Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-35384 | |
Entity Registrant Name | DATA STORAGE CORPORATION | |
Entity Central Index Key | 0001419951 | |
Entity Tax Identification Number | 98-0530147 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,859,627 | |
Common Stock, par value $0.001 per share [Member] | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | DTST | |
Security Exchange Name | NASDAQ | |
Warrants to purchase shares of Common Stock, par value $0.001 per share [Member] | ||
Title of 12(b) Security | Warrants to purchase shares of Common Stock, par value $0.001 per share | |
Trading Symbol | DTSTW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash | $ 993,388 | $ 2,286,722 |
Accounts Receivable (less allowance for credit losses of $49,460 and $27,250 in 2023 and 2022, respectively) | 2,344,343 | 3,502,836 |
Marketable securities | 10,531,921 | 9,010,968 |
Prepaid expenses and other current assets | 872,033 | 584,666 |
Total Current Assets | 14,741,685 | 15,385,192 |
Property and Equipment: | ||
Property and Equipment | 7,540,204 | 7,168,488 |
Less—Accumulated Depreciation | (4,801,184) | (4,956,698) |
Net Property and Equipment | 2,739,020 | 2,211,790 |
Other Assets: | ||
Goodwill | 4,238,671 | 4,238,671 |
Operating Lease Right-of-Use Assets | 89,547 | 226,501 |
Other Assets | 48,437 | 48,437 |
Intangible Assets, net | 1,767,231 | 1,975,644 |
Total Other Assets | 6,143,886 | 6,489,253 |
Total Assets | 23,624,591 | 24,086,235 |
Current Liabilities: | ||
Accounts Payable and Accrued Expenses | 2,858,724 | 3,207,577 |
Deferred Revenue | 259,542 | 281,060 |
Finance Leases Payable Short Term | 266,937 | 359,868 |
Finance Leases Payable Related Party Short Term | 323,808 | 520,623 |
Operating Lease Liabilities Short Term | 90,979 | 160,657 |
Total Current Liabilities | 3,799,990 | 4,529,785 |
Operating Lease Liabilities | 71,772 | |
Finance Leases Payable | 79,652 | 281,242 |
Finance Leases Payable Related Party | 60,769 | 256,241 |
Total Long-Term Liabilities | 140,421 | 609,255 |
Total Liabilities | 3,940,411 | 5,139,040 |
Commitments and Contingencies (Note 6) | ||
Stockholders’ Equity: | ||
Preferred Stock, Series A par value $0.001; 10,000,000 shares authorized; 0 and 0 shares issued and outstanding in 2023 and 2022, respectively | ||
Common Stock, par value $0.001; 250,000,000 shares authorized; 6,859,627 and 6,822,127 shares issued and outstanding in 2023 and 2022, respectively | 6,860 | 6,822 |
Additional Paid in Capital | 39,320,548 | 38,982,440 |
Accumulated Deficit | (19,430,878) | (19,887,378) |
Total Data Storage Corporation Stockholders’ Equity | 19,896,530 | 19,101,884 |
Non-Controlling Interest in Consolidated Subsidiary | (212,350) | (154,689) |
Total Stockholder’s Equity | 19,684,180 | 18,947,195 |
Total Liabilities and Stockholders’ Equity | $ 23,624,591 | $ 24,086,235 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Allowance for credit losses | $ 49,460 | $ 27,250 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 6,859,627 | 6,822,127 |
Common stock, shares outstanding | 6,859,627 | 6,822,127 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Sales | $ 5,986,625 | $ 4,419,285 | $ 18,770,739 | $ 17,904,233 |
Cost of Sales | 3,656,271 | 2,566,984 | 11,771,886 | 11,847,460 |
Gross Profit | 2,330,354 | 1,852,301 | 6,998,853 | 6,056,773 |
Selling, General and Administrative | 2,316,213 | 2,075,525 | 6,918,982 | 7,129,595 |
Income (Loss) from Operations | 14,141 | (223,224) | 79,871 | (1,072,822) |
Other Income (Expense) | ||||
Interest Income (Expense), net | 143,597 | (29,739) | 318,968 | (186,063) |
Total Other Income (Expense) | 143,597 | (29,739) | 318,968 | (186,063) |
Income (Loss) Before Provision for Income Taxes | 157,738 | (252,963) | 398,839 | (1,258,885) |
Benefit from Income Taxes | ||||
Net Income (Loss) | 157,738 | (252,963) | 398,839 | (1,258,885) |
Loss in Non-Controlling Interest of Consolidated Subsidiary | 21,273 | 7,344 | 57,661 | 30,177 |
Net Income (Loss) attributable to Data Storage Corporation | $ 179,011 | $ (245,619) | $ 456,500 | $ (1,228,708) |
Earnings Per Share – Basic | $ 0.03 | $ (0.04) | $ 0.06 | $ (0.18) |
Earnings Per Share – Diluted | $ 0.02 | $ (0.04) | $ 0.06 | $ (0.18) |
Weighted Average Number of Shares - Basic | 6,847,264 | 6,822,127 | 6,834,811 | 6,759,247 |
Weighted Average Number of Shares - Diluted | 7,246,250 | 6,822,127 | 7,212,048 | 6,759,247 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - 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, 2021 | $ 6,694 | $ 38,241,155 | $ (15,530,576) | $ (102,628) | $ 22,614,645 | |
Beginning balance, shares at Dec. 31, 2021 | 6,693,793 | |||||
Stock Options Exercise | $ 3 | 6,931 | 6,934 | |||
Stock options exercise, shares | 3,334 | |||||
Stock-Based Compensation | $ 125 | 643,805 | 643,930 | |||
Stock based compensation, shares | 125,000 | |||||
Net Income (Loss) | (1,228,708) | (30,177) | (1,258,885) | |||
Ending balance, value at Sep. 30, 2022 | $ 6,822 | 38,891,891 | (16,759,284) | (132,805) | 22,006,624 | |
Ending balance, shares at Sep. 30, 2022 | 6,822,127 | |||||
Beginning balance, value at Jun. 30, 2022 | $ 6,822 | 38,799,853 | (16,513,665) | (125,461) | 22,167,549 | |
Beginning balance, shares at Jun. 30, 2022 | 6,822,127 | |||||
Stock-Based Compensation | 92,038 | 92,038 | ||||
Net Income (Loss) | (245,619) | (7,344) | (252,963) | |||
Ending balance, value at Sep. 30, 2022 | $ 6,822 | 38,891,891 | (16,759,284) | (132,805) | 22,006,624 | |
Ending balance, shares at Sep. 30, 2022 | 6,822,127 | |||||
Beginning balance, value at Dec. 31, 2022 | $ 6,822 | 38,982,440 | (19,887,378) | (154,689) | 18,947,195 | |
Beginning balance, shares at Dec. 31, 2022 | 6,822,127 | |||||
Stock-Based Compensation | $ 38 | 338,108 | 338,146 | |||
Stock based compensation, shares | 37,500 | |||||
Net Income (Loss) | 456,500 | (57,661) | 398,839 | |||
Ending balance, value at Sep. 30, 2023 | $ 6,860 | 39,320,548 | (19,430,878) | (212,350) | 19,684,180 | |
Ending balance, shares at Sep. 30, 2023 | 6,859,627 | |||||
Beginning balance, value at Jun. 30, 2023 | $ 6,847 | 39,191,598 | (19,609,889) | (191,077) | 19,397,479 | |
Beginning balance, shares at Jun. 30, 2023 | 6,847,127 | |||||
Stock-Based Compensation | $ 13 | 128,950 | 128,963 | |||
Stock based compensation, shares | 12,500 | |||||
Net Income (Loss) | 179,011 | (21,273) | 157,738 | |||
Ending balance, value at Sep. 30, 2023 | $ 6,860 | $ 39,320,548 | $ (19,430,878) | $ (212,350) | $ 19,684,180 | |
Ending balance, shares at Sep. 30, 2023 | 6,859,627 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows from Operating Activities: | ||
Net Income (Loss) | $ 398,839 | $ (1,258,885) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 928,180 | 932,328 |
Stock based compensation | 338,145 | 643,930 |
Changes in Assets and Liabilities: | ||
Accounts receivable | 1,158,493 | 373,201 |
Other assets | (63,023) | |
Prepaid expenses and other current assets | (287,368) | (331,618) |
Right of use asset | 136,954 | 145,853 |
Accounts payable and accrued expenses | (348,851) | 147,487 |
Deferred revenue | (21,518) | (295,822) |
Operating lease liability | (141,450) | (147,759) |
Net Cash Provided by Operating Activities | 2,161,424 | 145,692 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (1,246,996) | (62,564) |
Purchase of marketable securities | (1,520,953) | |
Net Cash Used in Investing Activities | (2,767,949) | (62,564) |
Cash Flows from Financing Activities: | ||
Repayments of finance lease obligations related party | (392,287) | (644,209) |
Repayments of finance lease obligations | (294,522) | (299,954) |
Cash received for the exercised of options | 6,935 | |
Net Cash Used in Financing Activities | (686,809) | (937,228) |
Decrease in Cash and Cash Equivalents | (1,293,334) | (854,100) |
Cash and Cash Equivalents, Beginning of Period | 2,286,722 | 12,135,803 |
Cash and Cash Equivalents, End of Period | 993,388 | 11,281,703 |
Supplemental Disclosures: | ||
Cash paid for interest | 48,471 | 100,482 |
Cash paid for income taxes | ||
Non-cash investing and financing activities: | ||
Assets acquired by finance lease | $ 1,094,051 |
Basis of Presentation, Organiza
Basis of Presentation, Organization and Other Matters | 9 Months Ended |
Sep. 30, 2023 | |
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”) headquartered in Melville, NY, provides cloud-based solutions and IT services to businesses within the healthcare, banking and finance, distribution services, manufacturing, construction, education, and government industries. DSC derives its revenues from subscription managed cloud services and solutions, IT managed services, equipment, software and maintenance, and onboarding implementation. DSC maintains cloud-based infrastructure and storage equipment in seven technical centers in New York, Massachusetts, Texas, Florida, North Carolina, and Canada. On May 31, 2021, the Company completed an acquisition of Flagship Solutions, LLC (“Flagship”) (a Florida limited liability company) and its wholly-owned subsidiary, Data Storage FL, LLC. Flagship is a provider of Hybrid Cloud solutions, IT managed services and equipment. On January 27, 2022, the Company formed Information Technology Acquisition Corporation a special purpose acquisition company for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial statements for interim periods in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). The Company’s accounting policies are described in the “Notes to Consolidated Financial Statements” in the 2022 Form 10-K and are updated, as necessary, in this Form 10-Q. The December 31, 2022, condensed consolidated balance sheet data presented for comparative purposes was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP. The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the operating results for the full year or for any other subsequent interim period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Principles of Consolidation The Consolidated Financial statements include the accounts of the Company and its wholly-owned subsidiaries, (i) CloudFirst Technologies Corporation, a Delaware corporation (“CloudFirst”), (ii) Data Storage FL, LLC, a Florida limited liability company, (iii) Flagship Solutions, LLC, a Florida limited liability company, (iv) Information Technology Acquisition Corporation, a Delaware Corporation, and (v) its majority-owned subsidiary, Nexxis Inc., a Nevada corporation. All inter-company transactions and balances have been eliminated in consolidation. 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 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 the Company’s own assumptions in determining the fair value of investments) The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable securities, accounts payable, prepaid, and other current assets. Management believes the estimated fair value of these accounts at 30, 2023 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments. The Company’s Level 2 assets/liabilities include certain of the Company’s operating lease right-of-use assets. 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. 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 discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company’s marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of 30, 2023 and December 31, 2022 are $ 10,531,921 9,010,968 Recently adopted accounting standards: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements or financial statement disclosures. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis. Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, operating lease right-of-use assets, goodwill, and other intangible assets. These assets are measured using Level 3 inputs, if determined to be impaired. 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. Investments The Company invests in equity securities and reports them in accordance with ASU 2016-01. Equity securities are reported at fair value with unrealized gains and losses, net of the related tax effect, reflected as a gain or loss on the statement of operations. Dividends and interest are recognized when earned. The following table sets forth a summary of the changes in equity investments, at cost that are measured at fair value on a non-recurring basis: Schedule of changes in equity investments For the nine months ended September 30, 2023 Total As of January 1, 2023 $ 9,010,968 Purchase of equity investments 103,423 As of March 31, 2023 9,114,391 Purchase of equity investments 115,863 As of June 30, 2023 $ 9,230,254 Purchase of equity investments 1,301,667 As of September 30, 2023 $ 10,531,921 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. As of September 30, 2023, the Company had three customers with an accounts receivable balance representing 16 14 10 23 14 For the three months ended September 30, 2023, the Company had one customer that accounted for 13 14 15 11 20 14 Accounts Receivable/Allowance for Credit Losses The Company sells its services to customers on an open credit basis. Accounts receivables 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 five to seven 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. Goodwill and Other Intangibles 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. The Company tests goodwill for impairment on an annual basis on December 31, or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has four reporting units. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of the Company’s reporting units to generate cash flows as measures of fair value of its reporting units. 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) Cloud Infrastructure and Disaster Recovery Revenue Cloud Infrastructure provides clients the ability to migrate their on-premises computing and digital storage to DSC’s enterprise-level technical compute and digital storage assets located in Tier 3 data centers. Data Storage Corporation owns the assets and provides a turnkey solution whereby achieving reliable and cost-effective, multi-tenant IBM Power compute, x86/intel, flash digital storage, while providing disaster recovery and cyber security while eliminating client capital expenditures. The client pays a monthly fee and can increase capacity as required. Clients can subscribe to an array of disaster recovery solutions. Product offerings provided directly from DSC are High Availability, Data Vaulting and retention solutions, including standby servers which allows clients to centralize and streamline their mission-critical digital information and technical environment while ensuring business continuity if they experience a cyber-attack or natural disaster Client’s data is vaulted, at two data centers with the maintenance of retention schedules for corporate governances and regulations all to meet their back to work objective in a disaster. 2) Managed Services These services are performed at the inception and continue through the term of the agreement. The Company provides professional assistance to its clients during the implementation 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 supplementing the client’s staff. 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, operating system and software patch management, annual recovery tests and manufacturer support for equipment and on-gong monitoring of client system performance. 3) Equipment and Software The Company provides equipment and software and actively participates in collaboration with IBM and other equipment manufacturers and software companies to provide innovative business solutions to clients. 4) Nexxis Voice over Internet and Direct Internet Access The Company provides VoIP, Internet access and data transport services to ensure businesses are fully connected to the internet from any location, remote and on premise. The Company provides Hosted VoIP solutions with equipment options for IP phones and internet speeds of up to 10Gb delivered over fiber optics. Disaggregation of revenue In the following table, revenue is disaggregated by major product line, geography, and timing of revenue recognition. For the Three Months Ended September 30, 2023 Schedule of revenue is disaggregated by major product United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,435,939 $ 53,550 $ 2,489,489 Equipment and Software 2,004,410 — 2,004,410 Managed Services 1,167,808 33,307 1,201,115 Nexxis VoIP Services 255,963 — 255,963 Other 35,648 — 35,648 Total Revenue $ 5,899,768 $ 86,857 $ 5,986,625 For the Three Months Ended September 30, 2022 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,120,592 $ 47,039 $ 2,167,631 Equipment and Software 1,021,451 — 1,021,451 Managed Services 966,346 33,307 999,653 Nexxis VoIP Services 203,191 — 203,191 Other 27,359 — 27,359 Total Revenue $ 4,338,939 $ 80,346 $ 4,419,285 For the Three Months Ended September 30, Timing of revenue recognition 2023 2022 Products transferred at a point in time $ 2,220,708 $ 1,112,748 Products and services transferred over time 3,765,917 3,306,537 Total Revenue $ 5,986,625 $ 4,419,285 For the Nine Months Ended September 30, 2023 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 6,801,094 $ 157,458 $ 6,958,552 Equipment and Software 7,076,116 — 7,076,116 Managed Services 3,787,722 103,341 3,891,063 Nexxis VoIP Services 728,447 — 728,447 Other 116,561 — 116,561 Total Revenue $ 18,509,940 $ 260,799 $ 18,770,739 For the Nine Months Ended September 30, 2022 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,964,383 $ 142,904 $ 6,107,287 Equipment and Software 7,309,400 — 7,309,400 Managed Services 3,709,657 99,921 3,809,578 Nexxis VoIP Services 587,051 — 587,051 Other 90,917 — 90,917 Total Revenue $ 17,661,408 $ 242,825 $ 17,904,233 For the Nine Months Ended September 30, Timing of revenue recognition 2023 2022 Products transferred at a point in time $ 8,204,003 $ 7,400,316 Products and services transferred over time 10,566,736 10,503,917 Total Revenue $ 18,770,739 $ 17,904,233 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 3) Cloud Infrastructure 4) Internet 5) Support and Maintenance 6) Implementation / Set-Up Fees 7) Equipment sales 9) License Disaster Recovery and Business Continuity Solutions Subscription services allow clients to access data or receive services for a predetermined period of time. As the client obtains access at a point in time and 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 a separate performance obligation. Set-up services are performed one-time and accordingly the revenue is recognized at the point in time, and is non-refundable, and the Company is entitled to the payment. Equipment Sales The obligation for the equipment sales is such that the control of the product transfer is at a point in time (i.e., when the goods have been shipped or delivered to the client’s location, depending on shipping terms). Noting that the satisfaction of the performance obligation, in this sense, does not occur over time, the performance obligation is considered to be satisfied at a point in time 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 Performance obligations as it relates to licensing means that the control of the product transfers, either at a point in time or over time, depending on the nature of the license. The revenue standard identifies two types of licenses of IP: (i) a right to access IP; and (ii) 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 typical terms of subscription contracts range from 12 to 36 months, with auto-renew options extending the contract for an additional term. The Company invoices clients one month in advance for its services, in addition to any contractual data overages or for additional services. Equipment, software, and managed services are typically invoiced on net 30-day terms and are non-subscription based. Warranties The Company offers guaranteed service levels and service guarantees on some of its contracts. These warranties are not sold separately and are accounted as “assurance warranties”. Significant Judgement In the instance where contracts have multiple performance obligations the Company uses judgment to establish a stand-alone price for each performance obligation. 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 is calculated to determine the aggregate price for the individual services. The proportion of each individual service to the aggregate price is determined. The ratio is applied to the total contract price in order to allocate the transaction price to each performance obligation. Impairment of Long-Lived Assets 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 un-discounted future cash flows. Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred $ 165,403 263,485 581,423 669,278 Stock-Based Compensation The Company 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 the 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. The Company’s calculation of estimated volatility is based on historical stock prices over a period equal to the expected life of the awards. Net Income (Loss) Per Common Share Basic income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income 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 nine months ended September 30, 2023, and 2022: Schedule of earning per share basic and diluted For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net Income (Loss) Available to Common Shareholders $ 179,011 $ (245,619 ) $ 456,500 $ (1,228,708 ) Weighted average number of common shares - basic 6,847,264 6,822,127 6,834,811 6,759,247 Dilutive Securities Options 398,986 — 377,237 — Warrants — — — — Weighted average number of common shares - diluted 7,246,250 6,822,127 7,212,048 6,759,247 Earnings (Loss) per share, basic $ 0.03 $ (0.04 ) $ 0.06 $ (0.18 ) Earnings (Loss) per share, diluted $ 0.02 $ (0.04 ) $ 0.06 $ (0.18 ) The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income (loss) per share because their effect was anti-dilutive: Schedule of anti-dilutive income (loss) per share Three Months ended September 30, Nine Months ended September 30, 2023 2022 2023 2022 Options 210,211 290,330 231,960 290,330 Warrants 2,415,860 2,419,193 2,415,860 2,419,193 2,626,071 2,709,523 2,647,820 2,709,523 |
Prepaids and other current asse
Prepaids and other current assets | 9 Months Ended |
Sep. 30, 2023 | |
Prepaids And Other Current Assets | |
Prepaids and other current assets | Note 3 - Prepaids and other current assets Prepaids and other current assets consist of the following: Schedule of Prepaids and other current assets September 30, December 31, 2023 2022 Prepaid Marketing & Promotion $ 70,691 $ 4,465 Prepaid Subscriptions and Licenses 650,191 439,088 Prepaid Maintenance 67,840 45,216 Prepaid Insurance 50,409 54,564 Other 32,903 41,333 Total prepaid and other current assets $ 872,034 $ 584,666 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4- Property and Equipment Property and equipment, at cost, consist of the following: Schedule of Property and Equipment September 30, December 31, 2023 2022 Storage Equipment $ 60,288 $ 60,288 Furniture and Fixtures 21,625 20,860 Leasehold Improvements 20,983 20,983 Computer Hardware and Software 113,427 93,062 Data Center Equipment 7,323,881 6,973,295 Gross Property and equipment 7,540,204 7,168,488 Less: Accumulated Depreciation (4,801,184 ) (4,956,698 ) Net Property and Equipment $ 2,739,020 $ 2,211,790 Depreciation expense for the three months ended September 30, 2023, and 2022 was $ 269,372 222,009 719,766 724,315 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 5 - Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following: Schedule of goodwill and intangible assets Estimated life in years Gross amount December 31, 2022, Accumulated Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 4,238,671 $ — $ 4,238,671 Trademarks Indefinite 514,268 — 514,268 Total intangible assets not subject to amortization 4,752,939 — 4,752,939 Intangible assets subject to amortization Customer lists 7 2,614,099 1,167,075 1,447,024 ABC acquired contracts 5 310,000 310,000 — SIAS acquired contracts 5 660,000 660,000 — Non-compete agreements 4 272,147 272,147 — Website and Digital Assets 3 33,002 18,650 14,352 Total intangible assets subject to amortization 3,889,248 2,427,872 1,461,376 Total Goodwill and Intangible Assets $ 8,642,187 $ 2,427,872 $ 6,214,315 Estimated life in years Gross amount September 30, 2023, Accumulated Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 4,238,671 $ — $ 4,238,671 Trademarks Indefinite 514,268 — 514,268 Total intangible assets not subject to amortization 4,752,939 — 4,752,939 Intangible assets subject to amortization Customer lists 7 2,614,099 1,367,432 1,246,667 ABC acquired contracts 5 310,000 310,000 — SIAS acquired contracts 5 660,000 660,000 — Non-compete agreements 4 272,147 272,147 — Website and digital assets 3 33,002 26,705 6,297 Total intangible assets subject to amortization 3,889,248 2,636,285 1,252,963 Total Goodwill and Intangible Assets $ 8,642,187 $ 2,636,285 $ 6,005,902 Scheduled amortization over the next five years are as follows: Schedule of amortization over the next two years Twelve months ending September 30, 2024 $ 273,439 2025 267,143 2026 267,143 2027 267,143 2028 133,571 Thereafter 44,524 Total $ 1,252,963 Amortization expense for the three months ended September 30, 2023, and 2022 was $ 69,147 69,730 208,143 209,191 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | Note 6- Leases Operating Leases The Company currently maintains 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 the Company’s existing lease in the same building. The base annual rent is $ 11,856 988 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 On July 31, 2021, the Company signed a three-year lease for approximately 2,880 square feet of office space at 980 North Federal Highway, Boca Raton, FL. The commencement date of the lease was August 2, 2021 4,965 The Company leases cages and racks for technical space in Tier 3 data centers in New York, Massachusetts, and North Carolina. These leases are month to month. The monthly rent is approximately $ 39,000 1,403 On January 1, 2022, the Company entered into a lease agreement for office space with WeWork in Austin, TX. The lease term is six months and requires monthly payments of $ 1,470 June 30, 2022 3,073 Finance Lease Obligations On June 1, 2020, the Company entered into a lease agreement with a finance company to lease technical equipment. The lease obligation is payable in monthly installments of $ 5,008 7 June 1, 2023 On June 29, 2020, the Company entered into a lease agreement for technical equipment with a finance company. The lease obligation is payable in monthly installments of $ 5,050 7 June 29, 2023 On July 31, 2020, the Company entered into a lease agreement for technical equipment with a finance company. The lease obligation is payable in monthly installments of $ 4,524 7 July 31, 2023 On November 1, 2021, the Company entered into a lease agreement with a finance company for technical equipment. The lease obligation is payable in monthly installments of $ 3,152 6 November 1, 2024 On January 1, 2022, the Company entered into a lease agreement with a finance company for technical equipment. The lease obligation is payable in monthly installments of $ 17,718 5 January 1, 2025 On January 1, 2022, the Company entered into a technical equipment lease with a finance company. The lease obligation is payable in monthly installments of $ 2,037 6 January 1, 2025 Finance Lease Obligations – Related Party 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 March 1, 2024 On January 1, 2020, the Company entered into a lease agreement with Systems Trading to lease equipment. The lease obligation is payable to Systems Trading with monthly installments of $ 10,534 6 December 31, 2022 On March 4, 2021, the Company entered into a lease agreement with Systems Trading effective April 1, 2021. This lease obligation is payable to Systems Trading with monthly installments of $ 1,567 March 16, 2024 8 On January 1, 2022, the Company entered into a lease agreement with Systems Trading effective January 1, 2022. This lease obligation is payable to Systems Trading with monthly installments of $ 7,145 February 1, 2025 8 On April 1, 2022, the Company entered into a lease agreement with Systems Trading effective May 1, 2022. This lease obligation is payable to Systems Trading with monthly installments of $ 6,667 April 1, 2025 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 5 The components of lease expense were as follows and include both related party and non-related finance leases combined: Schedule of components of lease expense Three Months Ended Finance Leases: Amortization of assets, included in depreciation and amortization expense $ 91,250 Interest on lease liabilities, included in interest expense 7,409 Operating Lease: Amortization of assets, included in total operating expense 31,389 Interest on lease liabilities, included in total operating expense 2,573 Total net lease cost $ 132,621 Nine Months Ended September 30, 2023 Finance Leases: Amortization of assets, included in depreciation and amortization expense $ 527,958 Interest on lease liabilities, included in interest expense 48,471 Operating Lease: Amortization of assets, included in total operating expense 141,012 Interest on lease liabilities, included in total operating expense 5,279 Total net lease cost $ 722,720 Supplemental balance sheet information related to leases was as follows: Operating Leases: Operating lease right-of-use asset $ 89,547 Current operating lease liabilities $ 90,979 Noncurrent operating lease liabilities — Total operating lease liabilities $ 90,979 September 30, 2023 Finance Leases: Property and equipment, at cost $ 5,521,716 Accumulated amortization (4,050,770 ) Property and equipment, net $ 1,470,946 Current obligations of finance leases $ 590,745 Finance leases, net of current obligations 140,421 Total finance lease liabilities $ 731,166 Supplemental cash flow and other information related to leases were as follows Schedule of supplemental cash flow and other information related to leases Nine Months Ended September 30, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 141,450 Financing cash flows related to finance leases $ 686,809 Weighted average remaining lease term (in years): Operating Leases 0.84 Finance Leases 2.80 Weighted average discount rate: Operating Leases 4 % Finance Leases 7 % Long-term obligations under the operating and finance leases at September 30, 2023, mature as follows and include both related party and non-related finance leases combined: Schedule of related party and non-related finance leases For the Twelve Months Ended September 30, Operating Leases Finance Leases 2023 $ 92,550 $ 601,930 2024 — 159,703 Total lease payments 92,550 761,633 Less: Amounts representing interest (1,571 ) (30,467 ) Total lease obligations 90,979 731,166 Less: long-term obligations — (140,421 ) Total current $ 90,979 $ 590,745 As of September 30, 2023, the Company had no additional significant operating or finance leases that had not yet commenced. Rent expense under all operating leases for the three months ended September 30, 2023, and 2022 was $ 69,974 53,991 205,241 159,236 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 - Commitments and Contingencies As part of the Flagship acquisition the Company acquired a licensing agreement for marketing related materials with a National Football League team. The Company has approximately $ 1.3 5 |
Stockholders_ (Deficit)
Stockholders’ (Deficit) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders’ (Deficit) | Note 8 – Stockholders’ (Deficit) Capital Stock The Company has 260,000,000 250,000,000 .001 10,000,000 .001 Common Stock Options On June 2, 2023 the Company registered an additional 700,000 A summary of the Company’s options activity and related information follows: Schedule of option activity and related information Number of Weighted Weighted Shares Range of Average Average Under Option Price Exercise Contractual Options Per Share Price Life Options Outstanding at January 1, 2023 301,391 $ 15.76 1.48 $ 3.46 7.45 Options Granted 307,343 1.96 1.52 1.83 10.00 Exercised — — — — Expired/Cancelled (29,213 ) 5.80 2.16 3.76 — Options Outstanding at September 30, 2023 579,521 $ 14.00 1.48 $ 2.58 8.30 Options Exercisable at September 30, 2023 236,584 $ 14.00 1.48 $ 3.24 6.76 Share-based compensation expense for options totaling $ 81,520 74,143 211,223 215,968 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 the 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 September 30, 2023, there was $ 676,513 2.7 The weighted average fair value of options granted, and the assumptions used in the Black-Scholes model during the three months ended September 30, 2023, and 2022, are set forth in the table below. Schedule of weighted average fair value of options granted 2023 2022 Weighted average fair value of options granted $ 1.77 $ 3.00 Risk-free interest rate 3.41 4.59 % 1.63 3.83 % Volatility 195 199 % 204 214 % Expected life (years) 10 10 Dividend yield $ — % $ — % Share-based awards, restricted stock award (“RSAs”) On March 1, 2023, the Company granted certain employees an aggregate of 73,530 130,883 On March 28, 2023, the Company granted certain employees an aggregate of 44,942 72,357 On March 31, 2023, the Board resolved that the Company shall issue to Board members an aggregate of 12,500 22,750 On April 10, 2023, the Company granted certain employees an aggregate of 50,000 90,000 On June 30, 2023, the Board resolved that the Company shall issue to Board members an aggregate of 12,500 RSAs. Compensation expense as a group amounted to $29,125. The shares vest one year after issuance. On September 30, 2023, the Board resolved that the Company shall issue to Board members an aggregate of 12,500 38,875 A summary of the activity related to RSUs for the nine months ended September 30, 2023, is presented below: Schedule of non-vested Restricted stock units Total Grant Date Restricted Stock Units (RSUs) Shares Fair Value RSU’s non-vested at January 1, 2023 50,000 $ 1.48 3.23 RSU’s granted 205,972 $ 1.61 3.24 RSU’s vested (37,500 ) $ 2.04 3.23 RSU’s forfeited — $ — RSU’s non-vested September 30, 2023 218,472 $ 1.48 3.24 Stock-based compensation for RSUs has been recorded in the consolidated statements of operations and totaled $ 48,507 17,896 127,986 27,962 As of September 30, 2023, there was $ 320,344 |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Note 9 – Litigation The Company is currently not involved in any litigation that it believes could have a materially adverse effect on its 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 the Company’s company or any of its 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 | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 – Related Party Transactions Nexxis Capital LLC Charles M. 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 from Nexxis Capital of $ 14,267 and $ 19,494 during the three months ended September 30, 2023, and 2022 respectively. The Company received funds from Nexxis Capital of $ 30,048 and $ 33,530 during the nine months ended September 30, 2023, and 2022 respectively. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Note 11 – Segment Information The Company operates in three reportable segments: Nexxis Inc., Flagship Solutions Group, and CloudFirst. The Company’s segments were determined based on its internal organizational structure, the manner in which its operations are managed, and the criteria used by its Chief Operating Decision Maker (CODM) to evaluate performance, which is generally the segment’s operating income or losses. Schedule of segment operating income or losses Operations of: Products and services provided: Nexxis Inc. NEXXIS is a single-source solution provider that delivers fully-managed cloud-based voice services, data transport, internet access, and SD-WAN solutions focused on business continuity for today’s modern business environment. Flagship Solutions, LLC Flagship Solutions Group (FSG) is a managed service provider. FSG invoices clients primarily for services that assist the clients’ technical teams. FSG has few technical assets and utilizes the assets or software of other cloud providers, whereby managing 3rd party infrastructure. FSG has maintains technical assets on one data center. FSG periodically sells equipment and software. CloudFirst Technologies Corporation CloudFirst, provides services from CloudFirst technological assets deployed in six Tier 3 data centers throughout the USA and Canada. This technology has been developed by CloudFirst. Clients are invoiced for cloud infrastructure and disaster recovery on the CloudFirst platform. Services provided to clients are provided on a subscription basis on long term contracts. The following tables present certain financial information related to the Company’s reportable segments and Corporate: Schedule of financial information related to reportable segments As of September 30, 2023 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Accounts receivable $ 1,032,309 $ 1,283,809 $ 28,225 $ — $ 2,344,343 Prepaid expenses and other current assets 616,149 149,239 19,089 87,556 872,033 Net Property and Equipment 2,710,730 22,334 3,118 2,838 2,739,020 Intangible assets, net 279,268 1,487,963 — — 1,767,231 Goodwill 3,015,700 1,222,971 — — 4,238,671 Operating lease right-of-use assets — 89,547 — — 89,547 All other assets — — — 11,573,746 11,573,746 Total Assets $ 7,654,156 $ 4,255,863 $ 50,432 $ 11,664,140 $ 23,624,591 Accounts payable and accrued expenses $ 1,031,518 $ 1,351,349 $ 127,002 $ 348,855 $ 2,858,724 Deferred revenue 106,370 153,172 — — 259,542 Total Finance leases payable 346,589 — — — 346,589 Total Finance leases payable related party 384,577 — — — 384,577 Total Operating lease liabilities — 90,979 — — 90,979 Total Liabilities $ 1,869,054 $ 1,595,500 $ 127,002 $ 348,855 $ 3,940,411 As of December 31, 2022 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Accounts receivable $ 1,543,749 $ 1,924,184 $ 34,903 $ — $ 3,502,836 Prepaid expenses and other current assets 285,306 213,826 16,799 68,735 584,666 Net Property and Equipment 2,192,085 19,705 — — 2,211,790 Intangible assets, net 279,268 1,696,376 — — 1,975,644 Goodwill 3,015,700 1,222,971 — — 4,238,671 Operating lease right-of-use assets 58,740 167,761 — — 226,501 All other assets — — — 11,346,127 11,346,127 Total Assets $ 7,374,848 $ 5,244,823 $ 51,702 $ 11,414,862 $ 24,086,235 Accounts payable and accrued expenses $ 1,069,278 $ 1,563,408 $ 40,091 $ 534,800 $ 3,207,577 Deferred revenue 115,335 165,725 — — 281,060 Total Finance leases payable 641,110 — — — 641,110 Total Finance leases payable related party 776,864 — — — 776,864 Total Operating lease liabilities 62,960 169,469 — — 232,429 Total Liabilities $ 2,665,547 $ 1,898,602 $ 40,091 $ 534,800 $ 5,139,040 For the three months ended September 30, 2023 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 3,741,717 $ 1,974,343 $ 270,565 $ — $ 5,986,625 Cost of Sales 1,990,420 1,501,830 164,021 — 3,656,271 Gross Profit 1,751,297 472,513 106,544 — 2,330,354 Selling, General and Administrative 651,896 544,686 174,527 606,584 1,977,693 Depreciation and Amortization 267,440 70,691 213 176 338,520 Total Operating Expenses 919,336 615,377 174,740 606,760 2,316,213 Income (Loss) from Operations 831,961 (142,864 ) (68,196 ) (606,760 ) 14,141 Interest Expense, net (13,069 ) — — 156,666 143,597 Other Expense — — — — — Total Other Income (Expense) (13,069 ) — — 156,666 143,597 Income (Loss) before provision for income taxes $ 818,892 $ (142,864 ) $ (68,196 ) $ (450,094 ) $ 157,738 For the three months ended September 30, 2022 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 2,976,461 $ 1,218,990 $ 223,834 $ — $ 4,419,285 Cost of Sales 1,525,175 910,852 130,957 — 2,566,984 Gross Profit 1,451,286 308,138 92,877 — 1,852,301 Selling, General and Administrative 556,060 691,863 92,837 443,026 1,783,786 Depreciation and Amortization 220,810 70,929 — — 291,739 Total Operating Expenses 776,870 762,792 92,837 443,026 2,075,525 Income (Loss) from Operations 674,416 (454,654 ) 40 (443,026 ) (223,224 ) Interest Expense, net (29,123 ) (137 ) — (479 ) (29,739 ) Loss on Disposal of Equipment — — — — — Gain on Forgiveness of Debt — — — — — All Other Expenses — — — — — Total Other Income (Expense) (29,123 ) (137 ) — (479 ) (29,739 ) Income (Loss) before Provision for Income Taxes $ 645,293 $ (454,791 ) $ 40 $ (443,505 ) $ (252,963 ) For the nine months ended September 30, 2023 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 10,052,281 $ 7,918,016 $ 800,442 $ — $ 18,770,739 Cost of Sales 5,323,346 5,949,745 498,795 — 11,771,886 Gross Profit 4,728,935 1,968,271 301,647 — 6,998,853 Selling, General and Administrative 2,002,882 1,729,191 468,605 1,790,124 5,990,802 Depreciation and Amortization 714,585 212,646 492 457 928,180 Total Operating Expenses 2,717,467 1,941,837 469,097 1,790,581 6,918,982 Income (Loss) from Operations 2,011,468 26,434 (167,450 ) (1,790,581 ) 79,871 Interest Expense, net (56,985 ) — — 375,953 318,968 Total Other Income (Expense) (56,985 ) — — 375,953 318,968 Income (Loss) before Provision for Income Taxes $ 1,954,483 $ 26,434 $ (167,450 ) $ (1,414,628 ) $ 398,839 For the nine months ended September 30, 2022 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 8,200,881 $ 9,045,733 $ 657,619 $ — $ 17,904,233 Cost of Sales 4,289,894 7,146,441 411,125 — 11,847,460 Gross Profit 3,910,987 1,899,292 246,494 — 6,056,773 Selling, General and Administrative 1,712,409 2,807,096 278,785 1,398,977 6,197,267 Depreciation and Amortization 720,573 211,755 — — 932,328 Total Operating expenses 2,432,982 3,018,851 278,785 1,398,977 7,129,595 Income (Loss) from Operations 1,478,005 (1,119,559 ) (32,291 ) (1,398,977 ) (1,072,822 ) Interest Expense, net (108,052 ) (75,695 ) — (2,316 ) (186,063 ) Loss on Disposal of Equipment — — — — — Gain on Forgiveness of Debt — — — — — All Other Expenses — — — — — Total Other Income (Expense) (108,052 ) (75,695 ) — (2,316 ) (186,063 ) Income (Loss) before Provision for Income Taxes $ 1,369,953 $ (1,195,254 ) $ (32,291 ) $ (1,401,293 ) $ (1,258,885 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial statements include the accounts of the Company and its wholly-owned subsidiaries, (i) CloudFirst Technologies Corporation, a Delaware corporation (“CloudFirst”), (ii) Data Storage FL, LLC, a Florida limited liability company, (iii) Flagship Solutions, LLC, a Florida limited liability company, (iv) Information Technology Acquisition Corporation, a Delaware Corporation, and (v) its majority-owned subsidiary, Nexxis Inc., a Nevada corporation. All inter-company transactions and balances have been eliminated in consolidation. |
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. |
Estimated Fair Value of Financial Instruments | Estimated Fair Value of Financial Instruments 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 the Company’s own assumptions in determining the fair value of investments) The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable securities, accounts payable, prepaid, and other current assets. Management believes the estimated fair value of these accounts at 30, 2023 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments. The Company’s Level 2 assets/liabilities include certain of the Company’s operating lease right-of-use assets. 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. 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 discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company’s marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of 30, 2023 and December 31, 2022 are $ 10,531,921 9,010,968 |
Recently adopted accounting standards: | Recently adopted accounting standards: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements or financial statement disclosures. |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis. Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, operating lease right-of-use assets, goodwill, and other intangible assets. These assets are measured using Level 3 inputs, if determined to be impaired. |
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. |
Investments | Investments The Company invests in equity securities and reports them in accordance with ASU 2016-01. Equity securities are reported at fair value with unrealized gains and losses, net of the related tax effect, reflected as a gain or loss on the statement of operations. Dividends and interest are recognized when earned. The following table sets forth a summary of the changes in equity investments, at cost that are measured at fair value on a non-recurring basis: Schedule of changes in equity investments For the nine months ended September 30, 2023 Total As of January 1, 2023 $ 9,010,968 Purchase of equity investments 103,423 As of March 31, 2023 9,114,391 Purchase of equity investments 115,863 As of June 30, 2023 $ 9,230,254 Purchase of equity investments 1,301,667 As of September 30, 2023 $ 10,531,921 |
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. As of September 30, 2023, the Company had three customers with an accounts receivable balance representing 16 14 10 23 14 For the three months ended September 30, 2023, the Company had one customer that accounted for 13 14 15 11 20 14 |
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 receivables 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 five to seven 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. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles 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. The Company tests goodwill for impairment on an annual basis on December 31, or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has four reporting units. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of the Company’s reporting units to generate cash flows as measures of fair value of its reporting units. |
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) Cloud Infrastructure and Disaster Recovery Revenue Cloud Infrastructure provides clients the ability to migrate their on-premises computing and digital storage to DSC’s enterprise-level technical compute and digital storage assets located in Tier 3 data centers. Data Storage Corporation owns the assets and provides a turnkey solution whereby achieving reliable and cost-effective, multi-tenant IBM Power compute, x86/intel, flash digital storage, while providing disaster recovery and cyber security while eliminating client capital expenditures. The client pays a monthly fee and can increase capacity as required. Clients can subscribe to an array of disaster recovery solutions. Product offerings provided directly from DSC are High Availability, Data Vaulting and retention solutions, including standby servers which allows clients to centralize and streamline their mission-critical digital information and technical environment while ensuring business continuity if they experience a cyber-attack or natural disaster Client’s data is vaulted, at two data centers with the maintenance of retention schedules for corporate governances and regulations all to meet their back to work objective in a disaster. 2) Managed Services These services are performed at the inception and continue through the term of the agreement. The Company provides professional assistance to its clients during the implementation 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 supplementing the client’s staff. 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, operating system and software patch management, annual recovery tests and manufacturer support for equipment and on-gong monitoring of client system performance. 3) Equipment and Software The Company provides equipment and software and actively participates in collaboration with IBM and other equipment manufacturers and software companies to provide innovative business solutions to clients. 4) Nexxis Voice over Internet and Direct Internet Access The Company provides VoIP, Internet access and data transport services to ensure businesses are fully connected to the internet from any location, remote and on premise. The Company provides Hosted VoIP solutions with equipment options for IP phones and internet speeds of up to 10Gb delivered over fiber optics. Disaggregation of revenue In the following table, revenue is disaggregated by major product line, geography, and timing of revenue recognition. For the Three Months Ended September 30, 2023 Schedule of revenue is disaggregated by major product United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,435,939 $ 53,550 $ 2,489,489 Equipment and Software 2,004,410 — 2,004,410 Managed Services 1,167,808 33,307 1,201,115 Nexxis VoIP Services 255,963 — 255,963 Other 35,648 — 35,648 Total Revenue $ 5,899,768 $ 86,857 $ 5,986,625 For the Three Months Ended September 30, 2022 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,120,592 $ 47,039 $ 2,167,631 Equipment and Software 1,021,451 — 1,021,451 Managed Services 966,346 33,307 999,653 Nexxis VoIP Services 203,191 — 203,191 Other 27,359 — 27,359 Total Revenue $ 4,338,939 $ 80,346 $ 4,419,285 For the Three Months Ended September 30, Timing of revenue recognition 2023 2022 Products transferred at a point in time $ 2,220,708 $ 1,112,748 Products and services transferred over time 3,765,917 3,306,537 Total Revenue $ 5,986,625 $ 4,419,285 For the Nine Months Ended September 30, 2023 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 6,801,094 $ 157,458 $ 6,958,552 Equipment and Software 7,076,116 — 7,076,116 Managed Services 3,787,722 103,341 3,891,063 Nexxis VoIP Services 728,447 — 728,447 Other 116,561 — 116,561 Total Revenue $ 18,509,940 $ 260,799 $ 18,770,739 For the Nine Months Ended September 30, 2022 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,964,383 $ 142,904 $ 6,107,287 Equipment and Software 7,309,400 — 7,309,400 Managed Services 3,709,657 99,921 3,809,578 Nexxis VoIP Services 587,051 — 587,051 Other 90,917 — 90,917 Total Revenue $ 17,661,408 $ 242,825 $ 17,904,233 For the Nine Months Ended September 30, Timing of revenue recognition 2023 2022 Products transferred at a point in time $ 8,204,003 $ 7,400,316 Products and services transferred over time 10,566,736 10,503,917 Total Revenue $ 18,770,739 $ 17,904,233 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 3) Cloud Infrastructure 4) Internet 5) Support and Maintenance 6) Implementation / Set-Up Fees 7) Equipment sales 9) License |
Disaster Recovery and Business Continuity Solutions | Disaster Recovery and Business Continuity Solutions Subscription services allow clients to access data or receive services for a predetermined period of time. As the client obtains access at a point in time and 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 a separate performance obligation. Set-up services are performed one-time and accordingly the revenue is recognized at the point in time, and is non-refundable, and the Company is entitled to the payment. |
Equipment Sales | Equipment Sales The obligation for the equipment sales is such that the control of the product transfer is at a point in time (i.e., when the goods have been shipped or delivered to the client’s location, depending on shipping terms). Noting that the satisfaction of the performance obligation, in this sense, does not occur over time, the performance obligation is considered to be satisfied at a point in time 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 Performance obligations as it relates to licensing means that the control of the product transfers, either at a point in time or over time, depending on the nature of the license. The revenue standard identifies two types of licenses of IP: (i) a right to access IP; and (ii) 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 | Payment Terms The typical terms of subscription contracts range from 12 to 36 months, with auto-renew options extending the contract for an additional term. The Company invoices clients one month in advance for its services, in addition to any contractual data overages or for additional services. Equipment, software, and managed services are typically invoiced on net 30-day terms and are non-subscription based. |
Warranties | Warranties The Company offers guaranteed service levels and service guarantees on some of its contracts. These warranties are not sold separately and are accounted as “assurance warranties”. |
Significant Judgement | Significant Judgement In the instance where contracts have multiple performance obligations the Company uses judgment to establish a stand-alone price for each performance obligation. 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 is calculated to determine the aggregate price for the individual services. The proportion of each individual service to the aggregate price is determined. The ratio is 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 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 un-discounted future cash flows. |
Advertising Costs | Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred $ 165,403 263,485 581,423 669,278 |
Stock-Based Compensation | Stock-Based Compensation The Company 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 the 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. The Company’s calculation of estimated volatility is based on historical stock prices over a period equal to the expected life of the awards. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share Basic income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income 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 nine months ended September 30, 2023, and 2022: Schedule of earning per share basic and diluted For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net Income (Loss) Available to Common Shareholders $ 179,011 $ (245,619 ) $ 456,500 $ (1,228,708 ) Weighted average number of common shares - basic 6,847,264 6,822,127 6,834,811 6,759,247 Dilutive Securities Options 398,986 — 377,237 — Warrants — — — — Weighted average number of common shares - diluted 7,246,250 6,822,127 7,212,048 6,759,247 Earnings (Loss) per share, basic $ 0.03 $ (0.04 ) $ 0.06 $ (0.18 ) Earnings (Loss) per share, diluted $ 0.02 $ (0.04 ) $ 0.06 $ (0.18 ) The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income (loss) per share because their effect was anti-dilutive: Schedule of anti-dilutive income (loss) per share Three Months ended September 30, Nine Months ended September 30, 2023 2022 2023 2022 Options 210,211 290,330 231,960 290,330 Warrants 2,415,860 2,419,193 2,415,860 2,419,193 2,626,071 2,709,523 2,647,820 2,709,523 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of changes in equity investments | Schedule of changes in equity investments For the nine months ended September 30, 2023 Total As of January 1, 2023 $ 9,010,968 Purchase of equity investments 103,423 As of March 31, 2023 9,114,391 Purchase of equity investments 115,863 As of June 30, 2023 $ 9,230,254 Purchase of equity investments 1,301,667 As of September 30, 2023 $ 10,531,921 |
Schedule of revenue is disaggregated by major product | Schedule of revenue is disaggregated by major product United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,435,939 $ 53,550 $ 2,489,489 Equipment and Software 2,004,410 — 2,004,410 Managed Services 1,167,808 33,307 1,201,115 Nexxis VoIP Services 255,963 — 255,963 Other 35,648 — 35,648 Total Revenue $ 5,899,768 $ 86,857 $ 5,986,625 For the Three Months Ended September 30, 2022 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 2,120,592 $ 47,039 $ 2,167,631 Equipment and Software 1,021,451 — 1,021,451 Managed Services 966,346 33,307 999,653 Nexxis VoIP Services 203,191 — 203,191 Other 27,359 — 27,359 Total Revenue $ 4,338,939 $ 80,346 $ 4,419,285 For the Three Months Ended September 30, Timing of revenue recognition 2023 2022 Products transferred at a point in time $ 2,220,708 $ 1,112,748 Products and services transferred over time 3,765,917 3,306,537 Total Revenue $ 5,986,625 $ 4,419,285 For the Nine Months Ended September 30, 2023 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 6,801,094 $ 157,458 $ 6,958,552 Equipment and Software 7,076,116 — 7,076,116 Managed Services 3,787,722 103,341 3,891,063 Nexxis VoIP Services 728,447 — 728,447 Other 116,561 — 116,561 Total Revenue $ 18,509,940 $ 260,799 $ 18,770,739 For the Nine Months Ended September 30, 2022 United States International Total Infrastructure & Disaster Recovery/Cloud Service $ 5,964,383 $ 142,904 $ 6,107,287 Equipment and Software 7,309,400 — 7,309,400 Managed Services 3,709,657 99,921 3,809,578 Nexxis VoIP Services 587,051 — 587,051 Other 90,917 — 90,917 Total Revenue $ 17,661,408 $ 242,825 $ 17,904,233 For the Nine Months Ended September 30, Timing of revenue recognition 2023 2022 Products transferred at a point in time $ 8,204,003 $ 7,400,316 Products and services transferred over time 10,566,736 10,503,917 Total Revenue $ 18,770,739 $ 17,904,233 |
Schedule of earning per share basic and diluted | Schedule of earning per share basic and diluted For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net Income (Loss) Available to Common Shareholders $ 179,011 $ (245,619 ) $ 456,500 $ (1,228,708 ) Weighted average number of common shares - basic 6,847,264 6,822,127 6,834,811 6,759,247 Dilutive Securities Options 398,986 — 377,237 — Warrants — — — — Weighted average number of common shares - diluted 7,246,250 6,822,127 7,212,048 6,759,247 Earnings (Loss) per share, basic $ 0.03 $ (0.04 ) $ 0.06 $ (0.18 ) Earnings (Loss) per share, diluted $ 0.02 $ (0.04 ) $ 0.06 $ (0.18 ) |
Schedule of anti-dilutive income (loss) per share | Schedule of anti-dilutive income (loss) per share Three Months ended September 30, Nine Months ended September 30, 2023 2022 2023 2022 Options 210,211 290,330 231,960 290,330 Warrants 2,415,860 2,419,193 2,415,860 2,419,193 2,626,071 2,709,523 2,647,820 2,709,523 |
Prepaids and other current as_2
Prepaids and other current assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Prepaids And Other Current Assets | |
Schedule of Prepaids and other current assets | Schedule of Prepaids and other current assets September 30, December 31, 2023 2022 Prepaid Marketing & Promotion $ 70,691 $ 4,465 Prepaid Subscriptions and Licenses 650,191 439,088 Prepaid Maintenance 67,840 45,216 Prepaid Insurance 50,409 54,564 Other 32,903 41,333 Total prepaid and other current assets $ 872,034 $ 584,666 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Schedule of Property and Equipment September 30, December 31, 2023 2022 Storage Equipment $ 60,288 $ 60,288 Furniture and Fixtures 21,625 20,860 Leasehold Improvements 20,983 20,983 Computer Hardware and Software 113,427 93,062 Data Center Equipment 7,323,881 6,973,295 Gross Property and equipment 7,540,204 7,168,488 Less: Accumulated Depreciation (4,801,184 ) (4,956,698 ) Net Property and Equipment $ 2,739,020 $ 2,211,790 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and intangible assets | Schedule of goodwill and intangible assets Estimated life in years Gross amount December 31, 2022, Accumulated Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 4,238,671 $ — $ 4,238,671 Trademarks Indefinite 514,268 — 514,268 Total intangible assets not subject to amortization 4,752,939 — 4,752,939 Intangible assets subject to amortization Customer lists 7 2,614,099 1,167,075 1,447,024 ABC acquired contracts 5 310,000 310,000 — SIAS acquired contracts 5 660,000 660,000 — Non-compete agreements 4 272,147 272,147 — Website and Digital Assets 3 33,002 18,650 14,352 Total intangible assets subject to amortization 3,889,248 2,427,872 1,461,376 Total Goodwill and Intangible Assets $ 8,642,187 $ 2,427,872 $ 6,214,315 Estimated life in years Gross amount September 30, 2023, Accumulated Amortization Net Intangible assets not subject to amortization Goodwill Indefinite $ 4,238,671 $ — $ 4,238,671 Trademarks Indefinite 514,268 — 514,268 Total intangible assets not subject to amortization 4,752,939 — 4,752,939 Intangible assets subject to amortization Customer lists 7 2,614,099 1,367,432 1,246,667 ABC acquired contracts 5 310,000 310,000 — SIAS acquired contracts 5 660,000 660,000 — Non-compete agreements 4 272,147 272,147 — Website and digital assets 3 33,002 26,705 6,297 Total intangible assets subject to amortization 3,889,248 2,636,285 1,252,963 Total Goodwill and Intangible Assets $ 8,642,187 $ 2,636,285 $ 6,005,902 |
Schedule of amortization over the next two years | Schedule of amortization over the next two years Twelve months ending September 30, 2024 $ 273,439 2025 267,143 2026 267,143 2027 267,143 2028 133,571 Thereafter 44,524 Total $ 1,252,963 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of components of lease expense | Schedule of components of lease expense Three Months Ended Finance Leases: Amortization of assets, included in depreciation and amortization expense $ 91,250 Interest on lease liabilities, included in interest expense 7,409 Operating Lease: Amortization of assets, included in total operating expense 31,389 Interest on lease liabilities, included in total operating expense 2,573 Total net lease cost $ 132,621 Nine Months Ended September 30, 2023 Finance Leases: Amortization of assets, included in depreciation and amortization expense $ 527,958 Interest on lease liabilities, included in interest expense 48,471 Operating Lease: Amortization of assets, included in total operating expense 141,012 Interest on lease liabilities, included in total operating expense 5,279 Total net lease cost $ 722,720 Supplemental balance sheet information related to leases was as follows: Operating Leases: Operating lease right-of-use asset $ 89,547 Current operating lease liabilities $ 90,979 Noncurrent operating lease liabilities — Total operating lease liabilities $ 90,979 September 30, 2023 Finance Leases: Property and equipment, at cost $ 5,521,716 Accumulated amortization (4,050,770 ) Property and equipment, net $ 1,470,946 Current obligations of finance leases $ 590,745 Finance leases, net of current obligations 140,421 Total finance lease liabilities $ 731,166 |
Schedule of supplemental cash flow and other information related to leases | Schedule of supplemental cash flow and other information related to leases Nine Months Ended September 30, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 141,450 Financing cash flows related to finance leases $ 686,809 Weighted average remaining lease term (in years): Operating Leases 0.84 Finance Leases 2.80 Weighted average discount rate: Operating Leases 4 % Finance Leases 7 % |
Schedule of related party and non-related finance leases | Schedule of related party and non-related finance leases For the Twelve Months Ended September 30, Operating Leases Finance Leases 2023 $ 92,550 $ 601,930 2024 — 159,703 Total lease payments 92,550 761,633 Less: Amounts representing interest (1,571 ) (30,467 ) Total lease obligations 90,979 731,166 Less: long-term obligations — (140,421 ) Total current $ 90,979 $ 590,745 |
Stockholders_ (Deficit) (Tables
Stockholders’ (Deficit) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of option activity and related information | Schedule of option activity and related information Number of Weighted Weighted Shares Range of Average Average Under Option Price Exercise Contractual Options Per Share Price Life Options Outstanding at January 1, 2023 301,391 $ 15.76 1.48 $ 3.46 7.45 Options Granted 307,343 1.96 1.52 1.83 10.00 Exercised — — — — Expired/Cancelled (29,213 ) 5.80 2.16 3.76 — Options Outstanding at September 30, 2023 579,521 $ 14.00 1.48 $ 2.58 8.30 Options Exercisable at September 30, 2023 236,584 $ 14.00 1.48 $ 3.24 6.76 |
Schedule of weighted average fair value of options granted | Schedule of weighted average fair value of options granted 2023 2022 Weighted average fair value of options granted $ 1.77 $ 3.00 Risk-free interest rate 3.41 4.59 % 1.63 3.83 % Volatility 195 199 % 204 214 % Expected life (years) 10 10 Dividend yield $ — % $ — % |
Schedule of non-vested Restricted stock units | Schedule of non-vested Restricted stock units Total Grant Date Restricted Stock Units (RSUs) Shares Fair Value RSU’s non-vested at January 1, 2023 50,000 $ 1.48 3.23 RSU’s granted 205,972 $ 1.61 3.24 RSU’s vested (37,500 ) $ 2.04 3.23 RSU’s forfeited — $ — RSU’s non-vested September 30, 2023 218,472 $ 1.48 3.24 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment operating income or losses | Schedule of segment operating income or losses Operations of: Products and services provided: Nexxis Inc. NEXXIS is a single-source solution provider that delivers fully-managed cloud-based voice services, data transport, internet access, and SD-WAN solutions focused on business continuity for today’s modern business environment. Flagship Solutions, LLC Flagship Solutions Group (FSG) is a managed service provider. FSG invoices clients primarily for services that assist the clients’ technical teams. FSG has few technical assets and utilizes the assets or software of other cloud providers, whereby managing 3rd party infrastructure. FSG has maintains technical assets on one data center. FSG periodically sells equipment and software. CloudFirst Technologies Corporation CloudFirst, provides services from CloudFirst technological assets deployed in six Tier 3 data centers throughout the USA and Canada. This technology has been developed by CloudFirst. Clients are invoiced for cloud infrastructure and disaster recovery on the CloudFirst platform. Services provided to clients are provided on a subscription basis on long term contracts. |
Schedule of financial information related to reportable segments | Schedule of financial information related to reportable segments As of September 30, 2023 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Accounts receivable $ 1,032,309 $ 1,283,809 $ 28,225 $ — $ 2,344,343 Prepaid expenses and other current assets 616,149 149,239 19,089 87,556 872,033 Net Property and Equipment 2,710,730 22,334 3,118 2,838 2,739,020 Intangible assets, net 279,268 1,487,963 — — 1,767,231 Goodwill 3,015,700 1,222,971 — — 4,238,671 Operating lease right-of-use assets — 89,547 — — 89,547 All other assets — — — 11,573,746 11,573,746 Total Assets $ 7,654,156 $ 4,255,863 $ 50,432 $ 11,664,140 $ 23,624,591 Accounts payable and accrued expenses $ 1,031,518 $ 1,351,349 $ 127,002 $ 348,855 $ 2,858,724 Deferred revenue 106,370 153,172 — — 259,542 Total Finance leases payable 346,589 — — — 346,589 Total Finance leases payable related party 384,577 — — — 384,577 Total Operating lease liabilities — 90,979 — — 90,979 Total Liabilities $ 1,869,054 $ 1,595,500 $ 127,002 $ 348,855 $ 3,940,411 As of December 31, 2022 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Accounts receivable $ 1,543,749 $ 1,924,184 $ 34,903 $ — $ 3,502,836 Prepaid expenses and other current assets 285,306 213,826 16,799 68,735 584,666 Net Property and Equipment 2,192,085 19,705 — — 2,211,790 Intangible assets, net 279,268 1,696,376 — — 1,975,644 Goodwill 3,015,700 1,222,971 — — 4,238,671 Operating lease right-of-use assets 58,740 167,761 — — 226,501 All other assets — — — 11,346,127 11,346,127 Total Assets $ 7,374,848 $ 5,244,823 $ 51,702 $ 11,414,862 $ 24,086,235 Accounts payable and accrued expenses $ 1,069,278 $ 1,563,408 $ 40,091 $ 534,800 $ 3,207,577 Deferred revenue 115,335 165,725 — — 281,060 Total Finance leases payable 641,110 — — — 641,110 Total Finance leases payable related party 776,864 — — — 776,864 Total Operating lease liabilities 62,960 169,469 — — 232,429 Total Liabilities $ 2,665,547 $ 1,898,602 $ 40,091 $ 534,800 $ 5,139,040 For the three months ended September 30, 2023 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 3,741,717 $ 1,974,343 $ 270,565 $ — $ 5,986,625 Cost of Sales 1,990,420 1,501,830 164,021 — 3,656,271 Gross Profit 1,751,297 472,513 106,544 — 2,330,354 Selling, General and Administrative 651,896 544,686 174,527 606,584 1,977,693 Depreciation and Amortization 267,440 70,691 213 176 338,520 Total Operating Expenses 919,336 615,377 174,740 606,760 2,316,213 Income (Loss) from Operations 831,961 (142,864 ) (68,196 ) (606,760 ) 14,141 Interest Expense, net (13,069 ) — — 156,666 143,597 Other Expense — — — — — Total Other Income (Expense) (13,069 ) — — 156,666 143,597 Income (Loss) before provision for income taxes $ 818,892 $ (142,864 ) $ (68,196 ) $ (450,094 ) $ 157,738 For the three months ended September 30, 2022 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 2,976,461 $ 1,218,990 $ 223,834 $ — $ 4,419,285 Cost of Sales 1,525,175 910,852 130,957 — 2,566,984 Gross Profit 1,451,286 308,138 92,877 — 1,852,301 Selling, General and Administrative 556,060 691,863 92,837 443,026 1,783,786 Depreciation and Amortization 220,810 70,929 — — 291,739 Total Operating Expenses 776,870 762,792 92,837 443,026 2,075,525 Income (Loss) from Operations 674,416 (454,654 ) 40 (443,026 ) (223,224 ) Interest Expense, net (29,123 ) (137 ) — (479 ) (29,739 ) Loss on Disposal of Equipment — — — — — Gain on Forgiveness of Debt — — — — — All Other Expenses — — — — — Total Other Income (Expense) (29,123 ) (137 ) — (479 ) (29,739 ) Income (Loss) before Provision for Income Taxes $ 645,293 $ (454,791 ) $ 40 $ (443,505 ) $ (252,963 ) For the nine months ended September 30, 2023 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 10,052,281 $ 7,918,016 $ 800,442 $ — $ 18,770,739 Cost of Sales 5,323,346 5,949,745 498,795 — 11,771,886 Gross Profit 4,728,935 1,968,271 301,647 — 6,998,853 Selling, General and Administrative 2,002,882 1,729,191 468,605 1,790,124 5,990,802 Depreciation and Amortization 714,585 212,646 492 457 928,180 Total Operating Expenses 2,717,467 1,941,837 469,097 1,790,581 6,918,982 Income (Loss) from Operations 2,011,468 26,434 (167,450 ) (1,790,581 ) 79,871 Interest Expense, net (56,985 ) — — 375,953 318,968 Total Other Income (Expense) (56,985 ) — — 375,953 318,968 Income (Loss) before Provision for Income Taxes $ 1,954,483 $ 26,434 $ (167,450 ) $ (1,414,628 ) $ 398,839 For the nine months ended September 30, 2022 CloudFirst Technologies Flagship Solutions LLC Nexxis Inc. Corporate Total Sales $ 8,200,881 $ 9,045,733 $ 657,619 $ — $ 17,904,233 Cost of Sales 4,289,894 7,146,441 411,125 — 11,847,460 Gross Profit 3,910,987 1,899,292 246,494 — 6,056,773 Selling, General and Administrative 1,712,409 2,807,096 278,785 1,398,977 6,197,267 Depreciation and Amortization 720,573 211,755 — — 932,328 Total Operating expenses 2,432,982 3,018,851 278,785 1,398,977 7,129,595 Income (Loss) from Operations 1,478,005 (1,119,559 ) (32,291 ) (1,398,977 ) (1,072,822 ) Interest Expense, net (108,052 ) (75,695 ) — (2,316 ) (186,063 ) Loss on Disposal of Equipment — — — — — Gain on Forgiveness of Debt — — — — — All Other Expenses — — — — — Total Other Income (Expense) (108,052 ) (75,695 ) — (2,316 ) (186,063 ) Income (Loss) before Provision for Income Taxes $ 1,369,953 $ (1,195,254 ) $ (32,291 ) $ (1,401,293 ) $ (1,258,885 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |
Accounting Policies [Abstract] | |||
Fair value of investments, beginning balance | $ 9,230,254 | $ 9,114,391 | $ 9,010,968 |
Purchase of equity investments | 1,301,667 | 115,863 | 103,423 |
Fair value of investments, ending balance | $ 10,531,921 | $ 9,230,254 | $ 9,114,391 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Product Information [Line Items] | ||||
Revenues | $ 5,986,625 | $ 4,419,285 | $ 18,770,739 | $ 17,904,233 |
Transferred at Point in Time [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 2,220,708 | 1,112,748 | 8,204,003 | 7,400,316 |
Transferred over Time [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 3,765,917 | 3,306,537 | 10,566,736 | 10,503,917 |
UNITED STATES | ||||
Product Information [Line Items] | ||||
Revenues | 5,899,768 | 4,338,939 | 18,509,940 | 17,661,408 |
International [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 86,857 | 80,346 | 260,799 | 242,825 |
Service [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 2,489,489 | 2,167,631 | 6,958,552 | 6,107,287 |
Service [Member] | UNITED STATES | ||||
Product Information [Line Items] | ||||
Revenues | 2,435,939 | 2,120,592 | 6,801,094 | 5,964,383 |
Service [Member] | International [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 53,550 | 47,039 | 157,458 | 142,904 |
Equipment And Software [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 2,004,410 | 1,021,451 | 7,076,116 | 7,309,400 |
Equipment And Software [Member] | UNITED STATES | ||||
Product Information [Line Items] | ||||
Revenues | 2,004,410 | 1,021,451 | 7,076,116 | 7,309,400 |
Equipment And Software [Member] | International [Member] | ||||
Product Information [Line Items] | ||||
Revenues | ||||
Managed Services [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 1,201,115 | 999,653 | 3,891,063 | 3,809,578 |
Managed Services [Member] | UNITED STATES | ||||
Product Information [Line Items] | ||||
Revenues | 1,167,808 | 966,346 | 3,787,722 | 3,709,657 |
Managed Services [Member] | International [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 33,307 | 33,307 | 103,341 | 99,921 |
Nexxis Voip Services [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 255,963 | 203,191 | 728,447 | 587,051 |
Nexxis Voip Services [Member] | UNITED STATES | ||||
Product Information [Line Items] | ||||
Revenues | 255,963 | 203,191 | 728,447 | 587,051 |
Nexxis Voip Services [Member] | International [Member] | ||||
Product Information [Line Items] | ||||
Revenues | ||||
Other [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 35,648 | 27,359 | 116,561 | 90,917 |
Other [Member] | UNITED STATES | ||||
Product Information [Line Items] | ||||
Revenues | 35,648 | 27,359 | 116,561 | 90,917 |
Other [Member] | International [Member] | ||||
Product Information [Line Items] | ||||
Revenues |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Net Income (Loss) Available to Common Shareholders | $ 179,011 | $ (245,619) | $ 456,500 | $ (1,228,708) |
Weighted average number of common shares - basic | 6,847,264 | 6,822,127 | 6,834,811 | 6,759,247 |
Dilutive Securities | ||||
Options | 398,986 | 377,237 | ||
Warrants | ||||
Weighted average number of common shares - diluted | 7,246,250 | 6,822,127 | 7,212,048 | 6,759,247 |
Earnings (Loss) per share, basic | $ 0.03 | $ (0.04) | $ 0.06 | $ (0.18) |
Earnings (Loss) per share, diluted | $ 0.02 | $ (0.04) | $ 0.06 | $ (0.18) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents | 2,626,071 | 2,709,523 | 2,647,820 | 2,709,523 |
Options Held [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents | 210,211 | 290,330 | 231,960 | 290,330 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents | 2,415,860 | 2,419,193 | 2,415,860 | 2,419,193 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||||
Marketable equity securities | $ 10,531,921 | $ 10,531,921 | $ 9,010,968 | ||
Accounts receivables due | 30 days | ||||
Advertising expense | $ 165,403 | $ 263,485 | $ 581,423 | $ 669,278 | |
One Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Product Information [Line Items] | |||||
Customer sales revenue | 16% | 23% | |||
One Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||||
Product Information [Line Items] | |||||
Customer sales revenue | 13% | 14% | 15% | 20% | |
Two Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Product Information [Line Items] | |||||
Customer sales revenue | 14% | 14% | |||
Two Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||||
Product Information [Line Items] | |||||
Customer sales revenue | 11% | 14% | |||
Three Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Product Information [Line Items] | |||||
Customer sales revenue | 10% |
Prepaids and other current as_3
Prepaids and other current assets (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaids And Other Current Assets | ||
Prepaid Marketing & Promotion | $ 70,691 | $ 4,465 |
Prepaid Subscriptions and Licenses | 650,191 | 439,088 |
Prepaid Maintenance | 67,840 | 45,216 |
Prepaid Insurance | 50,409 | 54,564 |
Other | 32,903 | 41,333 |
Total prepaid and other current assets | $ 872,034 | $ 584,666 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 7,540,204 | $ 7,168,488 |
Less: Accumulated depreciation | (4,801,184) | (4,956,698) |
Net property and equipment | 2,739,020 | 2,211,790 |
Technology Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | 60,288 | 60,288 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | 21,625 | 20,860 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | 20,983 | 20,983 |
Computer Hardware and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | 113,427 | 93,062 |
Data Center Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 7,323,881 | $ 6,973,295 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 269,372 | $ 222,009 | $ 719,766 | $ 724,315 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets not subject to amortization, Gross amount | $ 4,752,939 | $ 4,752,939 |
Total intangible assets not subject to amortization, Accumulated Amortization | ||
Total intangible assets not subject to amortization, Net amount | 4,752,939 | 4,752,939 |
Total Intangible Assets, Gross amount | 3,889,248 | 3,889,248 |
Total Intangible Assets, Accumulated Amortization | 2,636,285 | 2,427,872 |
Total Intangible Assets, Net amount | 1,252,963 | 1,461,376 |
Total Goodwill and Intangible Assets, Gross amount | 8,642,187 | 8,642,187 |
Total Goodwill and Intangible Assets, Accumulated Amortization | 2,636,285 | 2,427,872 |
Total Goodwill and Intangible Assets, Net | $ 6,005,902 | $ 6,214,315 |
Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | Indefinite | Indefinite |
Total intangible assets not subject to amortization, Gross amount | $ 4,238,671 | $ 4,238,671 |
Total intangible assets not subject to amortization, Accumulated Amortization | ||
Total intangible assets not subject to amortization, Net amount | $ 4,238,671 | $ 4,238,671 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | Indefinite | Indefinite |
Total intangible assets not subject to amortization, Gross amount | $ 514,268 | $ 514,268 |
Total intangible assets not subject to amortization, Accumulated Amortization | ||
Total intangible assets not subject to amortization, Net amount | $ 514,268 | $ 514,268 |
Customer Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | 7 years | 7 years |
Total Intangible Assets, Gross amount | $ 2,614,099 | $ 2,614,099 |
Total Intangible Assets, Accumulated Amortization | 1,367,432 | 1,167,075 |
Total Intangible Assets, Net amount | $ 1,246,667 | $ 1,447,024 |
ABC Acquired Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | 5 years | 5 years |
Total Intangible Assets, Gross amount | $ 310,000 | $ 310,000 |
Total Intangible Assets, Accumulated Amortization | 310,000 | 310,000 |
Total Intangible Assets, Net amount | ||
SIAS Acquired Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | 5 years | 5 years |
Total Intangible Assets, Gross amount | $ 660,000 | $ 660,000 |
Total Intangible Assets, Accumulated Amortization | 660,000 | 660,000 |
Total Intangible Assets, Net amount | ||
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
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 | ||
Website And Digital Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life in years | 3 years | 3 years |
Total Intangible Assets, Gross amount | $ 33,002 | $ 33,002 |
Total Intangible Assets, Accumulated Amortization | 26,705 | 18,650 |
Total Intangible Assets, Net amount | $ 6,297 | $ 14,352 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 273,439 |
2025 | 267,143 |
2026 | 267,143 |
2027 | 267,143 |
2028 | 133,571 |
Thereafter | 44,524 |
Total | $ 1,252,963 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 69,147 | $ 69,730 | $ 208,143 | $ 209,191 |
Lease (Details)
Lease (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Leases | |||
Amortization of assets, included in depreciation and amortization expense | $ 91,250 | $ 527,958 | |
Interest on lease liabilities, included in interest expense | 7,409 | 48,471 | |
Amortization of assets, included in total operating expense | 31,389 | 141,012 | |
Interest on lease liabilities, included in total operating expense | 2,573 | 5,279 | |
Total net lease cost | $ 132,621 | 722,720 | |
Operating lease right-of-use asset | 89,547 | $ 226,501 | |
Current operating lease liabilities | 90,979 | 160,657 | |
Noncurrent operating lease liabilities | 71,772 | ||
Total operating lease liabilities | 90,979 | $ 232,429 | |
Property and equipment, at cost | 5,521,716 | ||
Accumulated amortization | (4,050,770) | ||
Property and equipment, net | 1,470,946 | ||
Current obligations of finance leases | 590,745 | ||
Finance leases, net of current obligations | 140,421 | ||
Total finance lease liabilities | $ 731,166 |
Lease (Details 1)
Lease (Details 1) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Leases | |
Operating cash flows related to operating leases | $ 141,450 |
Financing cash flows related to finance leases | $ 686,809 |
Operating lease, weighted average remaining lease term | 10 months 2 days |
Finance lease, weighted average remaining lease term | 2 years 9 months 18 days |
Operating lease, weighted average discount rate, percent | 4% |
Finance lease, weighted average discount rate, percent | 7% |
Lease (Details 2)
Lease (Details 2) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Operating Leases 2023 | $ 92,550 | |
Finance Leases 2023 | 601,930 | |
Operating Leases 2024 | ||
Finance Leases 2024 | 159,703 | |
Operating Leases Total lease payments | 92,550 | |
Finance Leases Total lease payments | 761,633 | |
Operating Leases Less: Amounts representing interest | (1,571) | |
Finance Leases Less: Amounts representing interest | (30,467) | |
Total operating lease liabilities | 90,979 | $ 232,429 |
Total finance lease liabilities | 731,166 | |
Operating Leases Less: long-term obligations | ||
Finance Leases Less: long-term obligations | (140,421) | |
Operating Leases Total current | 90,979 | |
Finance Leases Total current | $ 590,745 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
Apr. 02, 2022 | Jan. 02, 2022 | Nov. 01, 2021 | Mar. 04, 2021 | Jul. 31, 2020 | Jun. 29, 2020 | Jun. 01, 2020 | Jan. 02, 2020 | Jan. 02, 2019 | Jul. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||||||||||||
Annual rent | $ 11,856 | |||||||||||||
Fiance leases contingent monthly rental payments | 988 | |||||||||||||
Lease expiration date | Jun. 30, 2022 | Aug. 02, 2021 | ||||||||||||
Debt instrument, periodic payment | $ 4,965 | |||||||||||||
Annual base rent | $ 1,470 | 1,403 | ||||||||||||
Month to month lease payment | $ 3,073 | $ 3,073 | ||||||||||||
Discount rate | 5% | 5% | ||||||||||||
Operating leases rent expenses net | $ 69,974 | $ 53,991 | $ 205,241 | $ 159,236 | ||||||||||
Systems Trading [Member] | ||||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||||
Lease expiration date | Apr. 01, 2025 | Feb. 01, 2025 | Mar. 16, 2024 | Dec. 31, 2022 | Mar. 01, 2024 | |||||||||
Finace leases contingent monthly rental payments | $ 6,667 | $ 7,145 | $ 1,567 | $ 10,534 | $ 29,592 | |||||||||
Interest rate | 8% | 8% | 8% | 6% | 6.75% | |||||||||
Melville [Member] | ||||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||||
Rent expenses | $ 86,268 | |||||||||||||
Lease expiration date | Jul. 31, 2023 | |||||||||||||
Massachusetts and North Carolina Florida and Texas [Member] | ||||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||||
Rent expenses | $ 39,000 | |||||||||||||
Arrow Capital Solutions [Member] | ||||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||||
Lease expiration date | Jan. 01, 2025 | Nov. 01, 2024 | Jul. 31, 2023 | Jun. 29, 2023 | Jun. 01, 2023 | |||||||||
Finace leases contingent monthly rental payments | $ 17,718 | $ 3,152 | $ 4,524 | $ 5,050 | $ 5,008 | |||||||||
Interest rate | 5% | 6% | 7% | 7% | 7% | |||||||||
Arrow Capital Solutions 1 [Member] | ||||||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||||||
Lease expiration date | Jan. 01, 2025 | |||||||||||||
Finace leases contingent monthly rental payments | $ 2,037 | |||||||||||||
Interest rate | 6% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - Flagship Acquisition [Member] $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Business acquisition payments | $ 1.3 |
Business acquisition period | 5 years |
Stockholders' (Deficit) (Detail
Stockholders' (Deficit) (Details) - Share-Based Payment Arrangement, Option [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of shares outstanding, beginning | 301,391 | |
Weighted Average Exercise Price Outstanding beginning | $ 3.46 | |
Weighted Average Contractual Life, Outstanding | 8 years 3 months 18 days | 7 years 5 months 12 days |
Number of shares granted | 307,343 | |
Weighted Average Exercise Price, Granted | $ 1.83 | |
Weighted Average Contractual Life, granted | 10 years | |
Number of shares exercised | 0 | |
Range of option price per share, Exercised | $ 0 | |
Weighted Average Exercise Price, Exercised | $ 0 | |
Number of shares expired/cancelled | (29,213) | |
Weighted Average Exercise Price, Expired/Cancelled | $ 3.76 | |
Number of shares outstanding, ending | 579,521 | 301,391 |
Weighted Average Exercise Price Outstanding ending | $ 2.58 | $ 3.46 |
Number of shares exercisable, ending | 236,584 | |
Weighted Average Exercise Price, Exercisable ending | $ 3.24 | |
Weighted Average Contractual Life, exercisable | 6 years 9 months 3 days | |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Range of option price per share outstanding, beginning | $ 15.76 | |
Range of option price per share, Granted | 1.96 | |
Range of option price per share, Expired/Cancelled | 5.80 | |
Range of option price per share outstanding, ending | 14 | 15.76 |
Range of option price per share, Exercisable | 14 | |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Range of option price per share outstanding, beginning | 1.48 | |
Range of option price per share, Granted | 1.52 | |
Range of option price per share, Expired/Cancelled | 2.16 | |
Range of option price per share outstanding, ending | 1.48 | $ 1.48 |
Range of option price per share, Exercisable | $ 1.48 |
Stockholders' (Deficit) (Deta_2
Stockholders' (Deficit) (Details 1) - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Weighted average fair value of options granted | $ 1.77 | $ 3 |
Expected life (years) | 10 years | 10 years |
Dividend yield | ||
Minimum [Member] | ||
Risk-free interest rate | 3.41% | 1.63% |
Volatility | 195% | 204% |
Maximum [Member] | ||
Risk-free interest rate | 4.59% | 3.83% |
Volatility | 199% | 214% |
Stockholders' (Deficit) (Deta_3
Stockholders' (Deficit) (Details 2) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
RSUs non-vested Shares, beginning | shares | 50,000 |
RSUs granted Shares | shares | 205,972 |
RSUs vested Shares | shares | (37,500) |
RSUs forfeited Shares | shares | |
Grant date fair value, forfeited | |
RSUs non-vested Shares, ending | shares | 218,472 |
Minimum [Member] | |
Grant Date Fair Value, beginning | $ 1.48 |
Grant date fair value, granted | 1.61 |
Grant date fair value, vested | 2.04 |
Grant date fair value, ending | 1.48 |
Maximum [Member] | |
Grant Date Fair Value, beginning | 3.23 |
Grant date fair value, granted | 3.24 |
Grant date fair value, vested | 3.23 |
Grant date fair value, ending | $ 3.24 |
Stockholders_ (Deficit) (Detail
Stockholders’ (Deficit) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Jun. 02, 2023 | Apr. 10, 2023 | Mar. 31, 2023 | Mar. 28, 2023 | Mar. 02, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
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 value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Share-based compensation expense for options | $ 81,520 | $ 74,143 | $ 211,223 | $ 215,968 | ||||||
Total unrecognized compensation expense | 676,513 | $ 676,513 | ||||||||
Weighted average period expected to recognized compensation expense (in years) | 2 years 8 months 12 days | |||||||||
Unrecognized compensation expense | 320,344 | $ 320,344 | ||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share-based compensation expense for options | $ 48,507 | $ 17,896 | 127,986 | $ 27,962 | ||||||
Shares granted | 50,000 | 12,500 | 44,942 | 73,530 | ||||||
Restricted stock expense | $ 90,000 | $ 22,750 | $ 72,357 | $ 130,883 | $ 38,875 | |||||
Number of shares issued | 12,500 | |||||||||
Stock Incentive Plan 2021 [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Additional shares | 700,000 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transactions [Abstract] | ||||
Proceeds from related party debt | $ 14,267 | $ 19,494 | $ 30,048 | $ 33,530 |
Segment Information (Details)
Segment Information (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Nexxis Inc [Member] | |
Revenue from External Customer [Line Items] | |
Products and services provided | NEXXIS is a single-source solution provider that delivers fully-managed cloud-based voice services, data transport, internet access, and SD-WAN solutions focused on business continuity for today’s modern business environment. |
Flagship Solutions L L C [Member] | |
Revenue from External Customer [Line Items] | |
Products and services provided | Flagship Solutions Group (FSG) is a managed service provider. FSG invoices clients primarily for services that assist the clients’ technical teams. FSG has few technical assets and utilizes the assets or software of other cloud providers, whereby managing 3rd party infrastructure. FSG has maintains technical assets on one data center. FSG periodically sells equipment and software. |
Cloud First Technologies Corporation [Member] | |
Revenue from External Customer [Line Items] | |
Products and services provided | CloudFirst, provides services from CloudFirst technological assets deployed in six Tier 3 data centers throughout the USA and Canada. This technology has been developed by CloudFirst. Clients are invoiced for cloud infrastructure and disaster recovery on the CloudFirst platform. Services provided to clients are provided on a subscription basis on long term contracts. |
Segment Information (Details 1)
Segment Information (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Accounts receivable | $ 2,344,343 | $ 2,344,343 | $ 3,502,836 | ||
Prepaid expenses and other current assets | 872,033 | 872,033 | 584,666 | ||
Net Property and Equipment | 2,739,020 | 2,739,020 | 2,211,790 | ||
Intangible assets, net | 1,767,231 | 1,767,231 | 1,975,644 | ||
Goodwill | 4,238,671 | 4,238,671 | 4,238,671 | ||
Operating lease right-of-use assets | 89,547 | 89,547 | 226,501 | ||
All other assets | 11,573,746 | 11,573,746 | 11,346,127 | ||
Total Assets | 23,624,591 | 23,624,591 | 24,086,235 | ||
Accounts payable and accrued expenses | 2,858,724 | 2,858,724 | 3,207,577 | ||
Deferred revenue | 259,542 | 259,542 | 281,060 | ||
Total Finance leases payable | 346,589 | 346,589 | 641,110 | ||
Total Finance leases payable related party | 384,577 | 384,577 | 776,864 | ||
Total Operating lease liabilities | 90,979 | 90,979 | 232,429 | ||
Total Liabilities | 3,940,411 | 3,940,411 | 5,139,040 | ||
Sales | 5,986,625 | $ 4,419,285 | 18,770,739 | $ 17,904,233 | |
Cost of Sales | 3,656,271 | 2,566,984 | 11,771,886 | 11,847,460 | |
Gross Profit | 2,330,354 | 1,852,301 | 6,998,853 | 6,056,773 | |
Selling, General and Administrative | 1,977,693 | 1,783,786 | 5,990,802 | 6,197,267 | |
Depreciation and Amortization | 338,520 | 291,739 | 928,180 | 932,328 | |
Total Operating expenses | 2,316,213 | 2,075,525 | 6,918,982 | 7,129,595 | |
Income (Loss) from Operations | 14,141 | (223,224) | 79,871 | (1,072,822) | |
Interest Expense, net | 143,597 | (29,739) | 318,968 | (186,063) | |
Loss on Disposal of Equipment | |||||
Gain on Forgiveness of Debt | |||||
All Other Expenses | |||||
Other Expense | |||||
Total Other Income (Expense) | 143,597 | (29,739) | 318,968 | (186,063) | |
Income (Loss) before Provision for Income Taxes | 157,738 | (252,963) | 398,839 | (1,258,885) | |
Cloud First Technologies [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Accounts receivable | 1,032,309 | 1,032,309 | 1,543,749 | ||
Prepaid expenses and other current assets | 616,149 | 616,149 | 285,306 | ||
Net Property and Equipment | 2,710,730 | 2,710,730 | 2,192,085 | ||
Intangible assets, net | 279,268 | 279,268 | 279,268 | ||
Goodwill | 3,015,700 | 3,015,700 | 3,015,700 | ||
Operating lease right-of-use assets | 58,740 | ||||
All other assets | |||||
Total Assets | 7,654,156 | 7,654,156 | 7,374,848 | ||
Accounts payable and accrued expenses | 1,031,518 | 1,031,518 | 1,069,278 | ||
Deferred revenue | 106,370 | 106,370 | 115,335 | ||
Total Finance leases payable | 346,589 | 346,589 | 641,110 | ||
Total Finance leases payable related party | 384,577 | 384,577 | 776,864 | ||
Total Operating lease liabilities | 62,960 | ||||
Total Liabilities | 1,869,054 | 1,869,054 | 2,665,547 | ||
Sales | 3,741,717 | 2,976,461 | 10,052,281 | 8,200,881 | |
Cost of Sales | 1,990,420 | 1,525,175 | 5,323,346 | 4,289,894 | |
Gross Profit | 1,751,297 | 1,451,286 | 4,728,935 | 3,910,987 | |
Selling, General and Administrative | 651,896 | 556,060 | 2,002,882 | 1,712,409 | |
Depreciation and Amortization | 267,440 | 220,810 | 714,585 | 720,573 | |
Total Operating expenses | 919,336 | 776,870 | 2,717,467 | 2,432,982 | |
Income (Loss) from Operations | 831,961 | 674,416 | 2,011,468 | 1,478,005 | |
Interest Expense, net | (13,069) | (29,123) | (56,985) | (108,052) | |
Loss on Disposal of Equipment | |||||
Gain on Forgiveness of Debt | |||||
All Other Expenses | |||||
Other Expense | |||||
Total Other Income (Expense) | (13,069) | (29,123) | (56,985) | (108,052) | |
Income (Loss) before Provision for Income Taxes | 818,892 | 645,293 | 1,954,483 | 1,369,953 | |
Flagship Solutions L L C [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Accounts receivable | 1,283,809 | 1,283,809 | 1,924,184 | ||
Prepaid expenses and other current assets | 149,239 | 149,239 | 213,826 | ||
Net Property and Equipment | 22,334 | 22,334 | 19,705 | ||
Intangible assets, net | 1,487,963 | 1,487,963 | 1,696,376 | ||
Goodwill | 1,222,971 | 1,222,971 | 1,222,971 | ||
Operating lease right-of-use assets | 89,547 | 89,547 | 167,761 | ||
All other assets | |||||
Total Assets | 4,255,863 | 4,255,863 | 5,244,823 | ||
Accounts payable and accrued expenses | 1,351,349 | 1,351,349 | 1,563,408 | ||
Deferred revenue | 153,172 | 153,172 | 165,725 | ||
Total Finance leases payable | |||||
Total Finance leases payable related party | |||||
Total Operating lease liabilities | 90,979 | 90,979 | 169,469 | ||
Total Liabilities | 1,595,500 | 1,595,500 | 1,898,602 | ||
Sales | 1,974,343 | 1,218,990 | 7,918,016 | 9,045,733 | |
Cost of Sales | 1,501,830 | 910,852 | 5,949,745 | 7,146,441 | |
Gross Profit | 472,513 | 308,138 | 1,968,271 | 1,899,292 | |
Selling, General and Administrative | 544,686 | 691,863 | 1,729,191 | 2,807,096 | |
Depreciation and Amortization | 70,691 | 70,929 | 212,646 | 211,755 | |
Total Operating expenses | 615,377 | 762,792 | 1,941,837 | 3,018,851 | |
Income (Loss) from Operations | (142,864) | (454,654) | 26,434 | (1,119,559) | |
Interest Expense, net | (137) | (75,695) | |||
Loss on Disposal of Equipment | |||||
Gain on Forgiveness of Debt | |||||
All Other Expenses | |||||
Other Expense | |||||
Total Other Income (Expense) | (137) | (75,695) | |||
Income (Loss) before Provision for Income Taxes | (142,864) | (454,791) | 26,434 | (1,195,254) | |
Nexxis Inc [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Accounts receivable | 28,225 | 28,225 | 34,903 | ||
Prepaid expenses and other current assets | 19,089 | 19,089 | 16,799 | ||
Net Property and Equipment | 3,118 | 3,118 | |||
Intangible assets, net | |||||
Goodwill | |||||
Operating lease right-of-use assets | |||||
All other assets | |||||
Total Assets | 50,432 | 50,432 | 51,702 | ||
Accounts payable and accrued expenses | 127,002 | 127,002 | 40,091 | ||
Deferred revenue | |||||
Total Finance leases payable | |||||
Total Finance leases payable related party | |||||
Total Operating lease liabilities | |||||
Total Liabilities | 127,002 | 127,002 | 40,091 | ||
Sales | 270,565 | 223,834 | 800,442 | 657,619 | |
Cost of Sales | 164,021 | 130,957 | 498,795 | 411,125 | |
Gross Profit | 106,544 | 92,877 | 301,647 | 246,494 | |
Selling, General and Administrative | 174,527 | 92,837 | 468,605 | 278,785 | |
Depreciation and Amortization | 213 | 492 | |||
Total Operating expenses | 174,740 | 92,837 | 469,097 | 278,785 | |
Income (Loss) from Operations | (68,196) | 40 | (167,450) | (32,291) | |
Interest Expense, net | |||||
Loss on Disposal of Equipment | |||||
Gain on Forgiveness of Debt | |||||
All Other Expenses | |||||
Other Expense | |||||
Total Other Income (Expense) | |||||
Income (Loss) before Provision for Income Taxes | (68,196) | 40 | (167,450) | (32,291) | |
Corporate Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Accounts receivable | |||||
Prepaid expenses and other current assets | 87,556 | 87,556 | 68,735 | ||
Net Property and Equipment | 2,838 | 2,838 | |||
Intangible assets, net | |||||
Goodwill | |||||
Operating lease right-of-use assets | |||||
All other assets | 11,573,746 | 11,573,746 | 11,346,127 | ||
Total Assets | 11,664,140 | 11,664,140 | 11,414,862 | ||
Accounts payable and accrued expenses | 348,855 | 348,855 | 534,800 | ||
Deferred revenue | |||||
Total Finance leases payable | |||||
Total Finance leases payable related party | |||||
Total Operating lease liabilities | |||||
Total Liabilities | 348,855 | 348,855 | $ 534,800 | ||
Sales | |||||
Cost of Sales | |||||
Gross Profit | |||||
Selling, General and Administrative | 606,584 | 443,026 | 1,790,124 | 1,398,977 | |
Depreciation and Amortization | 176 | 457 | |||
Total Operating expenses | 606,760 | 443,026 | 1,790,581 | 1,398,977 | |
Income (Loss) from Operations | (606,760) | (443,026) | (1,790,581) | (1,398,977) | |
Interest Expense, net | 156,666 | (479) | 375,953 | (2,316) | |
Loss on Disposal of Equipment | |||||
Gain on Forgiveness of Debt | |||||
All Other Expenses | |||||
Other Expense | |||||
Total Other Income (Expense) | 156,666 | (479) | 375,953 | (2,316) | |
Income (Loss) before Provision for Income Taxes | $ (450,094) | $ (443,505) | $ (1,414,628) | $ (1,401,293) |