UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-35384

DATA STORAGE CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		98-0530147
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

225 Broadhollow Road, Suite 307 Melville, NY		11747
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 564-4922

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	DTST	The Nasdaq Capital Market

Warrants to purchase shares of Common Stock, par value $0.001 per share	DTSTW	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of August 14, 2025, was 7,262,436.

DATA STORAGE CORPORATION

FORM 10-Q

INDEX

		Page
PART I- FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024	2

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (unaudited)	3

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (unaudited)	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Control and Procedures	30

PART II- OTHER INFORMATION		31

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

DATA STORAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2025			December 31, 2024
ASSETS	(Unaudited)
Current Assets:
Cash and cash equivalents	$	611,323		$	1,070,097
Accounts receivable, net of allowance for expected credit losses of $16,305 and $31,472, as of June 30, 2025 and December 31, 2024, respectively		1,727,111			2,225,458
Marketable securities		10,510,179			11,261,006
Prepaid expenses and other current assets		1,913,094			859,502
Total current assets		14,761,707			15,416,063

Property and Equipment:
Property and equipment		10,078,502			9,598,963
Less: Accumulated depreciation		(6,740,363	)		(6,159,307	)
Property and equipment, net		3,338,139			3,439,656

Other assets:
Goodwill		4,238,671			4,238,671
Operating lease right-of-use assets		525,416			575,380
Other assets		263,778			183,439
Intangible assets, net		1,293,435			1,427,006
Total long-term assets		6,321,300			6,424,496

Total assets	$	24,421,146		$	25,280,215

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	2,349,999		$	3,183,379
Deferred revenue		227,204			212,390
Finance leases payable		—			17,641
Finance leases payable related party		—			33,879
Operating lease liabilities short term		105,750			98,860
Total current liabilities		2,682,953			3,546,149

Operating lease liabilities		468,432			523,070
Deferred tax liability		39,031			39,031
Total long-term liabilities		507,463			562,101

Total liabilities		3,190,416			4,108,250

Commitments and contingencies (Note 7)

Stockholders’ equity:
Preferred stock, Series A par value $0.001; 10,000,000 shares authorized; 0 and 0 shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively		—			—
Common stock, par value $0.001; 250,000,000 shares authorized; 7,230,619 and 7,045,108 shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively		7,231			7,045
Additional paid in capital		41,094,738			40,417,813
Accumulated deficit		(19,691,560	)		(18,982,589	)
Accumulated other comprehensive income (loss)		64,015			(23,214	)
Total Data Storage Corp stockholders’ equity		21,474,424			21,419,055
Non-controlling interest in consolidated subsidiary		(243,694	)		(247,090	)
Total stockholders’ equity		21,230,730			21,171,965
Total liabilities and stockholders’ equity	$	24,421,146		$	25,280,215

The accompanying notes are an integral part of these condensed consolidated Financial Statements.

DATA STORAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024

Sales	$	5,146,922		$	4,910,492		$	13,230,678		$	13,146,239
Cost of sales		2,610,168			2,502,599			7,834,028			7,771,874
Gross profit		2,536,754			2,407,893			5,396,650			5,374,365

Selling, general and administrative		3,332,421			2,796,679			6,284,826			5,549,356
Loss from operations		(795,667	)		(388,786	)		(888,176	)		(174,991	)

Other income (expense):
Interest income		103,267			152,441			224,173			295,810
Interest expense		(16,236	)		(10,260	)		(18,245	)		(21,520	)
Other expense		(23,327	)		—			(23,327	)		—
Total other income		63,704			142,181			182,601			274,290

Income (loss) before provision for income taxes		(731,963	)		(246,605	)		(705,575	)		99,299

Income taxes		—			—			—			—

Net income (loss)		(731,963	)		(246,605	)		(705,575	)		99,299

(Income) loss in non-controlling interest of consolidated subsidiary		(1,086	)		2,365			(3,396	)		13,563

Net income (loss) attributable to common stockholders	$	(733,049	)	$	(244,240	)	$	(708,971	)	$	112,862

Earnings (loss) per share attributable to common stockholders – basic	$	(0.10	)	$	(0.04	)	$	(0.10	)	$	0.02
Earnings (loss) per share attributable to common stockholders – diluted	$	(0.10	)	$	(0.04	)	$	(0.10	)	$	0.02
Weighted average number of shares - basic		7,155,464			6,973,068			7,119,102			6,902,138
Weighted average number of shares - diluted		7,155,464			6,973,068			7,119,102			7,499,839

The accompanying notes are an integral part of these condensed consolidated Financial Statements.

DATA STORAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND 2024

(Unaudited)


	Preferred Stock				Common Stock				Additional Paid-in		Accumulated				Non-Controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit				Interest			Equity

Balance April 1, 2024		—	$	—		6,929,950	$	6,930	$	39,661,561	$	(19,148,701	)	-	$	(248,146	)	$	20,271,644
Stock options exercised		—		—		36,546		36		71,057		—				—			71,093
Stock-based compensation		—		—		29,326		29		207,818		—		-		—			207,847
Net loss		—		—		—		—		—		(244,240	)			(2,365	)		(246,605	)
Balance June 30, 2024		—	$	—		6,995,822	$	6,995	$	39,940,436	$	(19,392,941	)	-	$	(250,511	)	$	20,303,979

	Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated other comprehensive Income (Loss)		Non-Controlling Interest			Total Stockholders’ Equity

Balance April 1, 2025		—	$	—		7,123,227	$	7,123	$	40,644,000	$	(18,958,511	)	$	3,579	$	(244,780	)	$	21,451,411
Stock options exercised		—		—		17,821		18		38,249		—			—		—			38,267
Stock-based compensation		—		—		89,571		90		412,489		—			—		—			412,579
Gain on foreign currency translation adjustment		—		—		—		—		—		—			60,436		—			60,436
Net income (loss)		—		—		—		—		—		(733,049	)		—		1,086			(731,963	)
Balance June 30, 2025		—	$	—		7,230,619	$	7,231	$	41,094,738	$	(19,691,560	)	$	64,015	$	(243,694	)	$	21,230,730

The accompanying notes are an integral part of these condensed consolidated Financial Statements

DATA STORAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid-in		Accumulated				Non-Controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit				Interest			Equity

Balance January 1, 2024		—	$	—		6,880,460	$	6,881	$	39,490,285	$	(19,505,803	)	-	$	(236,948	)	$	19,754,415
Stock options exercised		—		—		36,546		36		71,057		—				—			71,093
Stock-based compensation		—		—		78,816		78		379,094		—				—			379,172
Net income (loss)		—		—		—		—		—		112,862		-		(13,563	)		99,299
Balance June 30, 2024		—	$	—		6,995,822	$	6,995	$	39,940,436	$	(19,392,941	)	-	$	(250,511	)	$	20,303,979

	Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated other comprehensive Income (Loss)			Non-Controlling Interest			Total Stockholders’ Equity
Balance January 1, 2025		—	$	—		7,045,108	$	7,045	$	40,417,813	$	(18,982,589	)	$	(23,214	)	$	(247,090	)	$	21,171,965
Stock options exercised		—		—		17,821		18		38,249		—			—			—			38,267
Stock-based compensation		—		—		167,690		168		638,676		—			—			—			638,844
Gain on foreign currency translation adjustment		—		—		—		—		—		—			87,229			—			87,229
Net income (loss)		—		—		—		—		—		(708,971	)		—			3,396			(705,575	)
Balance June 30, 2025		—	$	—		7,230,619	$	7,231	$	41,094,738	$	(19,691,560	)	$	64,015		$	(243,694	)	$	21,230,730

The accompanying notes are an integral part of these condensed consolidated Financial Statements

DATA STORAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
	2025			2024
Cash Flows from Operating Activities:
Net (loss) income	$	(705,575	)	$	99,299

SEC Form 10-Q filed by Data Storage Corporation