Data Storage Corporation Reports 14% Increase in Revenue for the Third Quarter of 2022
15 November 2022 - 11:00PM
Data Storage Corporation (Nasdaq: DTST) (“DSC” and the “Company”),
a provider of diverse business continuity solutions for
disaster-recovery, cloud infrastructure, cyber-security, and IT
services, today provided a business update and reported financial
results for the third quarter ended September 30, 2022.
Chuck Piluso, CEO of Data Storage Corporation,
commented, “We continue to witness strong year-over-year sales
growth, as evidenced by our revenue of $4.4 million for the third
quarter of 2022, representing an increase of 14%. Notably, our
revenue for the nine-month period increased 80% to $17.9 million
when compared to the same period in 2021. Our decades of experience
providing an array of multi-cloud information technology solutions,
properly allocated investments, and highly skilled employees have
been the foundation to our success and has allowed us to establish
a leadership position as more and more companies migrate their IBM
Power infrastructure and disaster recovery to the cloud. We are
actively penetrating billion-dollar markets, while executing on our
strategy of securing high-margin, recurring, subscription-based
cloud and managed services contracts. While we achieved positive
adjusted EBITDA for the quarter, we are undertaking activities that
we anticipate will further improve our margins and profitability,
as well as accelerate our growth, including realigning management
and streamlining operations. Overall, we have maintained a solid
balance sheet with over $11 million of cash and cash equivalents
providing us sufficient runway to execute on our growth strategy
and further penetrate these large markets.”
Conference Call
The Company plans to host a conference call at
10:00 am ET today, November 15th, 2022, to discuss the Company's
financial results for the third quarter ended September 30, 2022,
as well as corporate progress and other developments.
The conference call will be available via
telephone by dialing toll-free 888-506-0062 for U.S. callers or for
international callers +1 973-528-0011 and entering access code:
538563. A webcast of the call may be accessed
at https://www.webcaster4.com/Webcast/Page/2763/47023, or on
the Company’s News & Events section of the
website, https://www.dtst.com/news-events/ir-calendar.
A webcast replay of the call will be available
on the Company’s website (www.DTST.com) through November 15th,
2023. A telephone replay of the call will be available
approximately one hour following the call, through November 29th,
2022, and can be accessed by dialing 877-481-4010 for U.S. callers
or +1 919-882-2331 for international callers and entering
conference ID: 47023.
About Data Storage CorporationThe Company
provides a broad range of premium business continuity solutions
from six data centers in the USA and Canada. The Company serves its
clients with cloud infrastructure, disaster recovery, cyber
security, telecommunications, and IT services. Clients look to Data
Storage Corporation to ensure disaster recovery, business
continuity, enhance cyber security, and meet increasing industry,
state, and federal regulations. The Company markets to businesses,
government, education, and the healthcare industry.
For more information, please visit http://www.DTST.com/.
Twitter: @DataStorageCorp
Safe Harbor ProvisionThis press release
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended, that
are intended to be covered by the safe harbor created thereby.
Forward-looking statements are subject to risks and uncertainties
that could cause actual results, performance or achievements to
differ materially from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Statements preceded by, followed by or that otherwise
include the words “believes,” “expects,” “anticipates,” “intends,”
“projects,” “estimates,” “plans” and similar expressions or future
or conditional verbs such as “will,” “should,” “would,” “may” and
“could” are generally forward-looking in nature and not historical
facts, although not all forward-looking statements include the
foregoing. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can
provide no assurance that such expectations will prove to have been
correct. These risks should not be construed as exhaustive and
should be read together with the other cautionary statements
included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2021, subsequent Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K filed with the Securities and
Exchange Commission. Any forward-looking statement speaks only as
of the date on which it was initially made. Except as required by
law, the Company assumes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, changed circumstances or otherwise.
Contact:Crescendo Communications,
LLC212-671-1020DTST@crescendo-ir.comSOURCE: Data
Storage Corporation
[Tables follow]
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,281,703 |
|
|
$ |
12,135,803 |
|
Accounts receivable (less allowance for credit losses of $12,476
and $30,000 in 2022 and 2021, respectively) |
|
|
2,011,166 |
|
|
|
2,384,367 |
|
Prepaid expenses and other current assets |
|
|
868,019 |
|
|
|
536,401 |
|
Total Current Assets |
|
|
14,160,888 |
|
|
|
15,056,571 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
7,103,795 |
|
|
|
6,595,236 |
|
Less—Accumulated depreciation |
|
|
(4,732,846 |
) |
|
|
(4,657,765 |
) |
Net Property and Equipment |
|
|
2,370,949 |
|
|
|
1,937,471 |
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
6,560,671 |
|
|
|
6,560,671 |
|
Operating lease right-of-use assets |
|
|
276,465 |
|
|
|
422,318 |
|
Other assets |
|
|
166,248 |
|
|
|
103,226 |
|
Intangible assets, net |
|
|
2,045,375 |
|
|
|
2,254,566 |
|
Total Other Assets |
|
|
9,048,759 |
|
|
|
9,340,781 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
25,580,596 |
|
|
$ |
26,334,823 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
1,490,877 |
|
|
$ |
1,343,391 |
|
Deferred revenue |
|
|
71,037 |
|
|
|
366,859 |
|
Finance leases payable |
|
|
381,043 |
|
|
|
216,299 |
|
Finance leases payable related party |
|
|
719,364 |
|
|
|
839,793 |
|
Operating lease liabilities short term |
|
|
186,645 |
|
|
|
205,414 |
|
Total Current Liabilities |
|
|
2,848,966 |
|
|
|
2,971,756 |
|
|
|
|
|
|
|
|
|
|
Operating lease
liabilities |
|
|
97,354 |
|
|
|
226,344 |
|
Finance leases payable |
|
|
346,622 |
|
|
|
157,424 |
|
Finance leases payable related party |
|
|
281,030 |
|
|
|
364,654 |
|
Total Long Term Liabilities |
|
|
725,006 |
|
|
|
748,422 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,573,972 |
|
|
|
3,720,178 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Preferred stock, Series A par
value $.001; 10,000,000 shares authorized; 0 and 0 shares issued
and outstanding in 2022 and 2021, respectively |
|
|
— |
|
|
|
— |
|
Common stock, par value $.001;
250,000,000 shares authorized; 6,822,127 and 6,693,793 shares
issued and outstanding in 2022 and 2021, respectively |
|
|
6,822 |
|
|
|
6,694 |
|
Additional paid in
capital |
|
|
38,891,891 |
|
|
|
38,241,155 |
|
Accumulated deficit |
|
|
(16,759,284 |
) |
|
|
(15,530,576 |
) |
Total Data Storage Corp
Stockholders' Equity |
|
|
22,139,429 |
|
|
|
22,717,273 |
|
Non-controlling interest in
consolidated subsidiary |
|
|
(132,805 |
) |
|
|
(102,628 |
) |
Total Stockholder’s
Equity |
|
|
22,006,624 |
|
|
|
22,614,645 |
|
Total Liabilities and
Stockholders' Equity |
|
$ |
25,580,596 |
|
|
$ |
26,334,823 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
4,419,285 |
|
|
$ |
3,860,258 |
|
|
$ |
17,904,233 |
|
|
$ |
9,963,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
2,566,984 |
|
|
|
2,317,668 |
|
|
|
11,847,460 |
|
|
|
5,805,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
1,852,301 |
|
|
|
1,542,590 |
|
|
|
6,056,773 |
|
|
|
4,157,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
2,075,525 |
|
|
|
1,874,258 |
|
|
|
7,129,595 |
|
|
|
4,549,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Operations |
|
|
(223,224 |
) |
|
|
(331,668 |
) |
|
|
(1,072,822 |
) |
|
|
(391,669 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(29,739 |
) |
|
|
(15,726 |
) |
|
|
(186,063 |
) |
|
|
(97,392 |
) |
Loss on disposal of equipment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(29,732 |
) |
Gain on forgiveness of debt |
|
|
— |
|
|
|
481,977 |
|
|
|
— |
|
|
|
789,277 |
|
Total Other Income (Expense) |
|
|
(29,739 |
) |
|
|
466,251 |
|
|
|
(186,063 |
) |
|
|
662,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before provision
for income taxes |
|
|
(252,963 |
) |
|
|
134,583 |
|
|
|
(1,258,885 |
) |
|
|
270,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
|
(252,963 |
) |
|
|
134,583 |
|
|
|
(1,258,885 |
) |
|
|
270,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in
consolidated subsidiary |
|
|
7,344 |
|
|
|
1,047 |
|
|
|
30,177 |
|
|
|
6,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) attributable
to Data Storage Corp |
|
|
(245,619 |
) |
|
|
135,630 |
|
|
|
(1,228,708 |
) |
|
|
276,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(63,683 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable
to Common Stockholders |
|
$ |
(245,619 |
) |
|
$ |
135,630 |
|
|
$ |
(1,228,708 |
) |
|
$ |
213,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share –
Basic |
|
$ |
(0.04 |
) |
|
$ |
0.02 |
|
|
$ |
(0.18 |
) |
|
$ |
0.05 |
|
Earning pers Share –
Diluted |
|
$ |
(0.04 |
) |
|
$ |
0.02 |
|
|
$ |
(0.18 |
) |
|
$ |
0.05 |
|
Weighted Average Number of
Shares – Basic |
|
|
6,822,127 |
|
|
|
6,350,826 |
|
|
|
6,759,247 |
|
|
|
4,530,188 |
|
Weighted Average Number of
Shares – Diluted |
|
|
6,822,127 |
|
|
|
6,482,577 |
|
|
|
6,759,247 |
|
|
|
4,720,546 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2022 |
|
2021 |
Cash Flows from Operating
Activities: |
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
(1,258,885 |
) |
|
$ |
270,484 |
|
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
932,328 |
|
|
|
947,669 |
|
Stock based compensation |
|
|
643,930 |
|
|
|
120,252 |
|
Gain on forgiveness of debt |
|
|
— |
|
|
|
(789,277 |
) |
Loss on disposal of equipment |
|
|
— |
|
|
|
29,732 |
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
373,201 |
|
|
|
106,797 |
|
Other assets |
|
|
(63,023 |
) |
|
|
(344 |
) |
Prepaid expenses and other current assets |
|
|
(331,618 |
) |
|
|
(154,912 |
) |
Right of use asset |
|
|
145,853 |
|
|
|
(227,732 |
) |
Accounts payable and accrued expenses |
|
|
147,487 |
|
|
|
(206,385 |
) |
Deferred revenue |
|
|
(295,822 |
) |
|
|
(151,103 |
) |
Deferred tax liability |
|
|
— |
|
|
|
(19,362 |
) |
Operating lease liability |
|
|
(147,759 |
) |
|
|
227,226 |
|
Net Cash Provided by Operating
Activities |
|
|
145,692 |
|
|
|
153,045 |
|
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(62,564 |
) |
|
|
(418,422 |
) |
Cash acquired in business acquisition |
|
|
— |
|
|
|
212,068 |
|
Cash consideration for business acquisition |
|
|
— |
|
|
|
(6,149,343 |
) |
Net Cash Used in Investing
Activities |
|
|
(62,564 |
) |
|
|
(6,355,697 |
) |
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
|
|
Proceeds from line of credit |
|
|
— |
|
|
|
50,000 |
|
Repayments of finance lease obligations related party |
|
|
(644,209 |
) |
|
|
(886,189 |
) |
Repayments of finance lease obligations |
|
|
(299,954 |
) |
|
|
(111,995 |
) |
Proceeds from issuance of common stock with warrants |
|
|
— |
|
|
|
16,944,380 |
|
Cash received for the exercised of warrants |
|
|
— |
|
|
|
3,381,271 |
|
Cash received for the exercised of options |
|
|
6,935 |
|
|
|
— |
|
Repayments of Dividend payable |
|
|
— |
|
|
|
(1,179,357 |
) |
Repayment of line of credit |
|
|
— |
|
|
|
(24 |
) |
Net Cash (Used in) Provided by
Financing Activities |
|
|
(937,228 |
) |
|
|
18,198,086 |
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in Cash
and Cash Equivalents |
|
|
(854,100 |
) |
|
|
11,995,434 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents,
Beginning of Period |
|
|
12,135,803 |
|
|
|
893,598 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End
of Period |
|
$ |
11,281,703 |
|
|
$ |
12,889,032 |
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
100,482 |
|
|
$ |
92,779 |
|
Cash paid for income taxes |
|
$ |
— |
|
|
$ |
— |
|
Non-cash investing and
financing activities: |
|
|
|
|
|
|
|
|
Accrual of preferred stock dividend |
|
$ |
— |
|
|
$ |
63,683 |
|
Assets acquired by finance lease |
|
$ |
1,094,051 |
|
|
$ |
50,000 |
|
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