ) (29,500 ) Income tax expense (benefit) $ — $ — |
Litigation
Litigation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation | Note 9 - Litigation We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting DSC, its common stock, any of its subsidiaries or of DSC’s or DSC’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. | Note 10 - Litigation The Company currently is not involved in any litigation that it believes could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting DSC, its common stock, any of its subsidiaries or of DSC’s or DSC’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | Note 10 - Related Party Transactions Finance Lease Obligations – Related Party During the three months ended June 30, 2021 the Company entered into one related party finance lease obligations. See Note 5 for details. Nexxis Capital LLC Charles Piluso (Chairman and CEO) and Harold Schwartz (President) collectively own 100% of Nexxis Capital LLC (“Nexxis Capital”). Nexxis Capital was formed to purchase equipment and provide leases to Nexxis Inc.’s customers. The Company received funds of $ 3,968 0 | Note 11 – Related Party Transactions Finance Lease Obligations – Related Party During the years ended December 31, 2020 and 2019 the Company entered into three different related party finance lease obligations. See Note 5 for details. Nexxis Capital LLC Charles Piluso and Harold Schwartz collectively own 100% of Nexxis Capital LLC (“Nexxis Capital”). Nexxis Capital was formed to purchase equipment and provide leases to Nexxis Inc.’s customers. The Company received funds of $ 37,954 12,794 |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 12 - Subsequent Events Subsequent to June 30, 2021, investors exercised 455,390 455,390 3,381,271 On July 21, 2021, the Company completed an equity offering whereas the Company sold 1,375,000 shares of common stock and 1,031,250 warrants for net proceeds of $7.6 million. The warrants have an exercise price of $6.14 and a term of five and a half years | Note 12 - Subsequent Events On January 31, 2021, the term of the lease for the Company’s location in Rhode Island expired. Employees from that location are now working remotely from their residences. Flagship Solutions, LLC On February 4, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Data Storage FL, LLC, a Florida limited liability company and the Company’s wholly-owned subsidiary (the “Merger Sub”), Flagship Solutions, LLC (“Flagship”), a Florida limited liability company, and the owners (collectively, the “Equityholders”) of all of the issued and outstanding limited liability company membership interests in Flagship (collectively, the “Equity Interests”), pursuant to which, upon the Closing (as defined below), the Company will acquire Flagship through the merger of Merger Sub with and into Flagship (the “Merger”), with Flagship being the surviving company in the Merger and becoming as a result its wholly-owned subsidiary. The closing of the Merger (the “Closing”) is expected to take place on or before May 31, 2021 (the “Outside Closing Date”). Pursuant to the Merger, all of the Equity Interests that are issued and outstanding immediately prior to the effectiveness of the filing of the Articles of Merger by Flagship and Merger Sub with the Secretary of State of the State of Florida, will be converted into the right to receive an aggregate amount equal to up to $10,500,000, consisting of $5,550,000, payable in cash, subject to reduction by the amount of any excluded liabilities assumed by the Company at Closing and subject to adjustment as set forth below in connection with a net working capital adjustment, and up to $4,950,000, payable in shares of the Company’s common stock, subject to reduction by the amount by which the valuation of Flagship (the “Flagship Valuation”), as calculated based on Flagship’s unaudited pro forma 2018 financial statements and audited 2019 and 2020 financial statements (the “2020 Audit”), is less than $10,500,000. In the event that the Flagship Valuation, as calculated based on the 2020 Audit, is less than $10,500,000, then, within fifteen (15) days after completion of the audit of Flagship’s financial statements for its 2019, 2020 and 2021 fiscal years (the “2021 Audit”), the Company has agreed to pay the Equityholders, in shares of the Company’s common stock, the amount by which the Flagship Valuation, as calculated based on the 2021 Audit, exceeds the sum of $5,550,000 and the value of the shares merger consideration paid by us to the Equityholders at Closing. The parties have agreed to indemnify each other for any losses that may be incurred by them as a result of their breach of any of their representations, warranties and covenants contained in the Merger Agreement. The Company’s indemnification obligations are capped at 20% of the aggregate merger consideration paid to the Equityholders for any breach of our representations and warranties contained in the Merger Agreement, other than the representations and warranties set forth under Section 4.1 (Existence; Good Standing; Authority; Enforceability), Section 4.2 (No Conflict) and Section 4.4 (Brokers) (herein, “Fundamental Representations”). The Company’s indemnification obligations in respect of any breach by the Company of the Fundamental Representations or in the event of our willful or intentional breach of the Merger Agreement (or acts of fraud), are not capped. Concurrently with the Closing, Flagship and Mark Wyllie, Flagship’s Chief Executive Officer, will enter into an Employment Agreement (the “Wyllie Employment Agreement”), which will become effective upon consummation of the Closing, pursuant to which Mr. Wyllie will continue to serve as Chief Executive Officer of Flagship following the Closing on the terms and conditions set forth therein. Flagship’s obligations under the Wyllie Employment Agreement will also be guaranteed by us. The Wyllie Employment Agreement will contain customary salary, bonus, employee benefits, severance and restrictive covenant provisions. In addition, pursuant to the Wyllie Employment Agreement, Mr. Wyllie will be appointed to serve as a member of the Board during the term of his employment thereunder. The Merger Agreement further provides that it may be terminated by Flagship and the Equityholders (a “Flagship Termination”) in the event we have not consummated an underwritten public offering of our securities or listed our shares of common stock on national securities exchange such as the Nasdaq, by the Outside Closing Date, as long as such failure was not due to the breach of, or non-compliance with, the Merger Agreement by the Company or any of the Equityholders. In the event of a Flagship Termination, the Company will be required to pay Flagship and the Equityholders an amount equal to two (2) times their reasonable, documented, out-of-pocket attorneys’ and accountants’ transaction fees and expenses incurred prior to such Flagship Termination in connection with the Merger, up to a maximum aggregate amount of $ 100,000 On March 4, 2021, the Company entered into a new lease agreement with Systems Trading effective April 1, 2021. This lease obligation is payable to Systems Trading with monthly installments of $ 1,567 March 31, 2024 8 On March 8, 2021 , 375,000 On March 8, 2021 , |
Reverse Stock Split
Reverse Stock Split | 12 Months Ended |
Dec. 31, 2020 | |
Reverse Stock Split | |
Reverse Stock Split | Note 13 – Reverse Stock Split On May 7, 2021, the Company filed a certificate of amendment to its articles of incorporation with the Secretary of State of the State of Nevada (the ‘Certificate of Amendment’) to effectuate a reverse stock split (the ‘Reverse Stock Split’) of its issued and outstanding shares of common stock and treasury shares on a 1-for-40 basis effective at 12:01 a.m. (Eastern Time) on May 14, 2021 (the ‘Effective Time’). As of the Effective Time, every 40 shares of issued and outstanding common stock and treasury stock was converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Instead, a holder of record of old common stock as of immediately prior to the Effective Time who was otherwise entitled to a fraction of a share was, in lieu thereof, issued an additional fraction of a share of common stock to round up to the next whole share. All share information in the accompanying condensed financial statements has been adjusted as if the reverse stock split happened on the earliest date presented. |
Note payable
Note payable | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Note payable | Note 7 – Note payable On April 30, 2020, the Company was granted a loan from a banking institution, in the principal amount of $ 481,977 April 30, 2022 1.00 On June 1, 2021 the Company assumed the PPP loan of Flagship Solutions, LLC in the amount of $307,300. During the six months ended June 30, 2021, the PPP loan was forgiven and the Company recorded a gain on forgiveness of debt on the Consolidated Statements of Operations. |
Merger
Merger | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Merger | Note 11 - Merger Flagship Solutions, LLC On February 4, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Data Storage FL, LLC, a Florida limited liability company and the Company’s wholly-owned subsidiary (the “Merger Sub”), Flagship Solutions, LLC (“Flagship”), a Florida limited liability company, and the owners (collectively, the “Equityholders”) of all of the issued and outstanding limited liability company membership interests in Flagship (collectively, the “Equity Interests”). The Company acquired Flagship on May 31, 2021, and became its wholly-owned subsidiary. Pursuant to the Merger, all of the Equity Interests that are issued and outstanding immediately prior to the effectiveness of the filing of the Articles of Merger by Flagship and Merger Sub with the Secretary of State of the State of Florida, was converted into the right to receive an aggregate amount equal to up to $10,500,000, consisting of $5,550,000, payable in cash, subject to reduction by the amount of any excluded liabilities assumed by the Company at Closing and subject to adjustment as set forth below in connection with a net working capital adjustment, and up to $4,950,000, payable in shares of the Company’s common stock, subject to reduction by the amount by which the valuation of Flagship (the “Flagship Valuation”), as calculated based on Flagship’s unaudited pro forma 2018 financial statements and audited 2019 and 2020 financial statements (the “2020 Audit”), is less than $10,500,000. In the event that the Flagship Valuation, as calculated based on the 2020 Audit, is less than $10,500,000, then, within fifteen (15) days after completion of the audit of Flagship’s financial statements for its 2019, 2020 and 2021 fiscal years (the “2021 Audit”), the Company has agreed to pay the Equityholders, in shares of the Company’s common stock, the amount by which the Flagship Valuation, as calculated based on the 2021 Audit, exceeds the sum of $5,550,000 and the value of the shares merger consideration paid by us to the Equityholders at Closing, subject to a cap of $4,950,000. In addition, the cash merger consideration paid by the Company to the Equityholders at Closing shall be adjusted, on a dollar-for-dollar basis, by the amount by which Flagship’s net working capital at Closing is more or is less than the target working capital amount specified in the Merger Agreement. Concurrently with the Closing, Flagship and Mark Wyllie, Flagship’s Chief Executive Officer, entered into an Employment Agreement, which was effective upon consummation of the Closing, pursuant to which Mr. Wyllie will continue to serve as Chief Executive Officer of Flagship following the Closing on the terms and conditions set forth therein. Flagship’s obligations under the Wyllie Employment Agreement will also be guaranteed by the Company. The Wyllie Employment Agreement provides for: (i) an annual base salary of $170,000, (ii) management bonuses comprised of twenty-five percent (25%) of Flagship’s net income available in free cash flow as determined in accordance with GAAP for each calendar quarter during the term, (iii) an agreement to issue him stock options of the Company, subject to approval by the Board, commensurate with his position and performance and reflective of the executive compensation plans that the Company has in place with its other subsidiaries of similar size to Flagship, (iv) life insurance benefits in the amount of $400,000, and (v) four weeks paid vacation. In the event Mr. Wyllie’s employment is terminated by him for good reason (as defined in the Wyllie Employment Agreement) or by Flagship without cause, he will be entitled to receive his annual base salary through the expiration of the initial three-year employment term and an amount equal to his last annual bonus paid, payable quarterly. Pursuant to the Wyllie Employment Agreement, we have agreed to elect Mr. Wyllie to the Board and the board of directors of Flagship to serve so long as he continues to be employed by the Company. The employment agreement contains customary non-competition provisions that apply during its term and for a period of two years after the term expires. In addition, pursuant to the Wyllie Employment Agreement, Mr. Wyllie will be appointed to serve as a member of the Company’s Board of Directors and the board of directors of Flagship to serve so long as he continues to be employed by us. Following the closing of the transaction, Flagship’s financial statements as of the Closing were consolidated with the Consolidated Financial Statements of the Company. These amounts are provisional and may be adjusted during the measurement period. The following sets forth the components of the purchase price: Schedule of Purchase price Purchase price: Cash paid to seller $ 6,149,343 Contingent Consideration - shares 4,950,000 Total purchase price 11,099,343 Assets acquired: Cash 212,068 Accounts Receivable 1,389,263 Prepaid Expenses 127,574 Fixed Assets 4,986 Website and Digital Assets 33,002 Security Deposits 22,500 Total assets acquired 1,789,393 Liabilities assumed: Accounts payable and accrued expenses 514,354 Deferred Revenue 68,736 PPP Loan Payable 307,300 Total liabilities assumed 890,390 Net assets acquired 899,003 Excess purchase price $ 10,200,340 Due to the limited amount of time since the acquisition date, the assets and liabilities of Flagship were recorded based primarily on their acquisition date carrying values. Management believes the estimated fair value of these accounts on the acquisition date approximates their carrying value as reflected in the table above due to the short-term nature of these instruments. The remaining assets and liabilities primarily consisted of goodwill and customer relationships. We will adjust the remaining assets and liabilities to fair value as valuations are completed and we obtain information necessary to complete the analyses, but no later than one year from the acquisition data. For purposes of the preliminary allocation of the purchase price, the excess purchase price has been recorded as goodwill. The following presents the unaudited pro-forma combined results of operations of the Company with Flagship Solutions as if the entities were combined on January 1, 2020. Schedule of unaudited pro-forma Three Months Ended June 30, 2020 Revenues $ 4,612,967 Net income attributable to common shareholders $ 437,524 Net income per share $ 0.12 Weighted average number of shares outstanding 3,751,825 Six Months Ended June 30, 2020 Revenues $ 9,613,734 Net income attributable to common shareholders $ 304,889 Net income per share $ 0.08 Weighted average number of shares outstanding 3,751,825 Three Months Ended June 30, 2021 Revenues $ 7,759,779 Net income attributable to common shareholders $ 1,288,367 Net income per share $ 0.41 Weighted average number of shares outstanding 3,751,825 Six Months Ended June 30, 2021 Revenues $ 14,270,565 Net income attributable to common shareholders $ 1,202,704 Net income per share $ 0.32 Weighted average number of shares outstanding 3,751,825 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Principles of Consolidation | Principles of Consolidation The Condensed Consolidated Financial statements include the accounts of (i) the Company, (ii) its wholly-owned subsidiaries, Data Storage Corporation, a Delaware corporation, and Data Storage FL, LLC, a Florida limited liability company, (iii) Flagship Solutions, LLC, a Florida limited liability company, | Principles of Consolidation The consolidated financial statements include the accounts of (i) the Company, (ii) its wholly-owned subsidiary, Data Storage Corporation, a Delaware corporation, and (iii) its majority-owned subsidiary, Nexxis Inc, a Nevada corporation. All significant inter-company transactions and balances have been eliminated in consolidation. |
Business combinations | Business combinations We account for business combinations under the acquisition method of accounting, which requires us to recognize separately from goodwill, the assets acquired, and the liabilities assumed at their acquisition date fair values. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of operations. Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include future expected cash flows from product sales, customer contracts and acquired technologies, and estimated cash flows from the projects when completed and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. | Business combinations We account for business combinations under the acquisition method of accounting, which requires us to recognize separately from goodwill, the assets acquired, and the liabilities assumed at their acquisition date fair values. While we use our best estimates and assumptions to accurately value assets, acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of operations. Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include future expected cash flows from product sales, customer contracts and acquired technologies, and estimated cash flows from the projects when completed and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. |
Recently Issued and Newly Adopted Accounting Pronouncements | Recently Issued and Newly Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU. | Recently Issued and Newly Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s consolidated financial statements upon the adoption of this ASU. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The adoption of ASU 2016-16 did not have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 Intangibles-Goodwill and Other (“ASC 350”): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests for fiscal years beginning after December 15, 2019 and an entity should apply the amendments of ASU 2017-04 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 did not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves the disclosure requirements for fair value measurements. The updated guidance was adopted on January 1, 2020 and did not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This guidance requires companies to apply the internal-use software guidance in Accounting Standards Codification (“ASC”) 350-40 to implementation costs incurred in a hosting arrangement that is a service contract to determine whether to capitalize certain implementation costs or expense them as incurred. The new guidance, is effective for fiscal years beginning after December 15, 2019. The adoption of ASU 2018-15 did not have a material impact on the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. |
Reclassifications | Reclassifications Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. | |
Fair Value Measurements | Fair Value Measurements The fair value measurement disclosures are grouped into three levels based on valuation factors: ● Level 1 – quoted prices in active markets for identical investments ● Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) ● Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments) The Company’s Level 1 assets/liabilities include cash, accounts receivable, accounts payable, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at December 31, 2020 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments. The Company’s Level 2 assets/liabilities include the Company’s notes payable and capital lease obligations. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace. The Company’s Level 3 assets/liabilities include goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. As such, the Company measures goodwill and intangible assets on a non-recurring basis. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity or remaining maturity at the time of purchase, of three months or less to be cash equivalents. | Cash, Cash Equivalents and Short-Term Investments The Company considers all highly liquid investments with an original maturity or remaining maturity at the time of purchase, of three months or less to be cash equivalents. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments and assets subjecting the Company to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable. The Company’s cash and cash equivalents are maintained at major U.S. financial institutions. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company’s customers are primarily concentrated in the United States. The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts on factors surrounding the credit risk of specific customers, historical trends, and other information. As of June 30, 2021, DSC had two customers with an accounts receivable balance representing 33 31 For the six months ended June 30, 2021 the Company had one customer that accounted for 15 14 | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments and assets subjecting the Company to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable. The Company’s cash and cash equivalents are maintained at major U.S. financial institutions. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company’s customers are primarily concentrated in the United States. The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts on factors surrounding the credit risk of specific customers, historical trends, and other information. For the year ended December 31, 2020, DSC had three customers with an accounts receivable balance representing 45 38 |
Accounts Receivable/Allowance for Credit Losses | Accounts Receivable/Allowance for Credit Losses The Company sells its services to customers on an open credit basis. Accounts receivable are uncollateralized, non-interest-bearing customer obligations. Accounts receivables are typically due within 30 | Accounts Receivable/Allowance for Doubtful Accounts The Company sells its services to customers on an open credit basis. Accounts receivable are uncollateralized, non-interest-bearing customer obligations. Accounts receivables are typically due within 30 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives or the term of the lease using the straight-line method for financial statement purposes. Estimated useful lives in years for depreciation are 5 to 7 years for property and equipment. Additions, betterments and replacements are capitalized, while expenditures for repairs and maintenance are charged to operations when incurred. As units of property are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income. During the six months ended June 30, 2021, the Company recorded a loss on disposal of equipment of $ 29,732 | Property and Equipment Property and equipment is recorded at cost and depreciated over their estimated useful lives or the remaining term of the lease using the straight-line method for financial statement purposes. Estimated useful lives in years for depreciation are 5 7 |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At June 30, 2021 and December 31, 2020, the Company had a full valuation allowance against its deferred tax assets. Per FASB ASC 740-10, disclosure is not required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not possibility that the outcome will be unfavorable. Using this guidance, as of December 31, 2020 and 2019, the Company has no | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At December 31, 2020 and 2019, the Company had a full valuation allowance against its deferred tax assets. Per FASB ASC 740-10, disclosure is not required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not possibility that the outcome will be unfavorable. Using this guidance, as of December 31, 2020 and 2019, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company’s 2019, 2018, 2017 and 2016 Federal and State tax returns remain subject to examination by their respective taxing authorities. Neither of the Company’s Federal or State tax returns are currently under examination. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles In accordance with GAAP, the Company tests goodwill and other intangible assets for impairment on at least an annual basis. Impairment exists if the carrying value of a reporting unit exceeds its estimated fair value. To determine the fair value of goodwill and intangible assets, the Company uses many assumptions and estimates using a market participant approach that directly impact the results of the testing. In making these assumptions and estimates, the Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management. | Goodwill and Other Intangibles In accordance with GAAP, the Company tests goodwill and other intangible assets for impairment on at least an annual basis. Goodwill impairment exists if the net book value of a reporting unit exceeds its estimated fair value. The impairment testing is performed in two steps: (i) the Company determines impairment by comparing the fair value of a reporting unit with its carrying value, and (ii) if there is impairment, the Company measures the amount of impairment loss by comparing the implied fair value of goodwill with the carrying amount of that goodwill. To determine the fair value of these intangible assets, the Company uses many assumptions and estimates using a market participant approach that directly impact the results of the testing. In making these assumptions and estimates, the Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management. |
Revenue Recognition | Revenue Recognition Nature of goods and services The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: 1) Infrastructure as a Service (IaaS) and Disaster Recovery Revenue Infrastructure as a Service (IaaS) provides clients the ability to migrate compute and store on DSC enterprise level technical assets in Tier 3 data centers. DSC provides a turnkey solution whereby achieving reliable and cost-effective, multi-tenant IBM Power compute, flash storage, disaster recovery and cyber security while eliminating client capital expenditures. Clients can subscribe to disaster recovery solutions without subscribing to IaaS. Product offerings provided directly from DSC are High Availability, Data Vaulting and DRaaS type solutions, including standby servers which allows clients to centralize and streamline their mission critical digital information and technical environment. clients' data is vaulted, maintenance of retention schedules for corporate governances and regulations to meet their back to work objective in a disaster. 2) Managed Services These services are performed at the inception of a contract. The Company offers professional assistance to its clients during the installation processes. On-boarding and set-up services ensure that the solution or software is installed properly and function as designed to provide clients with the best solutions. In addition, clients that are managed service clients have a requirement for DSC to offer time and material billing. The Company also derives both one time and subscription-based revenue, from providing support, management and renewal of software, hardware, third party maintenance contracts and third-party cloud services to clients. The managed services include help desk, remote access, annual recovery tests and manufacturer support for equipment and on-gong monitoring of client system performance. 3) Equipment and Software Revenue The Company provides equipment and software and actively participate in collaboration with IBM to provide innovative business solutions to clients. The Company is a partner of IBM and the various software, infrastructure and hybrid cloud solutions provided to clients. Disaggregation of revenue In the following table, revenue is disaggregated by major product line, geography, and timing of revenue recognition. Schedule of revenue is disaggregated by major product For the Three Months Ended June 30, 2021 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 1,685,951 $ 39,212 $ 1,725,163 Equipment and Software 760,451 — 760,451 Managed Services 809,487 — 809,487 Nexxis VoIP Services 183,118 — 183,118 Other 50,030 — 50,030 Total Revenue $ 3,489,037 $ 39,212 $ 3,528,249 For the Three Months Ended June 30, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 1,340,437 $ 42,433 $ 1,382,870 Equipment and Software 247,187 — 247,187 Managed Services 219,392 — 219,392 Nexxis VoIP Services 153,887 — 153,887 Other 2,289 — 2,289 Total Revenue $ 1,963,192 $ 42,433 $ 2,005,625 For the Three Months Ended June 30, Timing of revenue recognition 2021 2020 Products transferred at a point in time $ 937,178 $ 247,187 Products and services transferred over time 2,591,071 1,758,438 Total Revenue $ 3,528,249 $ 2,005,625 For the Six Months Ended June 30, 2021 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 3,307,949 $ 69,787 $ 3,385,511 Equipment and Software 1,225,334 — 1,225,334 Managed Services 1,036,254 — 1,036,254 Nexxis VoIP Services 378,444 — 378,444 Other 77,265 — 77,265 Total Revenue $ 6,025,246 $ 69,787 $ 6,102,940 For the Six Months Ended June 30, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,689,558 $ 87,032 $ 2,776,590 Equipment and Software 575,928 — 575,928 Managed Services 439,867 — 439,867 Nexxis VoIP Services 307,084 — 307,084 Other 4,866 — 4,866 Total Revenue $ 4,017,303 $ 87,032 $ 4,104,335 For the Six Months Ended June 30, Timing of revenue recognition 2021 2020 Products transferred at a point in time $ 1,511,751 $ 575,928 Products and services transferred over time 4,591,189 3,528,407 Total Revenue $ 6,102,940 $ 4,104,335 Contract receivables are recorded at the invoiced amount and are uncollateralized, non-interest-bearing client obligations. Provisions for estimated uncollectible accounts receivable are made for individual accounts based upon specific facts and circumstances including criteria such as their age, amount, and client standing. Sales are generally recorded in the month the service is provided. For clients who are billed on an annual basis, deferred revenue is recorded and amortized over the life of the contract. Transaction price allocated to the remaining performance obligations The Company has the following performance obligations: 1) Data Vaulting 2) High Availability (“HA”) 3) Infrastructure as a Service (“IaaS”) 4) Internet 5) Support and Maintenance 6) Initial Implementation / Set-Up Fees 7) Equipment sales 9) License 2) High Availability (“HA”) 3) Infrastructure as a Service (“IaaS”) | Revenue Recognition Nature of goods and services The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: 1) Infrastructure as a Service (IaaS) and Disaster Recovery Revenue Subscription services such as Infrastructure as a Service, Platform as a Service and Disaster Recovery, High Availability, Data Vault Services and DRaaS type solutions (cloud) allows clients to centralize and streamline their technical and mission critical digital information and technical environment. Clients' data can be backed up, replicated, archived and restored to meet their back to work objective in a disaster. Infrastructure as a Service (IaaS) assist clients to achieve reliable and cost-effective computing and high availability solutions while eliminating or supplementing Capex. 2) Managed Services These services are performed at the inception of a contract. The Company offers professional assistance to its clients during the installation processes. On-boarding and set-up services ensure that the solution or software is installed properly and function as designed to provide clients with the best solutions. In addition, clients that are managed service clients have a requirement for DSC to offer time and material billing. The Company also derives revenues in the area from providing support and management of its software to clients. The managed services include help desk, remote access, annual recovery tests and manufacturer support for equipment and on-gong monitoring of client system performance. 3) Equipment and Software Revenue The Company provides equipment and software and actively participate in collaboration with IBM to provide innovative business solutions to clients. The Company is a partner of IBM and the various software solutions provided to clients. Disaggregation of revenue In the following table, revenue is disaggregated by major product line, geography, and timing of revenue recognition. Schedule of revenue is disaggregated by major product For the Year Ended December 31, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,691,133 $ 115,237 $ 5,806,370 Equipment and Software 2,074,911 — 2,074,911 Managed Services 380,701 — 380,701 Professional Fees 362,375 — 362,375 Nexxis VoIP Services 696,576 — 696,576 Total Revenue $ 9,205,696 $ 115,237 $ 9,320,933 For the Year Ended December 31, 2019 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,223,868 $ 213,816 $ 5,437,684 Equipment and Software 1,784,658 — 1,784,658 Managed Services 365,767 — 365,767 Professional Fees 411,475 — 411,475 Nexxis VoIP Services 484,024 — 484,024 Total Revenue $ 8,269,792 $ 213,816 $ 8,483,608 For the Year Ended December 31, Timing of revenue recognition 2020 2019 Products transferred at a point in time $ 2,817,987 $ 2,196,133 Products and services transferred over time 6,502,946 6,287,475 Total Revenue $ 9,320,933 $ 8,483,608 Contract receivables are recorded at the invoiced amount and are uncollateralized, non-interest-bearing client obligations. Provisions for estimated uncollectible accounts receivable are made for individual accounts based upon specific facts and circumstances including criteria such as their age, amount, and client standing. Sales are generally recorded in the month the service is provided. For clients who are billed on a quarterly or annual basis, deferred revenue is recorded and amortized over the life of the contract. Transaction price allocated to the remaining performance obligations The Company has the following performance obligations: 1) Disaster Recovery as a Service (“DRaaS”) 2) Data Vaulting 3) High Availability (“HA”) 4) Infrastructure as a Service (“IaaS”) 5) Message Logic 6) Internet 7) Support and Maintenance 8) Initial Set-Up Fees 9) Equipment sales 10) License Disaster Recovery with Stand-By Servers, High Availability, Data Vaulting, IaaS, Message Logic, Support and Maintenance, and Internet Subscription services such as the above allows clients to access a set of data or receive services for a predetermined period of time. As the client obtains access at a point in time but continues to have access for the remainder of the subscription period, the client is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the related performance obligation is considered to be satisfied ratably over the contract term. As the performance obligation is satisfied evenly across the term of the contract, revenue should be recognized on a straight-line basis over the contract term. Initial Set-Up Fees The Company accounts for set-up fees as separate performance obligation. Set-up services are performed one time and accordingly the revenue should be recognized at the point in time that the service is performed, and the Company is entitled to the payment. Equipment sales For the Equipment sales performance obligation, the control of the product transfers at a point in time (i.e., when the goods have been shipped or delivered to the clients' location, depending on shipping terms). Noting that the satisfaction of the performance obligation, in this sense, does not occur over time as defined within ASC 606-10-25-27 through 29, the performance obligation is considered to be satisfied at a point in time (ASC 606-10-25-30) when the obligation to the client has been fulfilled (i.e., when the goods have left the shipping facility or delivered to the client, depending on shipping terms). License – granting SSL certificates and other licenses In the case of Licensing performance obligation, the control of the product transfers either at point in time or over time depending on the nature of the license. The revenue standard identifies two types of licenses of IP: a right to access IP and a right to use IP. To assist in determining whether a license provides a right to use or a right to access IP, ASC 606 defines two categories of IP: Functional and Symbolic. The Company’s license arrangements typically do not require the Company to make its proprietary content available to the client either through a download or through a direct connection. Throughout the life of the contract the Company does not continue to provide updates or upgrades to the license granted. Based on the guidance, the Company considers its license offerings to be akin to functional IP and will recognize revenue at the point in time the license is granted and/or renewed for a new period. |
Payment terms | Payment terms The terms of the contracts typical range from 12 to 36 months with auto-renew options. The Company invoices clients one month in advance for its services plus any overages or additional services. | Payment terms The terms of the contracts typical range from 12 to 36 months with auto-renew options. The Company invoices clients one month in advance for its services plus any overages or additional services provided. |
Warranties | Warranties The Company offers guaranteed service levels and service guarantees on some of its contracts. These warrantees are not sold separately and according to ASC 606-10-50-12(a) are accounted as “assurance warranties”. | Warranties The Company offers guaranteed service levels and performance and service guarantees on some of its contracts. These warrantees are not sold separately and according to ASC 606-10-50-12(a) are accounted as “assurance warranties”. |
Significant judgement | Significant judgement In the instances that contracts have multiple performance obligations, the Company uses judgment to establish stand-alone price for each performance obligation separately. The price for each performance obligation is determined by reviewing market data for similar services as well as the Company’s historical pricing of each individual service. The sum of each performance obligation was calculated to determine the aggregate price for the individual services. Next the proportion of each individual service to the aggregate price was determined. That ratio was applied to the total contract price in order to allocate the transaction price to each performance obligation. | Significant judgement In the instances that contract have multiple performance obligation, the Company uses judgment to establish stand-alone price for each performance obligation separately. The price for each performance obligation is determined by reviewing market data for similar services as well as the Company’s historical pricing of each individual service. The sum of each performance obligation was calculated to determine the aggregate price for the individual services. Next the proportion of each individual service to the aggregate price was determined. That ratio was applied to the total contract price in order to allocate the transaction price to each performance obligation. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with FASB ASC 360-10-35, the Company reviews its long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying value exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. | Impairment of Long-Lived Assets In accordance with FASB ASC 360-10-35, we review our long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying value exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. |
Advertising Costs | Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred $ 252,286 137,931 | Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred a net impact of $ 309,003 259,920 |
Stock Based Compensation | Stock Based Compensation DSC follows the requirements of FASB ASC 718-10-10, Share Based Payments The valuation methodology used to determine the fair value of the options issued during the period is the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common Stock and does not intend to pay dividends on its Common Stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best assessment. Estimated volatility is a measure of the amount by which DSC’s stock price is expected to fluctuate each year during the expected life of the award. DSC’s calculation of estimated volatility is based on historical stock prices of these entities over a period equal to the expected life of the awards. | Stock Based Compensation DSC follows the requirements of FASB ASC 718-10-10, Share Based Payments The valuation methodology used to determine the fair value of the options issued during the year was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk- free interest rate, and the weighted average expected life of the options. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate. Estimated volatility is a measure of the amount by which DSC’s stock price is expected to fluctuate each year during the expected life of the award. DSC’s calculation of estimated volatility is based on historical stock prices of these entities over a period equal to the expected life of the awards. DSC uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share In accordance with FASB ASC 260-10-5 Earnings Per Share, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) adjusted for income or loss that would result from the assumed conversion of potential common shares from contracts that may be settled in stock or cash by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The following table sets forth the information needed to compute basic and diluted earnings per share for the three and six months ended June 30, 2021 and 2020: Schedule of Earning per share basic and dilute For the Three Months Ended June 30, For the Six Months Ended 2021 2020 2021 2020 Net Income (Loss) Available to Common Shareholders $ 114,313 $ 155,705 $ 77,529 $ 87,109 Weighted average number of common shares – basic 3,981,402 3,213,485 3,607,909 3,212,822 Dilutive securities Options 134,254 140,770 — 140,770 Warrants 3,333 3,333 3,333 3,333 Weighted average number of common shares – diluted 4,118,989 3,357,589 3,611,242 3,356,926 Earnings (Loss) per share, basic $ 0.03 $ 0.05 $ 0.02 $ 0.03 Earnings (Loss) per share, diluted $ 0.03 $ 0.05 $ 0.02 $ 0.03 The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income (loss) per share net income (loss) per share because their effect was anti-dilutive: Schedule of anti-dilutive income (loss) per share Three Months ended June 30, Six Months ended June 30, 2021 2020 2021 2020 Options 66,901 69,875 201,155 69,875 Warrants 1,840,000 — 1,840,000 — 1,906,901 69,875 2,041,155 69,875 | Net Income (Loss) Per Common Share In accordance with FASB ASC 260-10-5 Earnings Per Share, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) adjusted for income or loss that would result from the assumed conversion of potential common shares from contracts that may be settled in stock or cash by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The following table sets forth the information needed to compute basic and diluted earnings per share for the years ended December 31, 2020 and 2019: Schedule of Earnings Per Share, Basic and Diluted December 31, 2020 2019 Net Income (Loss) Available to Common Shareholders $ 55,339 $ (54,452 ) Weighted average number of common shares - basic 3,213,157 3,203,917 Dilutive securities Options 149,520 — Warrants 3,333 — Weighted average number of common shares - diluted 3,366,010 3,203,917 Earnings (Loss) per share, basic $ 0.02 $ 0.02 Earnings (Loss) per share, diluted $ 0.02 $ 0.02 The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income (loss) per share net income (loss) per share because their effect was anti-dilutive: Schedule of anti-dilutive income (loss) per share December 31, 2020 2019 Options 58,129 210,646 Warrants 3,333 3,333 61,462 213,979 |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP). Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. As such, the information included in these financial statements should be read in conjunction with the audited financial statements as of and for the years ended December 31, 2020 and 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), as filed on March 31, 2021. In the opinion of the Company’s management, these condensed consolidated financial statements include all adjustments, which are of only a normal and recurring nature, necessary for a fair presentation of the statement of financial position of the Company as of June 30, 2021 and its results of operations and cash flows for the three and six months ended June 30, 2021 and 2020. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2021. | |
Estimated Fair Value of Financial Instruments | Estimated Fair Value of Financial Instruments The Company’s financial instruments include cash, accounts receivable, accounts payable, line of credit, notes payable and lease commitments. Management believes the estimated fair value of these accounts at June 30, 2021 approximate their carrying value as reflected in the balance sheet due to the short-term nature of these instruments or the use of market interest rates for debt instruments. The carrying values of certain of the Company’s notes payable and capital lease obligations approximate their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace. | |
Disaster Recovery with Stand-By Servers, High Availability, Data Vaulting, IaaS, Message Logic, Support and Maintenance and Internet | Disaster Recovery with Stand-By Servers, High Availability, Data Vaulting, IaaS, Message Logic, Support and Maintenance and Internet Subscription services such as the above allows clients to access a set of data or receive services for a predetermined period of time. As the client obtains access at a point in time but continues to have access for the remainder of the subscription period, the client is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the related performance obligation is considered to be satisfied ratably over the contract term. As the performance obligation is satisfied evenly across the term of the contract, revenue is recognized on a straight-line basis over the contract term. | |
Initial Set-Up Fees | Initial Set-Up Fees The Company accounts for set-up fees as separate performance obligation. Set-up services are performed one time and accordingly the revenue is recognized at the point in time that the service is performed, and the Company is entitled to the payment. | |
Equipment sales | Equipment sales For the Equipment sales performance obligation, the control of the product transfers at a point in time (i.e., when the goods have been shipped or delivered to the clients' location, depending on shipping terms). Noting that the satisfaction of the performance obligation, in this sense, does not occur over time as defined within ASC 606-10-25-27 through 29, the performance obligation is considered to be satisfied at a point in time (ASC 606-10-25-30) when the obligation to the client has been fulfilled (i.e., when the goods have left the shipping facility or delivered to the client, depending on shipping terms). | |
License – granting SSL certificates and other licenses | License – granting SSL certificates and other licenses In the case of licensing performance obligation, the control of the product transfers either at point in time or over time depending on the nature of the license. The revenue standard identifies two types of licenses of IP: a right to access IP and a right to use IP. To assist in determining whether a license provides a right to use or a right to access IP, ASC 606 defines two categories of IP: Functional and Symbolic. The Company’s license arrangements typically do not require the Company to make its proprietary content available to the client either through a download or through a direct connection. Throughout the life of the contract the Company does not continue to provide updates or upgrades to the license granted. Based on the guidance, the Company considers its license offerings to be akin to functional IP and recognizes revenue at the point in time the license is granted and/or renewed for a new period. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Schedule of revenue is disaggregated by major product | Schedule of revenue is disaggregated by major product For the Three Months Ended June 30, 2021 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 1,685,951 $ 39,212 $ 1,725,163 Equipment and Software 760,451 — 760,451 Managed Services 809,487 — 809,487 Nexxis VoIP Services 183,118 — 183,118 Other 50,030 — 50,030 Total Revenue $ 3,489,037 $ 39,212 $ 3,528,249 For the Three Months Ended June 30, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 1,340,437 $ 42,433 $ 1,382,870 Equipment and Software 247,187 — 247,187 Managed Services 219,392 — 219,392 Nexxis VoIP Services 153,887 — 153,887 Other 2,289 — 2,289 Total Revenue $ 1,963,192 $ 42,433 $ 2,005,625 For the Three Months Ended June 30, Timing of revenue recognition 2021 2020 Products transferred at a point in time $ 937,178 $ 247,187 Products and services transferred over time 2,591,071 1,758,438 Total Revenue $ 3,528,249 $ 2,005,625 For the Six Months Ended June 30, 2021 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 3,307,949 $ 69,787 $ 3,385,511 Equipment and Software 1,225,334 — 1,225,334 Managed Services 1,036,254 — 1,036,254 Nexxis VoIP Services 378,444 — 378,444 Other 77,265 — 77,265 Total Revenue $ 6,025,246 $ 69,787 $ 6,102,940 For the Six Months Ended June 30, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,689,558 $ 87,032 $ 2,776,590 Equipment and Software 575,928 — 575,928 Managed Services 439,867 — 439,867 Nexxis VoIP Services 307,084 — 307,084 Other 4,866 — 4,866 Total Revenue $ 4,017,303 $ 87,032 $ 4,104,335 For the Six Months Ended June 30, Timing of revenue recognition 2021 2020 Products transferred at a point in time $ 1,511,751 $ 575,928 Products and services transferred over time 4,591,189 3,528,407 Total Revenue $ 6,102,940 $ 4,104,335 | Schedule of revenue is disaggregated by major product For the Year Ended December 31, 2020 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,691,133 $ 115,237 $ 5,806,370 Equipment and Software 2,074,911 — 2,074,911 Managed Services 380,701 — 380,701 Professional Fees 362,375 — 362,375 Nexxis VoIP Services 696,576 — 696,576 Total Revenue $ 9,205,696 $ 115,237 $ 9,320,933 For the Year Ended December 31, 2019 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,223,868 $ 213,816 $ 5,437,684 Equipment and Software 1,784,658 — 1,784,658 Managed Services 365,767 — 365,767 Professional Fees 411,475 — 411,475 Nexxis VoIP Services 484,024 — 484,024 Total Revenue $ 8,269,792 $ 213,816 $ 8,483,608 For the Year Ended December 31, Timing of revenue recognition 2020 2019 Products transferred at a point in time $ 2,817,987 $ 2,196,133 Products and services transferred over time 6,502,946 6,287,475 Total Revenue $ 9,320,933 $ 8,483,608 |
Schedule of Earning per share basic and dilute | Schedule of Earning per share basic and dilute For the Three Months Ended June 30, For the Six Months Ended 2021 2020 2021 2020 Net Income (Loss) Available to Common Shareholders $ 114,313 $ 155,705 $ 77,529 $ 87,109 Weighted average number of common shares – basic 3,981,402 3,213,485 3,607,909 3,212,822 Dilutive securities Options 134,254 140,770 — 140,770 Warrants 3,333 3,333 3,333 3,333 Weighted average number of common shares – diluted 4,118,989 3,357,589 3,611,242 3,356,926 Earnings (Loss) per share, basic $ 0.03 $ 0.05 $ 0.02 $ 0.03 Earnings (Loss) per share, diluted $ 0.03 $ 0.05 $ 0.02 $ 0.03 | Schedule of Earnings Per Share, Basic and Diluted December 31, 2020 2019 Net Income (Loss) Available to Common Shareholders $ 55,339 $ (54,452 ) Weighted average number of common shares - basic 3,213,157 3,203,917 Dilutive securities Options 149,520 — Warrants 3,333 — Weighted average number of common shares - diluted 3,366,010 3,203,917 Earnings (Loss) per share, basic $ 0.02 $ 0.02 Earnings (Loss) per share, diluted $ 0.02 $ 0.02 |
Schedule of anti-dilutive income (loss) per share | Schedule of anti-dilutive income (loss) per share Three Months ended June 30, Six Months ended June 30, 2021 2020 2021 2020 Options 66,901 69,875 201,155 69,875 Warrants 1,840,000 — 1,840,000 — 1,906,901 69,875 2,041,155 69,875 | Schedule of anti-dilutive income (loss) per share December 31, 2020 2019 Options 58,129 210,646 Warrants 3,333 3,333 61,462 213,979 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of property and equipment | Schedule of property and equipment June 30, December 31, 2021 2020 Storage equipment $ 476,887 $ 756,236 Website and software — 533,417 Furniture and fixtures 27,850 17,441 Leasehold improvements 20,983 20,983 Computer hardware and software 299,867 1,236,329 Data center equipment 5,502,288 5,281,017 6,327,875 7,845,423 Less: Accumulated depreciation (4,177,560 ) (5,543,822 ) Net property and equipment $ 2,150,315 $ 2,301,601 | Schedule of property and equipment December 31, 2020 2019 Storage equipment $ 756,236 $ 756,236 Website and software 533,417 533,417 Furniture and fixtures 17,441 27,131 Leasehold improvements 20,983 16,846 Computer hardware and software 1,236,329 1,218,464 Data center equipment 5,281,017 4,341,993 7,845,423 6,894,087 Less: Accumulated depreciation 5,543,822 4,705,256 Net property and equipment $ 2,301,601 $ 2,188,831 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of goodwill and intangible assets | Schedule of goodwill and intangible assets June 30, 2021 Estimated life Accumulated in years Gross amount Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 13,216,040 $ — $ 13,216,040 Trademarks Indefinite 294,268 — 294,268 Total intangible assets not subject to amortization 13,510,308 — 13,510,308 Intangible assets subject to amortization Customer lists 5 15 744,099 744,099 — ABC acquired contracts 5 310,000 289,334 20,666 SIAS acquired contracts 5 660,000 616,000 44,000 Non-compete agreements 4 272,147 272,147 — Website and Digital Assets 3 33,002 274 32,728 Total intangible assets subject to amortization 2,019,248 1,921,854 97,394 Total Goodwill and Intangible Assets $ 15,529,556 $ 1,921,854 $ 13,607,702 | Schedule of goodwill and intangible assets December 31, 2020 Estimated life in years Gross amount Accumulated Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 3,015,700 $ — $ 3,015,700 Trademarks Indefinite 294,268 — 294,268 Total intangible assets not subject to amortization 3,309,968 — 3,309,968 Intangible assets subject to amortization Customer lists 5 15 897,274 897,274 — ABC acquired contracts 5 310,000 258,333 51,667 SIAS acquired contracts 5 660,000 550,000 110,000 Non-compete agreements 4 272,147 272,147 - Total intangible assets subject to amortization 2,139,421 1,977,754 161,667 Total Goodwill and Intangible Assets $ 5,449,389 $ 1,977,754 $ 3,471,635 |
Schedule of amortization over the next two years | Schedule of amortization over the next two years Twelve months ending June 30, 2022 $ 75,575 2023 10,909 2024 10,910 Total $ 97,394 | Schedule of amortization over the next two years Years ending December 31, 2021 $ 161,667 Total $ 161,667 |
Leases (Tables)
Leases (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Components of lease expense | Components of lease expense Six Months Ended Finance leases: Amortization of assets, included in depreciation and amortization expense $ 677,505 Interest on lease liabilities, included in interest expense 102,539 Operating lease: Amortization of assets, included in total operating expense 51,762 Interest on lease liabilities, included in total operating expense 8,197 Total net lease cost $ 840,000 Supplemental balance sheet information related to leases was as follows Operating Leases Operating lease ROU asset $ 198,549 Current operating lease liabilities 106,102 Noncurrent operating lease liabilities 102,407 Total operating lease liabilities $ 208,509 June 30, 2021 Finance leases: Property and equipment, at cost $ 4,416,665 Accumulated amortization (2,516,643 ) Property and equipment, net 1,900,022 Current obligations of finance leases $ 1,147,355 Finance leases, net of current obligations 765,102 Total finance lease liabilities $ 1,912,457 | Components of lease expense Year Ended Finance lease: Amortization of assets, included in depreciation and amortization expense $ 814,572 Interest on lease liabilities, included in interest expense 154,858 Operating lease: Amortization of assets, included in total operating expense 101,504 Interest on lease liabilities, included in total operating expense 20,763 Total net lease cost $ 1,091,697 |
Supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 43,362 Financing cash flows related to finance leases $ 677,505 Weighted average remaining lease term (in years): Operating leases 1.22 Finance leases 1.82 Weighted average discount rate: Operating leases 7 % Finance leases 6 % | Supplemental balance sheet information related to leases Operating lease ROU asset $ 241,911 Current operating lease liabilities 104,549 Noncurrent operating lease liabilities 147,525 Total operating lease liabilities $ 252,074 December 31, 2020 Finance leases: Property and equipment, at cost $ 4,366,665 Accumulated amortization (2,267,449 ) Property and equipment, net 2,099,216 Current obligations of finance leases $ 1,317,542 Finance leases, net of current obligations 1,222,420 Total finance lease liabilities $ 2,539,962 |
Supplemental cash flow and other information related to leases | Supplemental cash flow and other information related to leases Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 80,743 Financing cash flows related to finance leases $ 774,971 Weighted average remaining lease term (in years): Operating leases 1.72 Finance leases 2.12 Weighted average discount rate: Operating leases 7 % Finance leases 6 % | |
Long-term obligations under the operating and Finance leases | Long-term obligations under the operating and Finance leases For the Twelve Months Ended June 30, Operating Leases Finance Leases 2022 $ 106,102 1,209,750 2023 109,365 622,949 2024 9,395 242,341 Total lease payments 224,863 2,075,040 Less: Amounts representing interest (16,354 ) (162,584 ) Total lease obligations 208,509 1,912,457 Less: Current (106,102 ) (1,273,587 ) $ 102,407 $ 765,102 | Long-term obligations under the operating and Finance leases For the Year ending December 31, Operating Leases Finance Leases 2021 $ 104,549 $ 1,462,239 2022 107,718 849,427 2023 64,357 441,724 2024 — — 2025 — — Total lease payments 276,625 2,753,390 Less: Amounts representing interest (24,551 ) (213,428 ) Total lease obligations 252,074 2,539,962 Less: Current (104,549 ) (1,317,542 ) $ 147,525 $ 1,222,420 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of principal payments due on notes payable | Schedule of principal payments due on notes payable Year ending December 31, 2021 $ 374,871 2022 107,106 $ 481,977 |
Stockholders_ (Deficit) (Tables
Stockholders’ (Deficit) (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Schedule of option activity and related information | Schedule of option activity and related information Number of Range of Weighted Weighted Options Outstanding at December 31, 2020 207,650 $ 2.0-16 $ 5.2 6.6 Options Granted — — — — Exercised (6,592 ) 2.0 2.0 — Expired/Cancelled — — — — Options Outstanding at June 30, 2021 201,155 $ 2.0-16 $ 5.53 6.12 Options Exercisable at June 30, 2021 201,155 $ 2.0-16 $ 5.53 6.12 | Schedule of option activity and related information Number of Range of Weighted Weighted Options Outstanding at January 1, 2019 144,139 $ 0.08 – 26.00 $ 10.40 6.8 Options Granted 71,313 2.00 2.00 Exercised (100,000 ) 2.00 2.00 Expired/Cancelled (92,232 ) 2.00 2.00 Options Outstanding at December 31, 2019 210,646 $ 2.00 – 26.00 $ 6.80 7.5 Options Granted 8,750 4.80 – 5.20 5.20 Exercised (2,500 ) 2.00 2.00 Expire/Cancelled (9,246 ) 14.00 – 14.40 14.40 Options Outstanding at December 31, 2020 207,650 $ 2.00 – 15.60 $ 5.20 6.6 Options Exercisable at December 31, 2020 130,681 $ 2.00 – 15.60 $ 6.80 5.5 |
Schedule of fair value of options by using Black-Scholes model | Schedule of fair value of options by using Black-Scholes model 2020 2019 Weighted average fair value of options granted $ 5.20 $ 2.00 Risk-free interest rate 0.66 0.83 % 1.79 % Volatility 221 223 % 225 % Expected life (years) 10 10 Dividend yield 0.00 % 0.00 % | |
Schedule of warrant activity and related information | Schedule of warrant activity and related information Number of Range of Weighted Weighted Warrants Outstanding at January 1, 2019 3,333 $ 0.40 $ 0.40 5.5 Warrants Granted — — — Warrants Outstanding at December 31, 2019 3,333 $ 0.40 $ 0.40 4.5 Warrants Granted — — — Warrants Outstanding at December 31, 2020 3,333 $ 0.40 $ 0.40 3.5 Warrants Exercisable at December 31, 2020 3,333 $ 0.40 $ 0.40 3.5 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of deferred taxes | Schedule of components of deferred taxes 2020 2019 Net operating loss carry-forward $ 1,313,000 $ 1,419,000 Less: valuation allowance (1,313,000 ) (1,419,000 ) Net deferred tax asset $ — $ — |
Schedule of expected income tax expense (benefit) | Schedule of expected income tax expense (benefit) Year Ended December 31, 2020 2019 Expected income tax benefit (loss) at statutory rate of 21% $ 79,000 $ 22,000 State and local tax benefit (loss), net of federal 27,000 7,500 (106,000 ) Change in valuation account (4,000 ) (29,500 ) Income tax expense (benefit) $ — $ — |
Merger (Tables)
Merger (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase price | Schedule of Purchase price Purchase price: Cash paid to seller $ 6,149,343 Contingent Consideration - shares 4,950,000 Total purchase price 11,099,343 Assets acquired: Cash 212,068 Accounts Receivable 1,389,263 Prepaid Expenses 127,574 Fixed Assets 4,986 Website and Digital Assets 33,002 Security Deposits 22,500 Total assets acquired 1,789,393 Liabilities assumed: Accounts payable and accrued expenses 514,354 Deferred Revenue 68,736 PPP Loan Payable 307,300 Total liabilities assumed 890,390 Net assets acquired 899,003 Excess purchase price $ 10,200,340 |
Schedule of unaudited pro-forma | Schedule of unaudited pro-forma Three Months Ended June 30, 2020 Revenues $ 4,612,967 Net income attributable to common shareholders $ 437,524 Net income per share $ 0.12 Weighted average number of shares outstanding 3,751,825 Six Months Ended June 30, 2020 Revenues $ 9,613,734 Net income attributable to common shareholders $ 304,889 Net income per share $ 0.08 Weighted average number of shares outstanding 3,751,825 Three Months Ended June 30, 2021 Revenues $ 7,759,779 Net income attributable to common shareholders $ 1,288,367 Net income per share $ 0.41 Weighted average number of shares outstanding 3,751,825 Six Months Ended June 30, 2021 Revenues $ 14,270,565 Net income attributable to common shareholders $ 1,202,704 Net income per share $ 0.32 Weighted average number of shares outstanding 3,751,825 |
Basis of Presentation, Organi_2
Basis of Presentation, Organization and Other Matters (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Net loss attributable to common shareholders | $ 114,313 | $ 155,705 | $ 77,529 | $ 87,109 | $ 55,339 | $ (54,452) | |
Cash and cash equivalents | $ 3,076,120 | $ 616,242 | 3,076,120 | 616,242 | 893,598 | 326,561 | $ 228,790 |
Working capital deficiency | 2,666,448 | ||||||
Net Cash Provided by Operating Activities | $ 825,017 | $ 380,958 | $ 1,110,679 | $ 799,666 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Product Information [Line Items] | ||||||
Total Revenue | $ 3,528,249 | $ 2,005,625 | $ 6,102,940 | $ 4,104,335 | $ 9,320,933 | $ 8,483,608 |
Transferred at Point in Time [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 937,178 | 247,187 | 1,511,751 | 575,928 | 2,817,987 | 2,196,133 |
Transferred over Time [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 2,591,071 | 1,758,438 | 4,591,189 | 3,528,407 | 6,502,946 | 6,287,475 |
Service [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 1,725,163 | 1,382,870 | 3,385,511 | 2,776,590 | 5,806,370 | 5,437,684 |
Equipment And Software [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 760,451 | 247,187 | 1,225,334 | 575,928 | 2,074,911 | 1,784,658 |
Managed Services [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 809,487 | 219,392 | 1,036,254 | 439,867 | 380,701 | 365,767 |
Professional Fees [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 362,375 | 411,475 | ||||
Nexxis Voip Services [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 183,118 | 153,887 | 378,444 | 307,084 | 696,576 | 484,024 |
Other [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 50,030 | 2,289 | 77,265 | 4,866 | ||
UNITED STATES | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 3,489,037 | 1,963,192 | 6,025,246 | 4,017,303 | 9,205,696 | 8,269,792 |
UNITED STATES | Service [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 1,685,951 | 1,340,437 | 3,307,949 | 2,689,558 | 5,691,133 | 5,223,868 |
UNITED STATES | Equipment And Software [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 760,451 | 247,187 | 1,225,334 | 575,928 | 2,074,911 | 1,784,658 |
UNITED STATES | Managed Services [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 809,487 | 219,392 | 1,036,254 | 439,867 | 380,701 | 365,767 |
UNITED STATES | Professional Fees [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 362,375 | 411,475 | ||||
UNITED STATES | Nexxis Voip Services [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 183,118 | 153,887 | 378,444 | 307,084 | 696,576 | 484,024 |
UNITED STATES | Other [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 50,030 | 2,289 | 77,265 | 4,866 | ||
International [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 39,212 | 42,433 | 69,787 | 87,032 | 115,237 | 213,816 |
International [Member] | Service [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 39,212 | 42,433 | 69,787 | 87,032 | 115,237 | 213,816 |
International [Member] | Equipment And Software [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 0 | 0 | 0 | 0 | ||
International [Member] | Managed Services [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 0 | 0 | 0 | 0 | ||
International [Member] | Professional Fees [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | ||||||
International [Member] | Nexxis Voip Services [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | 0 | 0 | 0 | 0 | ||
International [Member] | Other [Member] | ||||||
Product Information [Line Items] | ||||||
Total Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||||||
Net Income (Loss) Available to Common Shareholders | $ 114,313 | $ 155,705 | $ 77,529 | $ 87,109 | $ 55,339 | $ (54,452) |
Weighted average number of common shares - basic | 3,981,402 | 3,213,485 | 3,607,909 | 3,212,822 | 3,213,157 | 3,203,917 |
Dilutive securities | ||||||
Dilutive securities Options | 134,254 | 140,770 | 0 | 140,770 | 149,520 | |
Warrants | 3,333 | 3,333 | 3,333 | 3,333 | 3,333 | |
Weighted average number of common shares – diluted | 4,118,989 | 3,357,589 | 3,611,242 | 3,356,926 | 3,366,010 | 3,203,917 |
Earnings (Loss) per share, basic | $ 0.03 | $ 0.05 | $ 0.02 | $ 0.03 | $ 0.02 | $ 0.02 |
Earnings (Loss) per share, diluted | $ 0.03 | $ 0.05 | $ 0.02 | $ 0.03 | $ 0.02 | $ 0.02 |
Weighted average number of common shares – basic | 3,981,402 | 3,213,485 | 3,607,909 | 3,212,822 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive securities | 1,906,901 | 69,875 | 2,041,155 | 69,875 | 61,462 | 213,979 |
Employee Stock Option 1 [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive securities | 66,901 | 69,875 | 201,155 | 69,875 | 58,129 | 210,646 |
Warrant 1 [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially dilutive securities | 1,840,000 | 0 | 1,840,000 | 0 | 3,333 | 3,333 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Product Information [Line Items] | ||||
Accounts receivables due | 30 days | 30 days | ||
Advertising costs | $ 252,286 | $ 137,931 | $ 309,003 | $ 259,920 |
Loss on disposal of equipment | $ 29,732 | |||
Unrecognized Tax Benefits | $ 0 | $ 0 | ||
Property, Plant and Equipment [Member] | Minimum [Member] | ||||
Product Information [Line Items] | ||||
Useful lives | 5 | |||
Property, Plant and Equipment [Member] | Maximum [Member] | ||||
Product Information [Line Items] | ||||
Useful lives | 7 | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 33.00% | 31.00% | 45.00% | 38.00% |
Customer Concentration Risk [Member] | One Customer [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 15.00% | 14.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Gross Property and equipment | $ 6,327,875 | $ 7,845,423 | $ 6,894,087 |
Less: Accumulated depreciation | 5,543,822 | 4,705,256 | |
Net property and equipment | 2,150,315 | 2,301,601 | 2,188,831 |
Less: Accumulated depreciation | (4,177,560) | (5,543,822) | (4,705,256) |
Technology Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Property and equipment | 476,887 | 756,236 | 756,236 |
Website And Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Property and equipment | 533,417 | 533,417 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Property and equipment | 27,850 | 17,441 | 27,131 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Property and equipment | 20,983 | 20,983 | 16,846 |
Computer Hardware And Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Property and equipment | 299,867 | 1,236,329 | 1,218,464 |
Data Center Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Property and equipment | $ 5,502,288 | $ 5,281,017 | $ 4,341,993 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 479,768 | $ 397,467 | $ 838,566 | $ 699,918 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets not subject to amortization, Gross amount | $ 13,510,308 | $ 3,309,968 |
Total intangible assets not subject to amortization, Accumulated Amortization | 0 | 0 |
Total intangible assets not subject to amortization, Net | 13,510,308 | 3,309,968 |
Total Intangible Assets, Gross amount | 2,019,248 | 2,139,421 |
Total Intangible Assets, Accumulated Amortization | 1,921,854 | 1,977,754 |
Total Intangible Assets, Net amount | 97,394 | 161,667 |
Total Goodwill and Intangible Assets, Gross amount | 15,529,556 | 5,449,389 |
Total Goodwill and Intangible Assets, Accumulated Amortization | 1,921,854 | 1,977,754 |
Total Goodwill and Intangible Assets, Net | $ 13,607,702 | $ 3,471,635 |
Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | Indefinite | Indefinite |
Total intangible assets not subject to amortization, Gross amount | $ 13,216,040 | $ 3,015,700 |
Total intangible assets not subject to amortization, Accumulated Amortization | 0 | 0 |
Total intangible assets not subject to amortization, Net | 13,216,040 | $ 3,015,700 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | Indefinite | |
Total intangible assets not subject to amortization, Gross amount | $ 294,268 | |
Total intangible assets not subject to amortization, Accumulated Amortization | 0 | |
Total intangible assets not subject to amortization, Net | 294,268 | |
Customer Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets, Gross amount | 744,099 | 897,274 |
Total Intangible Assets, Accumulated Amortization | 744,099 | 897,274 |
Total Intangible Assets, Net amount | $ 0 | $ 0 |
Customer Lists [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Estimated life in years | 5 years | 5 years |
Customer Lists [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Estimated life in years | 15 years | 15 years |
A B C Acquired Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Estimated life in years | 5 years | 5 years |
Total Intangible Assets, Gross amount | $ 310,000 | $ 310,000 |
Total Intangible Assets, Accumulated Amortization | 289,334 | 258,333 |
Total Intangible Assets, Net amount | $ 20,666 | $ 51,667 |
S I A S Acquired Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Estimated life in years | 5 years | 5 years |
Total Intangible Assets, Gross amount | $ 660,000 | $ 660,000 |
Total Intangible Assets, Accumulated Amortization | 616,000 | 550,000 |
Total Intangible Assets, Net amount | $ 44,000 | $ 110,000 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Estimated life in years | 4 years | 4 years |
Total Intangible Assets, Gross amount | $ 272,147 | $ 272,147 |
Total Intangible Assets, Accumulated Amortization | 272,147 | 272,147 |
Total Intangible Assets, Net amount | $ 0 | $ 0 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | Indefinite | |
Total intangible assets not subject to amortization, Gross amount | $ 294,268 | |
Total intangible assets not subject to amortization, Accumulated Amortization | 0 | |
Total intangible assets not subject to amortization, Net | $ 294,268 | |
Website And Digital Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Estimated life in years | 3 years | |
Total Intangible Assets, Gross amount | $ 33,002 | |
Total Intangible Assets, Accumulated Amortization | 274 | |
Total Intangible Assets, Net amount | $ 32,728 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 75,575 | $ 161,667 |
Total | 97,394 | $ 161,667 |
2023 | 10,909 | |
2023 | $ 10,910 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 97,275 | $ 98,667 | $ 194,000 | $ 196,779 |
Leases (Details)
Leases (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finance lease: | |||
Amortization of assets, included in depreciation and amortization expense | $ 677,505 | $ 814,572 | |
Interest on lease liabilities, included in interest expense | 102,539 | 154,858 | |
Operating lease: | |||
Amortization of assets, included in total operating expense | 51,762 | 101,504 | |
Interest on lease liabilities, included in total operating expense | 8,197 | 20,763 | |
Total net lease cost | 840,000 | 1,091,697 | |
Operating lease ROU asset | 198,549 | 241,911 | $ 324,267 |
Current operating lease liabilities | 106,102 | 104,549 | 101,505 |
Noncurrent operating lease liabilities | 102,407 | 147,525 | $ 231,312 |
Total operating lease liabilities | 208,509 | 252,074 | |
Property and equipment, at cost | 4,416,665 | 4,366,665 | |
Accumulated amortization | (2,516,643) | (2,267,449) | |
Property and equipment, net | 1,900,022 | 2,099,216 | |
Current obligations of finance leases | 1,147,355 | 1,317,542 | |
Finance leases, net of current obligations | 765,102 | 1,222,420 | |
Total finance lease liabilities | $ 1,912,457 | $ 2,539,962 |
Leases (Details 1)
Leases (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease ROU asset | $ 198,549 | $ 241,911 | $ 324,267 |
Current operating lease liabilities | 106,102 | 104,549 | 101,505 |
Noncurrent operating lease liabilities | 102,407 | 147,525 | $ 231,312 |
Total operating lease liabilities | 208,509 | 252,074 | |
Finance leases: | |||
Property and equipment, at cost | 4,416,665 | 4,366,665 | |
Accumulated amortization | 2,516,643 | 2,267,449 | |
Property and equipment, net | 1,900,022 | 2,099,216 | |
Current obligations of finance leases | 1,147,355 | 1,317,542 | |
Finance leases, net of current obligations | 765,102 | 1,222,420 | |
Total finance lease liabilities | 1,912,457 | 2,539,962 | |
Operating cash flows related to operating leases | 43,362 | 80,743 | |
Financing cash flows related to finance leases | $ 677,505 | $ 774,971 | |
Weighted average remaining lease term operating leases (in years) | 1 year 2 months 19 days | 1 year 8 months 19 days | |
Weighted average remaining lease term finance leases (in years) | 1 year 9 months 25 days | 2 years 1 month 13 days | |
Weighted average discount rate operating leases | 7.00% | 7.00% | |
Weighted average discount rate finance leases | 6.00% | 6.00% |
Leases (Details 2)
Leases (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating cash flows related to operating leases | $ 43,362 | $ 80,743 | |
Financing cash flows related to finance leases | $ 677,505 | $ 774,971 | |
Weighted average remaining lease term operating leases (in years) | 1 year 2 months 19 days | 1 year 8 months 19 days | |
Weighted average remaining lease term finance leases (in years) | 1 year 9 months 25 days | 2 years 1 month 13 days | |
Weighted average discount rate operating leases | 7.00% | 7.00% | |
Weighted average discount rate finance leases | 6.00% | 6.00% | |
2022 | $ 106,102 | $ 104,549 | |
2022 | 1,209,750 | 1,462,239 | |
2023 | 109,365 | 107,718 | |
2023 | 622,949 | 849,427 | |
2024 | 9,395 | 64,357 | |
2024 | 242,341 | 441,724 | |
Total lease payments | 224,863 | 276,625 | |
Total lease payments | 2,075,040 | 2,753,390 | |
Less: Amounts representing interest | (16,354) | (24,551) | |
Less: Amounts representing interest | (162,584) | (213,428) | |
Total operating lease liabilities | 208,509 | 252,074 | |
Total finance lease liabilities | 1,912,457 | 2,539,962 | |
Less: Current operating lease liabilities | (106,102) | (104,549) | $ (101,505) |
Less: Current Finance lease liabilities | (1,273,587) | ||
Noncurrent operating lease liabilities | 102,407 | 147,525 | $ 231,312 |
Noncurrent Finance lease liabilities | $ 765,102 | $ 1,222,420 |
Lease (Details 3)
Lease (Details 3) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | |||
2021 | $ 106,102 | $ 104,549 | |
2021 | 1,209,750 | 1,462,239 | |
2022 | 109,365 | 107,718 | |
2022 | 622,949 | 849,427 | |
2023 | 9,395 | 64,357 | |
2023 | 242,341 | 441,724 | |
2024 | 0 | ||
2024 | 0 | ||
2025 | 0 | ||
2025 | 0 | ||
Total lease payments | 224,863 | 276,625 | |
Total lease payments | 2,075,040 | 2,753,390 | |
Less: Amounts representing interest | (16,354) | (24,551) | |
Less: Amounts representing interest | (162,584) | (213,428) | |
Total operating lease liabilities | 208,509 | 252,074 | |
Total finance lease liabilities | 1,912,457 | 2,539,962 | |
Less: Current operating lease liabilities | (106,102) | (104,549) | $ (101,505) |
Less: Current Finance lease liabilities | (1,147,355) | (1,317,542) | |
Noncurrent operating lease liabilities | 102,407 | 147,525 | $ 231,312 |
Noncurrent Finance lease liabilities | $ 765,102 | $ 1,222,420 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Mar. 04, 2021 | Apr. 01, 2019 | Jan. 02, 2019 | Apr. 01, 2018 | Jul. 31, 2020 | Jun. 30, 2020 | Jun. 29, 2020 | Mar. 31, 2020 | Jan. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 01, 2017 | Jun. 02, 2020 |
Lessee, Lease, Description [Line Items] | |||||||||||||||
Discount rate | 7.00% | 7.00% | |||||||||||||
Operating leases, rent expense, net | $ 41,894 | $ 79,510 | $ 169,716 | $ 251,814 | |||||||||||
Systems Trading [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Lease expiration date | Mar. 31, 2024 | Dec. 31, 2023 | Apr. 16, 2022 | Jan. 1, 2023 | |||||||||||
Lease Term | 5 years | 4 years | 3 years | ||||||||||||
Fiance leases contingent monthly rental payments | $ 1,567 | $ 29,592 | $ 23,475 | $ 10,534 | |||||||||||
Interest rate | 8.00% | 6.75% | 5.00% | 6.00% | |||||||||||
Melville 3 [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 8,382 | ||||||||||||||
Lease expiration date | Aug. 31, 2019 | ||||||||||||||
Melville 2 [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 897 | ||||||||||||||
Lease Term | 3 years 11 months 1 day | ||||||||||||||
Annual base rent | $ 10,764 | ||||||||||||||
Melville [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 86,268 | $ 86,268 | |||||||||||||
Lease expiration date | Jul. 31, 2023 | Jul. 31, 2023 | |||||||||||||
Lease Term | 5 years 3 months | ||||||||||||||
Warwick, RI [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 2,598 | $ 2,598 | |||||||||||||
Lease expiration date | Jan. 31, 2021 | Jan. 31, 2020 | |||||||||||||
Annual base rent | $ 31,176 | $ 31,176 | |||||||||||||
Warwick, RI [Member] | Minimum [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 2,324 | ||||||||||||||
Lease expiration date | Jan. 31, 2019 | ||||||||||||||
Warwick, RI [Member] | Maximum [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 2,460 | ||||||||||||||
Massachusetts And North Carolina [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 25,000 | $ 25,000 | |||||||||||||
Dallas [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Operating leases, rent expense | $ 1,905 | $ 1,905 | |||||||||||||
Lease Term | 13 months | 13 months | 13 months | ||||||||||||
Arrow Capital Solutions [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Lease expiration date | Jul. 31, 2023 | Jun. 29, 2023 | |||||||||||||
Lease Term | 3 years | 3 years | |||||||||||||
Fiance leases contingent monthly rental payments | $ 4,524 | $ 5,008 | |||||||||||||
Interest rate | 7.00% | 7.00% | |||||||||||||
First Lease [Member] | Systems Trading [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Lease expiration date | Mar. 1, 2022 | ||||||||||||||
Fiance leases contingent monthly rental payments | $ 1,328 | ||||||||||||||
Interest rate | 7.00% | ||||||||||||||
Second Lease [Member] | Systems Trading [Member] | |||||||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||||||
Lease expiration date | Mar. 1, 2022 | ||||||||||||||
Fiance leases contingent monthly rental payments | $ 461 | ||||||||||||||
Interest rate | 6.70% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Total debt amount available under revolving credit facility | $ 100,000 | $ 100,000 | |
Interest rate on debt under revolving credit facility excluding prime rate | 0.50% | 0.50% | |
Revolving Credit Facility | $ 0 | $ 24 | $ 75,000 |
Long Term Debt (Details)
Long Term Debt (Details) | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 374,871 |
2022 | 107,106 |
Long term debt | $ 481,977 |
Long Term Debt (Details Narrati
Long Term Debt (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Note Payable description | In connection with the Company’s October 2012 acquisition of certain assets (the “ML Assets”) of Message Logic, Inc. (“Message Logic”), the Company maintained ownership of the ML Assets subject to a security interest in the ML Assets held by a third party banking institution (the “Bank”) in connection with a secured loan made by the Bank to Message Logic in June 2012 in the amount of $350,000 (the “ML Loan”). The Bank filed a UCC-1 Financing Statement with the Secretary of State of Delaware perfecting its interest in the ML Assets (the “UCC-1 Filing”). On September 5, 2014, the Company entered into an agreement with Message Logic and the Bank pursuant to which the Company paid to the Bank the outstanding interest amount due on the ML Loan over seven months at $3,910 per month. In addition, the Company agreed to continue to make monthly interest-only payments to the Bank at $1,553 per month. | ||
Gain on contingent liability | $ 350,000 | $ 0 | |
Paycheck Protection Program [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from loans | $ 481,977 | ||
Debt instrument, maturity date | Apr. 30, 2022 | ||
Debt instrument, interest rate | 1.00% |
Stockholders' (Deficit) (Detail
Stockholders' (Deficit) (Details) - $ / shares | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercised | (5,060) | |||
Share-based Payment Arrangement, Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding, ending | 207,650 | 210,646 | 144,139 | |
Range of option/warrant price per share, outstanding, beginning | 2.00 – 26.00 | 0.08 – 26.00 | ||
Weighted Average Exercise Price Outstanding, ending | $ 5.20 | $ 6.80 | $ 10.40 | |
Weighted Average Contractual Life | 6 years 1 month 13 days | 6 years 7 months 6 days | 7 years 6 months | 6 years 9 months 18 days |
Granted | 8,750 | 71,313 | ||
Range of option/warrant price per share, Granted | 4.80 – 5.20 | 2.00 | ||
Weighted Average Exercise Price, Granted | $ 5.20 | $ 2 | ||
Exercised | (6,592) | (2,500) | (100,000) | |
Option Exercised | 2.00 | 2.00 | ||
Weighted Average Exercise Price, Exercised | $ 2 | $ 2 | $ 2 | |
Expired/Cancelled | (9,246) | (92,232) | ||
Range of option/warrant price per share, Expire/Cancelled | 14.00 – 14.40 | 2.00 | ||
Weighted Average Exercise Price, Expire/Cancelled | $ 14.40 | $ 2 | ||
Outstanding, ending | 201,155 | 207,650 | 210,646 | 144,139 |
[custom:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisesPricesEnd] | 2.00 – 15.60 | |||
Weighted Average Exercise Price Outstanding, ending | $ 5.20 | $ 6.80 | $ 10.40 | |
Exercisable, ending | 130,681 | |||
Exercisable, ending | 2.00 – 15.60 | |||
Exercisable, ending | $ 5.53 | $ 6.80 | ||
Weighted Average Contractual Life, Exercisable | 6 years 1 month 13 days | 5 years 6 months | ||
Outstanding, beginning | 207,650 | |||
[custom:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlanExercisesPrice] | 2.0-16 | |||
Weighted Average Exercise Price Outstanding, beginning | $ 5.2 | |||
Range of option/warrant price per share, Granted | ||||
Option Exercised | $ 2 | |||
Expired/Cancelled | 9,246 | 92,232 | ||
Range of option/warrant price per share, Expire/Cancelled | ||||
Outstanding, ending | 201,155 | 207,650 | ||
Range of option per share outstanding ending balance | 2.0-16 | |||
Weighted Average Exercise Price Outstanding, ending | $ 5.53 | $ 5.2 | ||
Outstanding, ending | 201,155 | 207,650 | 210,646 | 144,139 |
Range of option/warrant price per share, Exercisable ending | 2.0-16 |
Stockholders' (Deficit) (Deta_2
Stockholders' (Deficit) (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Weighted average fair value of options granted | $ 5.20 | $ 2 |
Risk-free interest rate minimum | 0.66% | |
Risk-free interest rate maximum | 0.83% | |
Risk-free interest rate | 1.79% | |
Volatility minimum | 221.00% | |
Volatility maximum | 223.00% | |
Volatility | 225.00% | |
Expected life (years) | 10 years | 10 years |
Dividend yield | 0.00% | 0.00% |
Stockholders' (Deficit) (Deta_3
Stockholders' (Deficit) (Details 2) - Warrant [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding, ending | 3,333 | 3,333 | |
Range of option/warrant price per share, outstanding, ending | 0.40 | 0.40 | |
Weighted Average Exercise Price Outstanding, ending | $ 0.40 | $ 0.40 | |
Warrants, Weighted Average Contractual Life, Beginning | 3 years 6 months | 4 years 6 months | 5 years 6 months |
Granted | 0 | 0 | |
Range of option/warrant price per share, Granted | $ 0 | $ 0 | |
Weighted Average Exercise Price, Granted | $ 0 | $ 0 | |
Outstanding, ending | 3,333 | 3,333 | |
Weighted Average Exercise Price Outstanding, ending | $ 0.40 | $ 0.40 | |
Exercisable, ending | 3,333 | ||
Range of option/warrant price per share, Exercisable ending | 0.40 | ||
Exercisable, ending | $ 0.40 | ||
Warrants, Weighted Average Contractual Life, ending | 3 years 6 months |
Stockholders_ (Deficit) (Detail
Stockholders’ (Deficit) (Details Narrative) - USD ($) | May 13, 2021 | May 18, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2019 | Jun. 20, 2017 | Sep. 25, 2013 | Aug. 12, 2010 |
Class of Stock [Line Items] | ||||||||||
Capital stock authorized | 260,000,000 | 260,000,000 | ||||||||
Common stock, authorized | 250,000,000 | 250,000,000 | 250,000,000 | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Share-based compensation expense for options | $ 76,221 | $ 74,386 | $ 158,728 | $ 15,342 | ||||||
Total unrecognized compensation expense | $ 264,111 | |||||||||
Weighted average period expected to recognized compensation expense (in years) | 1 year 6 months | 3 years | ||||||||
Series A Preferred Stock Dividend Rate | 10.00% | 10.00% | ||||||||
Accrued dividends | $ 0 | $ 1,115,674 | $ 970,997 | |||||||
Aggregate of shares | 1,600,000 | |||||||||
Exercise price | $ 7.425 | |||||||||
Representative, warrants to purchase | 80,000 | |||||||||
Warrants are exercisable price | $ 7.425 | |||||||||
Stock option exercise | 6,592 | |||||||||
Stock option exercise | 5,060 | |||||||||
Conversion of Stock, Shares Converted | 1,401,786 | |||||||||
Accured unpaid dividends | $ 1,179,357 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Conversion of Stock, Shares Converted | 43,806 | |||||||||
2010 Incentive Award Plan [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock available for issuance | 50,000 | |||||||||
Reserved shares of common stock for issuance | 250,000 | 200,000 | 125,000 | |||||||
Maximum term of stock option from the date of grant | 10 years | |||||||||
Options outstanding | 207,650 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forward | $ 1,313,000 | $ 1,419,000 |
Less: valuation allowance | (1,313,000) | (1,419,000) |
Net deferred tax asset |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||||
Expected income tax benefit (loss) at statutory rate of 21% | $ 79,000 | $ 22,000 | ||||
State and local tax benefit (loss), net of federal | 27,000 | 7,500 | ||||
Change in valuation account | (4,000) | (29,500) | ||||
Income tax expense (benefit) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | Dec. 31, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards federal | $ 4,725,000 |
Operating loss carryforwards state | $ 4,325,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transactions [Abstract] | ||||
Proceeds from related party debt | $ 3,968 | $ 0 | $ 37,954 | $ 12,794 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 08, 2021 | Mar. 04, 2021 | Jul. 21, 2021 | Feb. 04, 2021 | Jun. 30, 2021 |
Subsequent Event [Line Items] | |||||
Investors exercised shares | 455,390 | ||||
Investors exercised amount | $ 3,381,271 | ||||
Warrant [Member] | |||||
Subsequent Event [Line Items] | |||||
Investors exercised shares | 455,390 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Subsequent event, description | Pursuant to the Merger, all of the Equity Interests that are issued and outstanding immediately prior to the effectiveness of the filing of the Articles of Merger by Flagship and Merger Sub with the Secretary of State of the State of Florida, will be converted into the right to receive an aggregate amount equal to up to $10,500,000, consisting of $5,550,000, payable in cash, subject to reduction by the amount of any excluded liabilities assumed by the Company at Closing and subject to adjustment as set forth below in connection with a net working capital adjustment, and up to $4,950,000, payable in shares of the Company’s common stock, subject to reduction by the amount by which the valuation of Flagship (the “Flagship Valuation”), as calculated based on Flagship’s unaudited pro forma 2018 financial statements and audited 2019 and 2020 financial statements (the “2020 Audit”), is less than $10,500,000. In the event that the Flagship Valuation, as calculated based on the 2020 Audit, is less than $10,500,000, then, within fifteen (15) days after completion of the audit of Flagship’s financial statements for its 2019, 2020 and 2021 fiscal years (the “2021 Audit”), the Company has agreed to pay the Equityholders, in shares of the Company’s common stock, the amount by which the Flagship Valuation, as calculated based on the 2021 Audit, exceeds the sum of $5,550,000 and the value of the shares merger consideration paid by us to the Equityholders at Closing. | ||||
Transaction fees and expenses | $ 100,000 | ||||
Public offering description | the Company completed an equity offering whereas the Company sold 1,375,000 shares of common stock and 1,031,250 warrants for net proceeds of $7.6 million. The warrants have an exercise price of $6.14 and a term of five and a half years | ||||
Subsequent Event [Member] | N 2021 Plan [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares issued | 375,000 | ||||
Subsequent Event [Member] | Systems Trading [Member] | |||||
Subsequent Event [Line Items] | |||||
Monthly installments | $ 1,567 | ||||
Lease expiration date | Mar. 31, 2024 | ||||
Interest rate | 8.00% |
Note payable (Details Narrative
Note payable (Details Narrative) - Paycheck Protection Program [Member] | 1 Months Ended |
Apr. 30, 2020USD ($) | |
Debt Instrument [Line Items] | |
Proceeds from loans | $ 481,977 |
Debt instrument, maturity date | Apr. 30, 2022 |
Debt instrument, interest rate | 1.00% |
Merger (Details)
Merger (Details) - Flagship Solutions [Member] | Jun. 30, 2021USD ($) |
Purchase price: | |
Cash paid to seller | $ 6,149,343 |
Contingent Consideration - shares | 4,950,000 |
Total purchase price | 11,099,343 |
Assets acquired: | |
Cash | 212,068 |
Accounts Receivable | 1,389,263 |
Prepaid Expenses | 127,574 |
Fixed Assets | 4,986 |
Website and Digital Assets | 33,002 |
Security Deposits | 22,500 |
Total assets acquired | 1,789,393 |
Liabilities assumed: | |
Accounts payable and accrued expenses | 514,354 |
Deferred Revenue | 68,736 |
PPP Loan Payable | 307,300 |
Total liabilities assumed | 890,390 |
Net assets acquired | 899,003 |
Excess purchase price | $ 10,200,340 |
Merger (Details 1)
Merger (Details 1) - Flagship Solutions [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 7,759,779 | $ 4,612,967 | $ 14,270,565 | $ 9,613,734 |
Net income attributable to common shareholders | $ 1,288,367 | $ 437,524 | $ 1,202,704 | $ 304,889 |
Net income per share | $ 0.41 | $ 0.12 | $ 0.32 | $ 0.08 |
Weighted average number of shares outstanding | 3,751,825 | 3,751,825 | 3,751,825 | 3,751,825 |