Data Storage Corporation (Nasdaq: DTST) (“DSC” and
the “Company”), a provider of diverse business continuity solutions
for disaster-recovery, cloud infrastructure and cyber-security
solutions, today provided a business update and reported financial
results for the second quarter ended June 30, 2022.
Chuck Piluso, CEO of Data Storage Corporation, commented, “We
continue to generate solid year-over-year growth, with revenue
increasing 37% and 121% for the three and six months ended June 30,
2022, respectively. The higher increase in revenue for the six
month period relates to the timing of one-time equipment sales,
which were front-end loaded in the first quarter. Importantly, we
have been increasing our focus on monthly recurring,
subscription-based cloud and managed services, which increased 47%
in the second quarter of 2022, compared to the same period last
year. Given our established leadership position, we believe we are
extremely well positioned to capitalize on growing opportunities as
more companies seek to migrate their IBM Power infrastructure to
the cloud. I’m also pleased to report that despite the lumpiness of
equipment sales, we achieved positive EBITDA in the second quarter
of 2022, and believe we are well positioned to drive increased
profitability going forward given the scalability of our business
model. We also ended the quarter with over $11 million of cash and
cash equivalents and no long-term debt, which provides us a solid
foundation to accelerate our business model.”
Conference Call
The Company plans to host a conference call at
10:00 am Eastern Time today, August 11, 2022, to discuss the
company's financial results for the second quarter ended June 30,
2022, as well as corporate progress and other developments.
The conference call will be available via telephone by dialing
toll-free 844-369-8770 for U.S. callers or for international
callers +1 862-298-0840. A webcast of the call may be accessed at
https://www.webcaster4.com/Webcast/Page/2763/46363, 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 August 11, 2023. A telephone replay
of the call will be available approximately one hour following the
call, through August 25, 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: 46363.
About Data Storage
Corporation
The Company provides a broad range of premium
business continuity solutions from seven data center facilities and
two technical labs throughout the USA and Canada. The Company
serves its clients with cloud infrastructure, disaster recovery and
cyber security solutions. 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/.
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. 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.com
SOURCE: Data Storage Corporation
[Tables follow]
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
June 30,2022 |
|
December 31,2021 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,214,436 |
|
|
$ |
12,135,803 |
|
Accounts receivable (less allowance for credit losses of $28,355
and $30,000 in 2022 and 2021, respectively) |
|
|
2,484,857 |
|
|
|
2,384,367 |
|
Prepaid expenses and other current assets |
|
|
974,845 |
|
|
|
536,401 |
|
Total Current Assets |
|
|
14,674,138 |
|
|
|
15,056,571 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
7,092,451 |
|
|
|
6,595,236 |
|
Less—Accumulated depreciation |
|
|
(4,510,837 |
) |
|
|
(4,657,765 |
) |
Net Property and Equipment |
|
|
2,581,614 |
|
|
|
1,937,471 |
|
|
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
|
6,560,671 |
|
|
|
6,560,671 |
|
Operating lease right-of-use assets |
|
|
325,745 |
|
|
|
422,318 |
|
Other assets |
|
|
103,436 |
|
|
|
103,226 |
|
Intangible assets, net |
|
|
2,115,105 |
|
|
|
2,254,566 |
|
Total Other Assets |
|
|
9,104,957 |
|
|
|
9,340,781 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
26,360,709 |
|
|
$ |
26,334,823 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
1,312,387 |
|
|
$ |
1,343,391 |
|
Deferred revenue |
|
|
249,482 |
|
|
|
366,859 |
|
Finance leases payable |
|
|
424,603 |
|
|
|
216,299 |
|
Finance leases payable related party |
|
|
706,001 |
|
|
|
839,793 |
|
Operating lease liabilities short term |
|
|
207,062 |
|
|
|
205,414 |
|
Total Current Liabilities |
|
|
2,899,535 |
|
|
|
2,971,756 |
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
128,952 |
|
|
|
226,344 |
|
Finance leases payable |
|
|
421,648 |
|
|
|
157,424 |
|
Finance leases payable related party |
|
|
450,970 |
|
|
|
364,654 |
|
Total Long Term Liabilities |
|
|
1,001,570 |
|
|
|
748,422 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,901,105 |
|
|
|
3,720,178 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(Note 6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
38,799,853 |
|
|
|
38,241,155 |
|
Accumulated deficit |
|
|
(16,221,610 |
) |
|
|
(15,530,576 |
) |
Total Data Storage Corp
Stockholders’ Equity |
|
|
22,585,065 |
|
|
|
22,717,273 |
|
Non-controlling interest in
consolidated subsidiary |
|
|
(125,461 |
) |
|
|
(102,628 |
) |
Total Stockholder’s
Equity |
|
|
22,459,604 |
|
|
|
22,614,645 |
|
Total Liabilities and
Stockholders’ Equity |
|
$ |
26,360,709 |
|
|
$ |
26,334,823 |
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
4,827,749 |
|
|
$ |
3,528,249 |
|
|
$ |
13,484,948 |
|
|
$ |
6,102,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
2,977,132 |
|
|
|
2,021,324 |
|
|
|
8,988,421 |
|
|
|
3,442,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
1,850,617 |
|
|
|
1,506,925 |
|
|
|
4,496,527 |
|
|
|
2,660,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
2,594,204 |
|
|
|
1,602,311 |
|
|
|
5,054,070 |
|
|
|
2,720,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Operations |
|
|
(743,587 |
) |
|
|
(95,386 |
) |
|
|
(557,543 |
) |
|
|
(60,001 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(113,664 |
) |
|
|
(46,621 |
) |
|
|
(156,324 |
) |
|
|
(81,666 |
) |
Loss on disposal of equipment |
|
|
— |
|
|
|
(29,732 |
) |
|
|
— |
|
|
|
(29,732 |
) |
Gain on forgiveness of debt |
|
|
— |
|
|
|
307,300 |
|
|
|
— |
|
|
|
307,300 |
|
Total Other Income (Expense) |
|
|
(113,664 |
) |
|
|
230,947 |
|
|
|
(156,324 |
) |
|
|
195,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before provision
for income taxes |
|
|
(857,251 |
) |
|
|
135,561 |
|
|
|
(713,867 |
) |
|
|
135,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
|
(857,251 |
) |
|
|
135,561 |
|
|
|
(713,867 |
) |
|
|
135,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in
consolidated subsidiary |
|
|
10,207 |
|
|
|
3,552 |
|
|
|
22,833 |
|
|
|
5,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) attributable
to Data Storage Corp |
|
|
(847,044 |
) |
|
|
139,113 |
|
|
|
(691,034 |
) |
|
|
141,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends |
|
|
— |
|
|
|
(24,800 |
) |
|
|
— |
|
|
|
(63,683 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable
to Common Stockholders |
|
$ |
(847,044 |
) |
|
$ |
114,313 |
|
|
$ |
(691,034 |
) |
|
$ |
77,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) per Share –
Basic |
|
$ |
(0.13 |
) |
|
$ |
0.03 |
|
|
$ |
(0.10 |
) |
|
$ |
0.02 |
|
Earning (Loss) pers Share –
Diluted |
|
$ |
(0.13 |
) |
|
$ |
0.03 |
|
|
$ |
(0.10 |
) |
|
$ |
0.02 |
|
Weighted Average Number of
Shares - Basic |
|
|
6,758,238 |
|
|
|
3,981,402 |
|
|
|
6,727,108 |
|
|
|
3,607,909 |
|
Weighted Average Number of
Shares - Diluted |
|
|
6,758,238 |
|
|
|
4,118,989 |
|
|
|
6,758,238 |
|
|
|
3,611,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
Six Months Ended June 30, |
|
|
2022 |
|
2021 |
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net Income |
|
$ |
(713,867 |
) |
|
$ |
135,901 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
640,589 |
|
|
|
577,044 |
|
Stock based compensation |
|
|
551,892 |
|
|
|
76,221 |
|
Gain on contingent liability |
|
|
— |
|
|
|
(307,300 |
) |
Loss on disposal of equipment |
|
|
— |
|
|
|
29,732 |
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(100,490 |
) |
|
|
385,134 |
|
Other assets |
|
|
(211 |
) |
|
|
(344 |
) |
Prepaid expenses and other current assets |
|
|
(438,444 |
) |
|
|
(25,443 |
) |
Right of use asset |
|
|
96,573 |
|
|
|
43,362 |
|
Accounts payable and accrued expenses |
|
|
(31,003 |
) |
|
|
53,857 |
|
Deferred revenue |
|
|
(117,377 |
) |
|
|
(99,582 |
) |
Operating lease liability |
|
|
(95,744 |
) |
|
|
(43,565 |
) |
Net Cash (Used in)
Provided by Operating Activities |
|
|
(208,082 |
) |
|
|
825,017 |
|
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(51,220 |
) |
|
|
(303,228 |
) |
Cash consideration for business acquisition |
|
|
— |
|
|
|
(5,937,275 |
) |
Net Cash Used in Investing
Activities |
|
|
(51,220 |
) |
|
|
(6,240,503 |
) |
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
|
|
Repayments of finance lease obligations related party |
|
|
(487,403 |
) |
|
|
(603,495 |
) |
Repayments of finance lease obligations |
|
|
(181,597 |
) |
|
|
(74,010 |
) |
Proceeds from issuance of common stock and warrants |
|
|
— |
|
|
|
9,454,894 |
|
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 |
|
|
(662,065 |
) |
|
|
7,598,008 |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in Cash
and Cash Equivalents |
|
|
(921,367 |
) |
|
|
2,182,522 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents,
Beginning of Period |
|
|
12,135,803 |
|
|
|
893,598 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End
of Period |
|
$ |
11,214,436 |
|
|
$ |
3,076,120 |
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
76,874 |
|
|
$ |
78,136 |
|
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 |
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA
To supplement our consolidated financial
statements presented in accordance with GAAP and to provide
investors with additional information regarding our financial
results, we consider and are including herein Adjusted EBITDA, a
Non-GAAP financial measure. We view Adjusted EBITDA as an operating
performance measure and, as such, we believe that the GAAP
financial measure most directly comparable to it is net income
(loss). We define Adjusted EBITDA as net income adjusted for
interest and financing fees, depreciation, amortization,
stock-based compensation, and other non-cash income and expenses.
We believe that Adjusted EBITDA provides us an important measure of
operating performance because it allows management, investors,
debtholders and others to evaluate and compare ongoing operating
results from period to period by removing the impact of our asset
base, any asset disposals or impairments, stock-based compensation
and other non-cash income and expense items associated with our
reliance on issuing equity-linked debt securities to fund our
working capital.
Our use of Adjusted EBITDA has limitations as an
analytical tool, and this measure should not be considered in
isolation or as a substitute for an analysis of our results as
reported under GAAP, as the excluded items may have significant
effects on our operating results and financial condition.
Additionally, our measure of Adjusted EBITDA may differ from other
companies’ measure of Adjusted EBITDA. When evaluating our
performance, Adjusted EBITDA should be considered with other
financial performance measures, including various cash flow
metrics, net income and other GAAP results. In the future, we may
disclose different non-GAAP financial measures in order to help our
investors and others more meaningfully evaluate and compare our
future results of operations to our previously reported results of
operations.
The following table shows our reconciliation of
net income (loss) to adjusted EBITDA for the three and six months
ended June 30, 2022 and 2021, respectively:
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(857,251 |
) |
|
$ |
135,561 |
|
|
$ |
(713,867 |
) |
|
$ |
135,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
289,251 |
|
|
|
309,855 |
|
|
|
640,589 |
|
|
|
577,044 |
|
Interest income and
expense |
|
|
115,501 |
|
|
|
46,621 |
|
|
|
158,161 |
|
|
|
81,666 |
|
Flagship acquisition
costs |
|
|
— |
|
|
|
— |
|
|
|
605 |
|
|
|
— |
|
Loss on disposal of
equipment |
|
|
— |
|
|
|
29,732 |
|
|
|
— |
|
|
|
29,732 |
|
Gain on forgiveness of
debt |
|
|
— |
|
|
|
(307,300 |
) |
|
|
— |
|
|
|
(307,300 |
) |
Stock based compensation |
|
|
485,387 |
|
|
|
34,050 |
|
|
|
551,892 |
|
|
|
76,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
32,888 |
|
|
$ |
248,519 |
|
|
$ |
637,380 |
|
|
$ |
593,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Storage (NASDAQ:DTSTW)
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From Aug 2024 to Sep 2024
Data Storage (NASDAQ:DTSTW)
Historical Stock Chart
From Sep 2023 to Sep 2024