Data Storage Corporation (Nasdaq: DTST) (the “Company”), a provider
of diverse business continuity, disaster recovery protection, and
cloud infrastructure solutions and services, today provided a
business update and reported its financial results for the second
quarter ended June 30, 2021.
Chuck Piluso, CEO of Data Storage Corporation,
stated, “I am pleased to report we achieved a 76% increase in
revenue for the three months ended June 30, 2021, compared to the
same period last year. Specifically, we reported growth across all
of our product lines, and expect to maintain strong organic growth
going forward. Specifically, revenue for Infrastructure &
Disaster Recovery/Cloud Services increased 25%; revenue for
Equipment and Software increased 208%; revenue for Managed Services
increased 269%; and revenue for Nexxis VoIP services increased 19%.
We attribute this success to an increase in monthly subscription
revenue and additional sales from the Flagship Solutions
merger.”
“As a leading provider of IBM solutions, managed
services and cloud solutions, Flagship’s offerings and established
customers are highly complementary to our business. It’s also
important to note that the increase in reported revenue for the
second quarter of 2021 includes just one month of Flagship results,
June, since we completed the merger on May 31, 2021. Looking ahead,
we see substantial opportunities to cross-sell solutions across
Data Storage and Flagship’s respective clients. We are also
benefitting from other synergies following the acquisition, which
we believe will help drive further operational efficiency across
the organization.”
“Given our expanded offering following the
acquisition, we realigned our sales and marketing strategy to focus
more heavily on four key verticals, where we have particularly
strong sector expertise and see significant growth opportunities.
These verticals include sports, banking & finance, healthcare,
and government. Although we will still focus on opportunities in
other sectors, we believe this new strategy will help accelerate
our organic growth. Overall, we believe we are well positioned. The
target marketplace for Infrastructure as a Service and Disaster
Recovery as a Service is estimated at over one million logical
partitions, virtual servers, in this mission critical technical
environment. Our goal for the remainder of 2021 is to increase our
presence in the IBM Power infrastructure cloud and business
continuity marketplace and to further enhance our position as a
leader in this market.”
“Finally, we have significantly enhanced our
balance sheet. We ended the second quarter of 2021 with
approximately $3.1 million of cash and cash equivalents after
payments for the acquisition of Flagship. Since the end of the
second quarter, we generated an additional $3.4 million in net
proceeds from the exercise of warrants and raised $7.6 million
through our recent registered direct in July. As a result, we
believe we are positioned to execute on our organic growth
strategy, as well as explore opportunistic and accretive
acquisitions.”
Financial Results
Revenue for the three months ended June 30, 2021
was $3.5 million, an increase of 76%, compared to $2.0 million for
the three months ended June 30, 2020. The increase was primarily
attributable to additional sales from the Flagship merger and an
increase in software and equipment sales, and Infrastructure
& Disaster Recovery/Cloud Services.
Selling, general and administrative expenses for
the three months ended June 30, 2021 were $1.6 million compared to
$1.0 million for the three months ended June 30, 2020. The increase
in expenses was primarily attributable to increases in salaries,
professional fees, and advertising expenses as a result of the
Flagship merger.
Net income for the three months ended June 30,
2020 was $135,500 or $0.03 per share, as compared to $183,000 or
$0.05 per share for the three months ended June 30, 2020.
Conference Call
The Company plans to host a conference call at 11:00 AM Eastern
Time on Monday, August 16, 2021, to discuss the Company’s financial
results for the second quarter ended June 30, 2021, 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 using entry code: 518430. A webcast of
the call may be accessed at
https://www.webcaster4.com/Webcast/Page/2763/42513, or on the
Company’s Investor Relations section of the website,
ir.datastoragecorp.com.
A webcast replay of the call will be available
on the Company’s Investor Relations section of the website
(ir.datastoragecorp.com) through August 16, 2022. A telephone
replay of the call will be available approximately one hour
following the call, through August 30, 2021 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: 42513.
About Data Storage
Corporation
The Company delivers and supports a broad range of premium
technology solutions focusing on IaaS, data storage protection and
IT management. Clients look to DSC to ensure disaster recovery,
business continuity, enhance security, and to meet increasing
industry, state and federal regulations. The Company markets to
businesses, government, education and the healthcare industry by
leveraging leading technologies. Through its business units, the
Company provides IaaS, SaaS, DRaaS, VoIP, cyber security, data
analytics, IBM Power systems and storage hardware with managed IT
services. For more information, please visit
http://www.DataStorageCorp.com
Safe Harbor Provision
This 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. The
forward-looking statements include statements regarding the
expansion of the existing relationship with the Falcons
illustrating the scalability and performance of Flagship’s
solutions. 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. Important factors that could cause actual results to
differ materially from the Company’s expectations include, but are
not limited to, the Company’s ability to leverage the scalability
and performance of Flagship’s solutions, the Company’s ability to
benefit from the IBM cloud migration underway, the Company’s
ability to position itself for future profitability and the
Company’s ability to maintain its Nasdaq listing. 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, 2020,
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.
Investor Relations Contact: Crescendo
Communications, LLCTel: 212-671-1021Email:
DTST@crescendo-ir.com
***tables follow***
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
June 30, 2021 |
|
December 31, 2020 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,076,120 |
|
|
$ |
893,598 |
|
Accounts receivable (less allowance for doubtful accounts of
$59,067 and $30,000 in 2021 and 2020, respectively) |
|
|
1,558,716 |
|
|
|
554,587 |
|
Prepaid expenses and other current assets |
|
|
392,489 |
|
|
|
239,472 |
|
Total Current Assets |
|
|
5,027,325 |
|
|
|
1,687,657 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
6,327,875 |
|
|
|
7,845,423 |
|
Less—Accumulated depreciation |
|
|
(4,177,560 |
) |
|
|
(5,543,822 |
) |
Net Property and Equipment |
|
|
2,150,315 |
|
|
|
2,301,601 |
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
13,216,040 |
|
|
|
3,015,700 |
|
Operating lease right-of-use assets |
|
|
198,549 |
|
|
|
241,911 |
|
Other assets |
|
|
72,153 |
|
|
|
49,310 |
|
Intangible assets, net |
|
|
391,662 |
|
|
|
455,935 |
|
Total Other Assets |
|
|
13,878,404 |
|
|
|
3,762,856 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
21,056,044 |
|
|
$ |
7,752,114 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
1,547,763 |
|
|
$ |
979,552 |
|
Dividend payable |
|
|
— |
|
|
|
1,115,674 |
|
Deferred revenue |
|
|
431,047 |
|
|
|
461,893 |
|
Line of credit |
|
|
— |
|
|
|
24 |
|
Finance leases payable |
|
|
174,110 |
|
|
|
168,139 |
|
Finance leases payable related party |
|
|
973,245 |
|
|
|
1,149,403 |
|
Operating lease liabilities short term |
|
|
106,102 |
|
|
|
104,549 |
|
Contingent Consideration |
|
|
4,950,000 |
|
|
|
— |
|
Note payable |
|
|
481,977 |
|
|
|
374,871 |
|
Total Current Liabilities |
|
|
8,664,244 |
|
|
|
4,354,105 |
|
Note payable long term |
|
|
— |
|
|
|
107,106 |
|
Operating lease liabilities long term |
|
|
102,407 |
|
|
|
147,525 |
|
Finance leases payable, long term |
|
|
167,694 |
|
|
|
247,677 |
|
Finance leases payable related party, long term |
|
|
597,408 |
|
|
|
974,743 |
|
Total Long Term Liabilities |
|
|
867,509 |
|
|
|
1,477,051 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
9,531,753 |
|
|
|
5,831,156 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Preferred stock, Series A par
value $.001; 10,000,000 shares authorized; 0 and 1,401,786 shares
issued and outstanding in 2021 and 2020, respectively |
|
|
— |
|
|
|
1,402 |
|
Common stock, par value $.001;
250,000,000 shares authorized; 4,862,352 and 3,213,486 shares
issued and outstanding in 2021 and 2020, respectively |
|
|
4,862 |
|
|
|
3,213 |
|
Additional paid in
capital |
|
|
27,276,653 |
|
|
|
17,745,785 |
|
Accumulated deficit |
|
|
(15,657,208 |
) |
|
|
(15,734,737 |
) |
Total Data Storage Corp
Stockholders’ Equity |
|
|
11,624,307 |
|
|
|
2,015,663 |
|
Non-controlling interest in
consolidated subsidiary |
|
|
(100,016 |
) |
|
|
(94,705 |
) |
Total Stockholder’s
Equity |
|
|
11,524,291 |
|
|
|
1,920,958 |
|
Total Liabilities and
Stockholders’ Equity |
|
$ |
21,056,044 |
|
|
$ |
7,752,114 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
3,528,249 |
|
|
$ |
2,005,625 |
|
|
$ |
6,102,940 |
|
|
$ |
4,104,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
2,021,324 |
|
|
|
1,140,421 |
|
|
|
3,442,223 |
|
|
|
2,356,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
1,506,925 |
|
|
|
865,204 |
|
|
|
2,660,717 |
|
|
|
1,747,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
1,602,311 |
|
|
|
988,266 |
|
|
|
2,720,718 |
|
|
|
1,864,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
Operations |
|
|
(95,386 |
) |
|
|
(123,062 |
) |
|
|
(60,001 |
) |
|
|
(117,095 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
2 |
|
|
|
— |
|
|
|
4 |
|
|
|
20 |
|
Interest expense |
|
|
(46,623 |
) |
|
|
(43,679 |
) |
|
|
(81,670 |
) |
|
|
(90,139 |
) |
Gain on contingent liability |
|
|
— |
|
|
|
350,000 |
|
|
|
— |
|
|
|
350,000 |
|
Loss on disposal of equipment |
|
|
(29,732 |
) |
|
|
— |
|
|
|
(29,732 |
) |
|
|
— |
|
Gain on forgiveness of debt |
|
|
307,300 |
|
|
|
— |
|
|
|
307,300 |
|
|
|
— |
|
Total Other Income (Expense) |
|
|
230,947 |
|
|
|
306,321 |
|
|
|
195,902 |
|
|
|
259,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes |
|
|
135,561 |
|
|
|
183,259 |
|
|
|
135,901 |
|
|
|
142,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
135,561 |
|
|
|
183,259 |
|
|
|
135,901 |
|
|
|
142,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in
consolidated subsidiary |
|
|
3,552 |
|
|
|
7,487 |
|
|
|
5,311 |
|
|
|
13,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to
Data Storage Corp |
|
|
139,113 |
|
|
|
190,746 |
|
|
|
141,212 |
|
|
|
156,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends |
|
|
(24,800 |
) |
|
|
(35,041 |
) |
|
|
(63,683 |
) |
|
|
(69,227 |
) |
Net Income Attributable to Common Stockholders |
|
$ |
114,313 |
|
|
$ |
155,705 |
|
|
$ |
77,529 |
|
|
$ |
87,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share –
Basic |
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
$ |
0.02 |
|
|
$ |
0.03 |
|
Earnings per Share –
Diluted |
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
$ |
0.02 |
|
|
$ |
0.03 |
|
Weighted Average Number of
Shares - Basic |
|
|
3,981,402 |
|
|
|
3,213,485 |
|
|
|
3,607,909 |
|
|
|
3,212,822 |
|
Weighted Average Number of
Shares - Diluted |
|
|
4,118,989 |
|
|
|
3,357,589 |
|
|
|
3,611,242 |
|
|
|
3,356,926 |
|
DATA STORAGE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net Income |
|
$ |
135,901 |
|
|
$ |
142,786 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
577,044 |
|
|
|
494,467 |
|
Stock based compensation |
|
|
76,221 |
|
|
|
74,386 |
|
Gain on forgiveness of debt |
|
|
(307,300 |
) |
|
|
— |
|
Gain on contingent liability |
|
|
— |
|
|
|
(350,000 |
) |
Loss on disposal of equipment |
|
|
29,732 |
|
|
|
— |
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
385,134 |
|
|
|
72,069 |
|
Other assets |
|
|
(344 |
) |
|
|
16,125 |
|
Prepaid expenses and other current assets |
|
|
(25,443 |
) |
|
|
(71,168 |
) |
Right of use asset |
|
|
43,362 |
|
|
|
40,473 |
|
Accounts payable and accrued expenses |
|
|
53,857 |
|
|
|
(55,529 |
) |
Deferred revenue |
|
|
(99,582 |
) |
|
|
56,517 |
|
Operating lease liability |
|
|
(43,565 |
) |
|
|
(39,168 |
) |
Net Cash Provided by
Operating Activities |
|
|
825,017 |
|
|
|
380,958 |
|
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(303,228 |
) |
|
|
(101,850 |
) |
Cash consideration for business acquisition |
|
|
(5,937,275 |
) |
|
|
— |
|
Net Cash Used in Investing
Activities |
|
|
(6,240,503 |
) |
|
|
(101,850 |
) |
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of note payable |
|
|
— |
|
|
|
481,977 |
|
Repayments of finance lease obligations related party |
|
|
(603,495 |
) |
|
|
(397,719 |
) |
Repayments of finance lease obligations |
|
|
(74,010 |
) |
|
|
(4,109 |
) |
Proceeds from issuance of common stock and warrants |
|
|
9,454,894 |
|
|
|
— |
|
Cash received for the exercised of options |
|
|
— |
|
|
|
5,400 |
|
Repayments of Dividend payable |
|
|
(1,179,357 |
) |
|
|
— |
|
Repayment of line of credit |
|
|
(24 |
) |
|
|
(74,976 |
) |
Net Cash Provided by Financing
Activities |
|
|
7,598,008 |
|
|
|
10,573 |
|
|
|
|
|
|
|
|
|
|
Increase in Cash and Cash
Equivalents |
|
|
2,182,522 |
|
|
|
289,681 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents,
Beginning of Period |
|
|
893,598 |
|
|
|
326,561 |
|
Cash and Cash Equivalents, End
of Period |
|
$ |
3,076,120 |
|
|
$ |
616,242 |
|
Supplemental Disclosures |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
78,136 |
|
|
$ |
77,095 |
|
Cash paid for income taxes |
|
$ |
— |
|
|
$ |
— |
|
Non-cash investing and
financing activities: |
|
|
|
|
|
|
|
|
Accrual of preferred stock dividend |
|
$ |
63,683 |
|
|
$ |
69,227 |
|
Assets acquired by finance lease |
|
$ |
50,000 |
|
|
$ |
663,078 |
|
Data Storage (NASDAQ:DTST)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Data Storage (NASDAQ:DTST)
Historical Stock Chart
Von Jul 2023 bis Jul 2024