Data Storage Corporation (DTST)

Company overview

• Data Storage Corporation (DTST) is a technology-focused holding company. Historically it provided multi-cloud hosting, fully managed cloud services, disaster recovery, cybersecurity, IT automation, and voice & data solutions.
• After selling its CloudFirst business in September 2025, the company shifted strategy to focus on Nexxis Inc., a nationwide telecommunications and data solutions access provider, and to pursue acquisitions in complementary, high-growth technology sectors, including AI and cybersecurity.

Core operations (Nexxis)

• Nexxis delivers fully managed voice, internet, data transport, and SD-WAN services engineered for enterprise reliability and cloud performance.
• Target customers are distributed enterprises and cloud-dependent organizations. Nexxis offers integrated voice and internet connectivity with unified service management and a single invoice.
• Key value drivers: 24/7 monitoring, multi-carrier redundancy with intelligent SD-WAN routing, unified billing, improved business continuity, and simplified operations.

Recent corporate actions and liquidity

• CloudFirst sale: On September 11, 2025, the CloudFirst business (CloudFirst Technologies Corporation and CloudFirst Europe Ltd.) was sold for a base price of $40.0 million. Net cash proceeds were approximately $31.6 million after expenses and adjustments.
• Tender offer: Began December 8, 2025 to repurchase up to 6,192,990 shares at $5.20 per share (maximum aggregate $32.2 million). The offer expired January 12, 2026. On January 15, 2026, the company repurchased 5,625,129 shares for $29,250,971.
• Shares and cash post-tender: Following the tender, the company had 2,167,138 common shares outstanding and retained over $10 million in cash. As of April 14, 2026, cash and cash equivalents were approximately $9.6 million.
• The company is evaluating acquisitions or other value-enhancing uses for the remaining sale proceeds.

Financial snapshot (selected 2025 vs 2024)

• Revenue from continuing operations (Nexxis): $1,382,929 in 2025; $1,219,247 in 2024 (13.4% year-over-year growth).
• Gross profit (continuing operations): $614,324 in 2025; $527,249 in 2024 (gross margin 44.4% in 2025 vs. 43.2% in 2024).
• Selling, general and administrative (continuing operations): $4,188,026 in 2025; $3,840,368 in 2024.
• Loss from continuing operations, net of tax: $(866,195) in 2025; $(2,759,331) in 2024.
• Interest income: $850,371 in 2025; $592,819 in 2024.
• Discontinued operations:
  • Loss from discontinued operations, net of tax (CloudFirst period January 1, 2025 – September 11, 2025): $(37,518).
  • Gain on sale of discontinued operations, net of tax: $20,118,681.
  • Income from discontinued operations, net of tax: $20,081,163 in 2025 (vs. $3,272,403 in 2024).
• Net income (all operations): $19,214,968 in 2025; $513,072 in 2024.
• Revenue concentration (2025): Top five customers represented about 35.7% of total revenue; no single customer accounted for more than 10% of sales in 2025.
• Accounts receivable concentration (Nexxis): At December 31, 2025 four customers accounted for 25%, 21%, 15%, and 10% of accounts receivable. In 2024 three customers accounted for 18%, 15%, and 14% of accounts receivable. One customer accounted for 16% of sales in 2024.
• Earnings per share:
  • Continuing operations: the company reported a loss per share from continuing operations in 2025.
  • Total net income per share attributable to common stockholders: $2.64 basic and diluted in 2025 (largely driven by the discontinued operations gain); $0.08 basic and diluted in 2024.
• Outstanding equity (early 2026): 2,167,138 shares of common stock outstanding (post-tender).

Employees and governance

• Human capital: seven full-time employees as of March 31, 2026 (four in executive management, one in sales, two in technical roles).
• Governance and controls: The company maintains a clawback-like policy for incentive-based compensation in connection with restatements, and management has initiated remediation efforts for internal controls following the CloudFirst sale.

Where the business is headed

• The Board is evaluating strategic options to deploy remaining sale proceeds, including targeted acquisitions in high-growth technology sectors (AI, GPU-based services, cybersecurity), a potential sale or merger of the company, or a hybrid approach.
• The company is focused on preserving liquidity and maintaining flexibility to pursue the most advantageous path for shareholder value while continuing Nexxis operations.