Data Storage Corporation Achieves Profitability for the

MELVILLE, N.Y., May 15, 2023 (GLOBE NEWSWIRE) — 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 three months ended March 31, 2023.

Chuck Piluso, CEO of Data Storage Corporation, commented, “We are implementing a number of strategic business initiatives that are expected to further accelerate growth, such as expanding our dedicated sales teams, hosting revenue-driven sales events, expanding our channel partner programs, and increasing our international footprint through strategic partnerships. At the same time, we remain focused on streamlining operations and consolidating redundant business expenses. By executing on these initiatives, while focusing our efforts on long-term, high-margin, subscription-based contracts, we believe we can achieve sustained profitability and maximize returns for our shareholders.”

“Towards this end, I’m pleased to report we achieved profitability for the first quarter of 2023 on $6.9 million in revenue. We decreased our selling, general and administrative expenses by 13%, as a result of reallocating resources and eliminating redundancies. With approximately $11 million of cash and short-term investments, and no debt, we believe we are well capitalized with a solid balance sheet and poised for rapid organic growth.”

Conference Call

The Company plans to host a conference call at 10:00 am ET today, May 15, 2023, to discuss the Company’s financial results for the first quarter of 2023 which ended March 31, 2023, 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=1612889&tp_key=d98847e007, 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/news-events) through May 15, 2024. A telephone replay of the call will be available approximately three hours following the call, through May 22, 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: 13738533. 

About Data Storage Corporation
Data 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 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, 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, LLC
212-671-1020
DTST@crescendo-ir.com
SOURCE: Data Storage Corporation

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CONSOLIDATED BALANCE SHEETS

   March 31, 2023 December 31, 2022  (Unaudited)  ASSETS       Current Assets:       Cash and cash equivalents $1,882,039  $2,286,722Accounts receivable (less allowance for credit losses of $31,136 and $27,250 in 2023 and 2022, respectively)  3,671,170   3,502,836Marketable securities  9,114,391   9,010,968Prepaid expenses and other current assets  878,460   584,666Total Current Assets  15,546,060   15,385,192        Property and Equipment:       Property and equipment  7,597,462   7,168,488Less—Accumulated depreciation  (5,177,980)  (4,956,698Net Property and Equipment  2,419,482   2,211,790        Other Assets:       Goodwill  4,238,671   4,238,671Operating lease right-of-use assets  175,842   226,501Other assets  65,736   48,437Intangible assets, net  1,905,914   1,975,644Total Other Assets  6,386,163   6,489,253        Total Assets $24,351,705  $24,086,235        LIABILITIES AND STOCKHOLDERS’ DEFICIT       Current Liabilities:       Accounts payable and accrued expenses $3,699,246  $3,207,577Deferred revenue  309,273   281,060Finance leases payable  308,180   359,868Finance leases payable related party  454,115   520,623Operating lease liabilities short term  143,480   160,657Total Current Liabilities  4,914,294   4,529,785        Operating lease liabilities  36,733   71,772Finance leases payable  192,666   281,242Finance leases payable related party  139,285   256,241Total Long Term Liabilities  368,684   609,255        Total Liabilities  5,282,978   5,139,040        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 2023 and 2022, respectively  —   —Common stock, par value $.001; 250,000,000 shares authorized; 6,834,627 and 6,822,127 shares issued and outstanding in 2023 and 2022, respectively  6,835   6,822Additional paid in capital  39,068,896   38,982,440Accumulated deficit  (19,836,712)  (19,887,378Total Data Storage Corp Stockholders’ Equity  19,239,019   19,101,884Non-controlling interest in consolidated subsidiary  (170,292)  (154,689Total Stockholder’s Equity  19,068,727   18,947,195Total Liabilities and Stockholders’ Equity $24,351,705  $24,086,235

CONSOLIDATED STATEMENTS OF OPERATIONS

  Three Months Ended March 31,  2023 2022     Sales $6,879,723  $8,657,199          Cost of sales  4,789,978   6,011,289          Gross Profit  2,089,745   2,645,910          Selling, general and administrative  2,130,759   2,459,866          Income (Loss) from Operations  (41,014)  186,044          Other Income (Expense)        Interest income (expense), net  76,077   (42,660)Total Other Income (Expense)  76,077   (42,660)         Income before provision for income taxes  35,063   143,384          Benefit from income taxes  —   —          Net Income  35,063   143,384          Non-controlling interest in consolidated subsidiary  15,603   12,626          Net Income Attributable to Common Stockholders $50,666  $156,010          Earnings per Share – Basic $0.01  $0.02 Earnings per Share – Diluted $0.01  $0.02 Weighted Average Number of Shares – Basic  6,822,127   6,695,966 Weighted Average Number of Shares – Diluted  6,954,320   6,955,900 

CONSOLIDATED STATEMENTS OF CASH FLOWS

          Three Months Ended March 31,  2023 2022Cash Flows from Operating Activities:       Net Income $35,063  $143,384Adjustments to reconcile net income to net cash provided by operating activities:       Depreciation and amortization  288,710   351,338Stock based compensation  86,469   66,505Changes in Assets and Liabilities:       Accounts receivable  (168,334)  (1,140,097Other assets  (17,300)  25,180Prepaid expenses and other current assets  (293,794)  (719,842Right of use asset  50,659   47,962Accounts payable and accrued expenses  491,669   2,991,981Deferred revenue  28,213   (74,409Operating lease liability  (52,216)  (48,179Net Cash Provided by Operating Activities  449,139   1,643,823Cash Flows from Investing Activities:       Capital expenditures  (426,671)  (25,946Purchase of short-term investments  (103,423)  —Net Cash Used in Investing Activities  (530,094)  (25,946Cash Flows from Financing Activities:       Repayments of finance lease obligations related party  (183,464)  (274,393Repayments of finance lease obligations  (140,264)  (65,515Cash received for the exercised of options  —   6,935Net Cash Used in Financing Activities  (323,728)  (332,973        Increase (decrease) in Cash and Cash Equivalents  (404,683)  1,284,904        Cash and Cash Equivalents, Beginning of Period  2,286,722   12,135,803        Cash and Cash Equivalents, End of Period $1,882,039  $13,420,707Supplemental Disclosures:       Cash paid for interest $24,863  $41,040Cash paid for income taxes $—  $—Non-cash investing and financing activities:       Assets acquired by finance lease $—  $881,308