Data Storage Corporation Reports 60% Increase in Revenue to $23.9 Million for 2022
31 March 2023 - 10:00PM
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 twelve months ended December 31, 2022.
Chuck Piluso, CEO of Data Storage Corporation,
commented, “We made meaningful progress the past year and achieved
a 60% increase in revenue to $23.9 million for 2022. Additionally,
we reported positive adjusted EBITDA for the full year. While we
witnessed strong year-over-year growth, we also implemented several
important strategic initiatives that we believe will enable us to
further accelerate growth and streamline the organization to ensure
sustained profitability within each of our business
subsidiaries.”
“Validating our efforts, our CloudFirst
subsidiary generated $11.5 million of revenue with an EBITDA margin
of 27% and $1.9 million of net income in 2022, on a standalone
basis. Moving forward, we plan to replicate this success across
each of our business segments, including Flagship, which we
acquired in 2021. Specifically, our vision is to grow recurring
revenue. Today, our sales and marketing teams are focused on
building Flagship’s monthly recurring solutions and providing these
solutions to new and existing clients while we continue to provide
equipment and software to our clients. We also believe that
investing in this recurring revenue strategy is aligned with the
overall market as customers are working to outsource services and
migrate to cloud-type solutions.”
“We have also realigned management and sales
personnel to allocate resources towards services and verticals that
we believe will generate the greatest return on capital, with a
focus on areas such as cyber security and migration of customers to
cloud-based solutions and long-term contracted managed services.
These cloud-based solutions represent large addressable markets,
where we are gaining traction, and have positioned ourselves as a
leader in the market. At the same time, we continue to carefully
manage expenses, and have maintained a strong balance sheet with
approximately $11.3 million in cash and short-term investments.
Overall, we are executing on our business growth strategy and look
forward to providing meaningful updates to shareholders as
developments unfold.”
Conference Call
The Company plans to host a conference call at
10:00 am ET today, March 31st, 2023, to discuss the Company's
financial results for the 2022 fiscal year ended December 31, 2022,
as well as corporate progress and other developments.
The conference call will be available via
telephone by dialing toll-free 877-451-6152 for U.S. callers or for
international callers 1-201-389-0879. A webcast of the call may be
accessed at
https://viavid.webcasts.com/starthere.jsp?ei=1604022&tp_key=53ef9c8f83,
or on the Company’s News & Events section of the
website, www.dtst.com/news-events.
A webcast replay of the call will be available
on the Company’s website (www.dtst.com) through March 31st, 2024. A
telephone replay of the call will be available approximately three
hours following the call, through April 7th, 2023, and can be
accessed by dialing 844-512-2921 for U.S. callers or +
1-412-317-6671 for international callers and entering conference
ID: 13737044.
About Data Storage CorporationData Storage
Corporation (Nasdaq: DTST) is a family of fully integrated cyber
security, cloud infrastructure, and voice & data companies,
built around investments in proprietary IT solutions for a broad
range of domestic and global customers, including Fortune 500
clients, across a wide range of industries, such as government,
education, and healthcare, with a focus on the rapidly growing,
multi-billion-dollar business continuity market. A stable and
emerging growth leader in cloud infrastructure support, DTST
companies operate regional data center facilities across North
America, sustainably servicing clients via recurring
subscription agreements. Additional information about the Company
is available at: www.dtst.com and on 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, 2022, 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]
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,286,722 |
|
|
$ |
12,135,803 |
|
Short-term investments |
|
|
9,010,968 |
|
|
|
— |
|
Accounts receivable (less allowance for credit losses of $27,250
and $30,000 in 2022 and 2021, respectively) |
|
|
3,502,836 |
|
|
|
2,384,367 |
|
Prepaid expenses and other current assets |
|
|
584,666 |
|
|
|
536,401 |
|
Total Current Assets |
|
|
15,385,192 |
|
|
|
15,056,571 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
7,168,488 |
|
|
|
6,595,236 |
|
Less—Accumulated depreciation |
|
|
(4,956,698 |
) |
|
|
(4,657,765 |
) |
Net Property and Equipment |
|
|
2,211,790 |
|
|
|
1,937,471 |
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
4,238,671 |
|
|
|
6,560,671 |
|
Operating lease right-of-use assets |
|
|
226,501 |
|
|
|
422,318 |
|
Other assets |
|
|
48,437 |
|
|
|
103,226 |
|
Intangible assets, net |
|
|
1,975,644 |
|
|
|
2,254,566 |
|
Total Other Assets |
|
|
6,489,253 |
|
|
|
9,340,781 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
24,086,235 |
|
|
$ |
26,334,823 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
3,207,577 |
|
|
$ |
1,343,391 |
|
Deferred revenue |
|
|
281,060 |
|
|
|
366,859 |
|
Finance leases payable |
|
|
359,868 |
|
|
|
216,299 |
|
Finance leases payable related party |
|
|
520,623 |
|
|
|
839,793 |
|
Operating lease liabilities short term |
|
|
160,657 |
|
|
|
205,414 |
|
Total Current Liabilities |
|
|
4,529,785 |
|
|
|
2,971,756 |
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
71,772 |
|
|
|
226,344 |
|
Finance leases payable |
|
|
281,242 |
|
|
|
157,424 |
|
Finance leases payable related party |
|
|
256,241 |
|
|
|
364,654 |
|
Total Long Term Liabilities |
|
|
609,255 |
|
|
|
748,422 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
5,139,040 |
|
|
|
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 |
|
|
38,982,440 |
|
|
|
38,241,155 |
|
Accumulated deficit |
|
|
(19,887,378 |
) |
|
|
(15,530,576 |
) |
Total Data Storage Corp Stockholders’ Equity |
|
|
19,101,884 |
|
|
|
22,717,273 |
|
Non-controlling interest in consolidated subsidiary |
|
|
(154,689 |
) |
|
|
(102,628 |
) |
Total Stockholder’s Equity |
|
|
18,947,195 |
|
|
|
22,614,645 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
24,086,235 |
|
|
$ |
26,334,823 |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
Sales |
|
$ |
23,870,837 |
|
|
$ |
14,876,227 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
15,787,544 |
|
|
|
8,459,117 |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
8,083,293 |
|
|
|
6,417,110 |
|
|
|
|
|
|
|
|
|
|
Impairment of intangible assets |
|
|
2,322,000 |
|
|
|
— |
|
Selling, general and administrative |
|
|
9,837,308 |
|
|
|
7,184,182 |
|
|
|
|
|
|
|
|
|
|
Loss from Operations |
|
|
(4,076,015 |
) |
|
|
(767,072 |
) |
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(130,087 |
) |
|
|
(126,746 |
) |
Impairment of deferred offering costs and financing costs
associated with canceled financing efforts |
|
|
(127,343 |
) |
|
|
— |
|
Other Expense |
|
|
(75,418 |
) |
|
|
— |
|
Loss on disposal of equipment |
|
|
— |
|
|
|
(44,732 |
) |
Gain on forgiveness of debt |
|
|
— |
|
|
|
798,840 |
|
Total Other Income (Expense) |
|
|
(332,848 |
) |
|
|
627,362 |
|
|
|
|
|
|
|
|
|
|
Income (Loss) before provision for income taxes |
|
|
(4,408,863 |
) |
|
|
(139,710 |
) |
|
|
|
|
|
|
|
|
|
Benefit from income taxes |
|
|
— |
|
|
|
399,631 |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
|
(4,408,863 |
) |
|
|
259,921 |
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in consolidated subsidiary |
|
|
52,061 |
|
|
|
7,923 |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) attributable to Data Storage Corp |
|
|
(4,356,802 |
) |
|
|
267,844 |
|
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends |
|
|
— |
|
|
|
(63,683 |
) |
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to Common Stockholders |
|
$ |
(4,356,802 |
) |
|
$ |
204,161 |
|
|
|
|
|
|
|
|
|
|
Earnings per Share – Basic |
|
$ |
(0.64 |
) |
|
$ |
0.04 |
|
Earning pers Share – Diluted |
|
$ |
(0.64 |
) |
|
$ |
0.03 |
|
Weighted Average Number of Shares – Basic |
|
|
6,775,140 |
|
|
|
5,075,716 |
|
Weighted Average Number of Shares – Diluted |
|
|
6,775,140 |
|
|
|
6,340,125 |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2022 |
|
2021 |
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(4,408,863 |
) |
|
$ |
259,921 |
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,225,911 |
|
|
|
1,284,345 |
|
Stock based compensation |
|
|
734,479 |
|
|
|
171,798 |
|
Gain on forgiveness of debt |
|
|
— |
|
|
|
(798,840 |
) |
Impairment of deferred offering costs and financing costs
associated with canceled financing efforts |
|
|
127,343 |
|
|
|
— |
|
Impairment of intangible assets |
|
|
2,322,000 |
|
|
|
— |
|
Loss on disposal of equipment |
|
|
— |
|
|
|
44,732 |
|
Received interest income on short-term investments |
|
|
(10,968 |
) |
|
|
|
|
Deferred income taxes, release of valuation allowance |
|
|
— |
|
|
|
(399,631 |
) |
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,118,469 |
) |
|
|
(440,517 |
) |
Other assets |
|
|
54,788 |
|
|
|
(6,417 |
) |
Prepaid expenses and other current assets |
|
|
(48,265 |
) |
|
|
(169,355 |
) |
Right of use asset |
|
|
195,817 |
|
|
|
(180,407 |
) |
Accounts payable and accrued expenses |
|
|
1,864,188 |
|
|
|
(142,233 |
) |
Deferred revenue |
|
|
(85,799 |
) |
|
|
(163,770 |
) |
Operating lease liability |
|
|
(199,329 |
) |
|
|
179,684 |
|
Net Cash Provided by (Used in) Operating Activities |
|
|
652,833 |
|
|
|
(360,690 |
) |
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Investor deposit |
|
|
— |
|
|
|
(25,000 |
) |
Capital expenditures |
|
|
(127,257 |
) |
|
|
(455,835 |
) |
Purchase of short-term investments |
|
|
(9,000,000 |
) |
|
|
— |
|
Cash acquired in business
acquisition |
|
|
— |
|
|
|
212,068 |
|
Cash consideration for business
acquisition |
|
|
— |
|
|
|
(6,149,343 |
) |
Net Cash Used in Investing Activities |
|
|
(9,127,257 |
) |
|
|
(6,418,110 |
) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from line of credit |
|
|
— |
|
|
|
50,000 |
|
Repayments of finance lease obligations related party |
|
|
(867,741 |
) |
|
|
(968,420 |
) |
Repayments of finance lease obligations |
|
|
(386,509 |
) |
|
|
(156,845 |
) |
Payments for deferred offering costs |
|
|
(127,343 |
) |
|
|
— |
|
Proceeds from issuance of common stock and warrants |
|
|
— |
|
|
|
16,944,380 |
|
Cash received for the exercise of Warrants |
|
|
— |
|
|
|
3,381,271 |
|
Cash received for the exercise of options |
|
|
6,934 |
|
|
|
— |
|
Repayments of Dividend payable |
|
|
— |
|
|
|
(1,179,357 |
) |
Repayment of line of credit |
|
|
— |
|
|
|
(50,024 |
) |
Net Cash (Used in) Provided by Financing Activities |
|
|
(1,374,657 |
) |
|
|
18,021,005 |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in Cash and Cash Equivalents |
|
|
(9,849,081 |
) |
|
|
11,242,205 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of Period |
|
|
12,135,803 |
|
|
|
893,598 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period |
|
$ |
2,286,722 |
|
|
$ |
12,135,803 |
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
127,871 |
|
|
$ |
116,682 |
|
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 |
|
|
$ |
164,754 |
|
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