What changed in this filing

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Item 9A. Controls and Procedures

2024-03-28 compared with 2023-03-31 · 659 added, 489 removed, 304 unchanged (79% of the section changed)

CONTROLS AND PROCEDURES

of Disclosure Controls and Procedures.

of the end of the period covered by this Report, under the supervision and with the participation of DSC’s management, including

its principal executive officer, DSC conducted an evaluation of its disclosure controls and procedures, as such term is defined under

Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls were not effective

as of December 31, 2022, based on the material weaknesses identified below.

Weaknesses in Internal Control over Financial Reporting

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is

a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected

on a timely basis.

This material weakness contributed to the Company not designing and maintaining formal controls to analyze, account

for, and disclose complex transactions, including the accounting for certain consideration received from a vendor.

These material weaknesses

resulted in the restatement of the Company’s previously filed quarterly condensed consolidated financial information for the

periods ended June 30, 2022, related to accrued expenses, cost of goods sold, gross profit, loss from operations, net loss, earnings

per share and the related disclosures.

Plan for the Material Weaknesses

response to the aforementioned material weaknesses, management has expended and will continue to expand a substantial amount of effort

and resources for the remediation of material weaknesses in internal control over financial reporting.

In November of 2022, management

and its advisors began evaluating and documenting the design and operating effectiveness of our internal control over financial reporting,

and their work is ongoing.

Our plan also includes advisors looking over all material agreements monthly to determine accounting treatment for

complex transactions.

The material weaknesses will be considered remediated once management completes the design and implementation of

the measures described above and the controls operate for a sufficient period of time, and management has concluded, through testing,

that these controls are effective.

in Internal Control over Financial Reporting

described above, there were changes in our internal control over financial reporting during the year ended December 31, 2022, which have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure

Controls and Procedures.

As of the end of the

period covered by this Annual Report, under the supervision and with the participation of DSC’s management, including its

principal executive officer and principal financial officer, DSC conducted an evaluation of its disclosure controls and procedures,

as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended

(the “Exchange Act”).

Rule 13a-15(e) under the Exchange Act defines “disclosure controls and procedures”

as controls and other procedures of a company that are designed to ensure that the information required to be disclosed by a company

in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time

periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to a company’s

management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding

required disclosure.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our

disclosure controls and procedures were effective at the reasonable assurance level at December 31, 2023.

control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of

the control system are met.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation

and presentation.

Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that

the objectives of our disclosure control system are met.

As set forth above, our Chief Executive Officer and Chief Financial Officer

have concluded, based on the evaluation as of the end of the period covered by this Report, that our disclosure controls and procedures

were effective to provide reasonable assurance that the objectives of our disclosure control system were met.

Management ’ s

Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15.

Internal control over financial

reporting is defined in Rule 13a-15(f) and 15(d)-15(f) under the Exchange Act as a process designed to provide reasonable assurance to

our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

Management conducted

an assessment of our internal control over financial reporting as of December 31, 2023, based on the framework and criteria established

by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).

assessment, management concluded that, as of December 31, 2023, our internal control over financial reporting is effective.

Changes in Internal Control

over Financial Reporting

As described above, there were no changes in our internal control over financial

reporting during the three months ended December 31, 2023, which would affect, or are reasonably likely to materially affect, our internal

control over financial reporting.

OTHER INFORMATION

During the three months ended December 31, 2023, no

director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “nonRule 10b5-1 trading

arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

5 unchanged sentences

holds his office until his successor is elected and qualified or his earlier resignation or removal.

of the Board, Chief Executive Officer

Financial Officer

Chairman of the Board, Chief Executive Officer

Chief Financial Officer

Director, President

Director, Executive Vice President

1 unchanged sentence

Piluso, Chairman of the Board and, Chief Executive Officer

Piluso is Data Storage’s

Chief Executive Officer and Chairman of the Board.

He has served as Chief Executive Officer since 2008, Treasurer since 2020, and Chairman

of the Board since 2008.

Prior to founding Data Storage in 2001, Mr.

Piluso founded North American Telecommunication Corporation a facilities-based

Competitive Local Exchange Carrier licensed by the Public Service Commission in ten states, serving as the company’s Chairman and

President from 1997 to 2000.

Between 1990 and 1997, Mr.

Piluso served as Chairman & Founder of International Telecommunications Corporation

(“ITC”), a facilities-based international carrier licensed by the Federal Communications Commission.

ITC participated in a

consolidation strategy that went public in 1997 for $800 million.

Piluso holds a bachelor’s degree, a Master of Arts in Political

Science and Public Administration and a Master of Business Administration all from St.

Piluso holds the positions of Chairman of the

Board and Chief Executive Officer at Data Storage Corporation.

Additionally, assumed the role of Treasurer in 2020.

His entrepreneurial

spirit led to the co-founding of our subsidiary, CloudFirst Technologies Corporation, in 2001.

Prior to his tenure at Data Storage Corporation,

Piluso co-founded North American Telecommunication Corporation, serving as its Chairman and President, and played a pivotal role in

its growth as a facilities-based Competitive Local Exchange Carrier licensed in ten states.

His leadership extended to International Telecommunications

Corporation, where he served as Chairman and Founder, culminating in a successful consolidation that went public in 1997 with a value

of $800 million.

Piluso's academic credentials include a bachelor’s degree, a Master of Arts in Political Science and Public

Administration, and a Master of Business Administration, all earned from St.

John’s University.

He was an Instructor Professor

John’s University, College of Business from 1986 through 1988.

From 2001 to 2013, served on the Board of Trustees of Molloy

Piluso served on the Board of Governors at St.

John’s University from 2001 to 2016 and Governor Emeritus;

and is currently

serving on the Board of Advisors for the Nassau County Police Department Foundation.

Past roles include Instructor Professor

John’s University, College of Business, and his service on the Board of Trustees of Molloy College from 2001 to 2013.

Additionally,

he has contributed to institutions such as St.

John’s University, where he served on the Board of Governors from 2001 to 2016, earning

the title of Governor Emeritus.

Currently, Mr.

Piluso serves on the Board of Advisors for the Nassau County Police Department Foundation.

We believe that Mr.

is qualified to serve as a member of our Board due to his technical expertise and management experience of technology and communications

Piluso’s technical expertise

and management experience in the technology and communications sectors make him qualified to serve as a member of our Board.

Panagiotakos,

Chief Financial Officer

has served as our Chief Financial Officer since May 18, 2021.

Panagiotakos served as the Vice President, Corporate Controller of Cinedigm

Nasdaq Global Market) from April 2017 until March 2021, where he was responsible for the company’s accounting function,

oversight of the company’s external audit, compliance and controls in addition to staff training and development.

Prior to becoming

Vice President, Corporate Controller of Cinedigm Corp, he served as their Corporate Assistant Controller from October 2013 to April 2017.

From September 2004 to October 2013, Mr.

Panagiotakos served in various capacities in the accounting department at Young Broadcasting

Inc., including as Controller of one its divisions and Assistant Corporate Controller.

Panagiotakos has over 24 years in public company

accounting experience, and he brings a broad range of experience related to public company accounting matters.

Panagiotakos holds

a Bachelor of Business Administration in Accounting from Bernard M.

Baruch College, a Masters of Business Administration from Texas A&M

University-Commerce, and is a Certified Public Accountant.

Panagiotakos assumed the role of Chief

Financial Officer for the Company on May 18, 2021.

Prior to joining us, he served as the Vice President, Corporate Controller of

Cineverse Corp., formerly Cinedigm Corp., from April 2017 to March 2021.

In this capacity, he oversaw the company’s accounting

function, managed external audits, ensured compliance, and implemented controls while also focusing on staff training and development.

Preceding his tenure as Vice President, Corporate Controller, Mr.

Panagiotakos held the position of Corporate Assistant Controller

at Cinedigm Corp.

from October 2013 to April 2017.

With over 26 years of experience in public company accounting, Mr.

brings a wealth of expertise to our financial leadership team.

His extensive background includes various roles within the accounting

department at Young Broadcasting Inc.

from September 2004 to October 2013, including serving as Controller of one of its divisions

and as Assistant Corporate Controller.

Panagiotakos is a Certified Public Accountant and holds a Bachelor of Business Administration

in Accounting from Bernard M.

Baruch College, as well as a Master of Business Administration from Texas A&M University-Commerce.

His comprehensive knowledge and proficiency in public company accounting matters make him a valuable asset to our financial operations.

Schwartz, President and Director

Schwartz is CloudFirst’s President and serves as a Director.

He has served as President and Director since December 2016 and

served as Treasurer from 2016 to 2020.

Since 1995, Mr.

Schwartz has served as vice president of ABC Services, Inc., which he co-founded,

where he was responsible for the strategic direction of the company, operations, business development and sales.

Over the past two decades,

Schwartz has honed his expertise in IBM business systems, business continuity and helping organizations increase IT performance while

reducing costs.

In addition, Mr.

Schwartz is the founder of Systems Trading, Inc., a technology leasing company established in 1997, where

Schwartz serves as the company’s CEO and president.

Prior to founding these two businesses, Mr.

Schwartz was with CAC Leasing

for six years, where he started a lease asset sales division in 1991.

This division was established shortly after Mr.

Schwartz earned

his bachelor’s degree in business from California State University in San Bernardino.

Since 2010, Mr.

Schwartz has served on the

Board of Advisors for Data Storage Corporation.

We believe that Mr.

is qualified to serve as a member of our Board due to his proven ability to strengthen and improve the operations of the companies he

has been a part of his experience in sales and business development and his knowledge of the industry.

Kempster, Executive Vice President and Director

Kempster is Flagship

Solution Group’s President, Data Storage’s Executive Vice President and has served as Director since 2016.

Prior to his current

position, Mr.

Kempster served as the President of Service Delivery until 2021 and was directly responsible for the foundation of the Company’s

highly rated customer service which is exists today.

Prior to Data Storage Corporation Mr.

Kempster founded ABC Services in 1994 and served

as founder and president until 2016.

ABC Services was an IBM Gold partner and provided managed services, equipment, software and specialized

in IBM Power systems.

In 2012 ABC Services launched a joint venture with Data Storage Corporation to provide cloud infrastructure on IBM

Power systems.

The joint venture was Secure Infrastructure and Services, (SIAS).

In 2016, ABC Services was acquired by Data Storage Corporation.

We believe that Mr.

is qualified to serve as a member of our Board because of his practical experience in a broad range of competencies including his industry

Schwartz assumes the pivotal roles of President

and Director at our organization, a position he has held since December 2016.

His contributions to the Company's success extend

beyond his tenure as Treasurer from 2016 to 2020.

Additionally, he serves as President of CloudFirst and holds a seat on its board

of directors.

With a professional background spanning from 1988 to 2016, Mr.

Schwartz served as Vice President of ABC Services,

Inc., a company he co-founded.

During his tenure, he played a key role in steering the strategic direction, operations, and business

development of ABC Services and other affiliated ventures.

Over the course of three decades, Mr.

Schwartz has leveraged his expertise

in IBM business systems, business continuity, and cybersecurity to empower organizations in enhancing IT performance, safeguarding

data, and optimizing costs.

Schwartz's entrepreneurial spirit led him to establish Systems Trading, Inc.

in 1997, a technology

leasing company, where he currently serves as Chief Executive Officer and President.

Prior to founding these ventures, he honed

his skills collaborating with various IBM business partners.

Schwartz obtained his bachelor’s degree in business from

California State University in San Bernardino.

We hold confidence in Mr.

Schwartz's leadership acumen

and qualifications to serve as President and Board member, underpinned by his track record of steering companies to success.

His extensive

experience in marketing, sales, and business development, coupled with his industry knowledge, makes him an asset to our organization.

Executive Vice President and Director

Kempster brings a wealth of experience to his

role as Executive Vice President and Director, a position he has held since February 2020, along with his membership on our Board since

December 2016.

Prior to his current executive positions, Mr.

Kempster served as the President of Service Delivery until 2021, where he

played a pivotal role in laying the foundation for the company’s acclaimed customer service standards.

His leadership directly contributed

to the establishment of the highly rated customer service that distinguishes our company today.

Before joining Data Storage Corporation,

Kempster founded ABC Services in 1994 and served as its president until 2016.

ABC Services, an IBM Premier partner, specialized in

providing managed services, equipment, and software, with a particular focus on IBM Power systems.

In 2012, ABC Services embarked on a

joint venture with Data Storage Corporation, leading to the establishment of Secure Infrastructure and Services (SIAS).

This collaboration

marked a significant milestone in providing cloud infrastructure on IBM Power systems.

Ultimately, in 2016, ABC Services was acquired

by Data Storage Corporation.

We firmly believe that Mr.

Kempster’s extensive

industry experience and diverse skill set make him exceptionally qualified to serve as a member of our Board.

His practical expertise

spans various competencies, underlining his valuable contributions to our organization's strategic direction and operational excellence.

John Argen, Director

Argen has been a Director

since January 12, 2006.

Argen has been a Business Consultant and Developer specializing in the information technology, telecommunications,

and construction industries since 2003.

He is a seasoned professional that brings 30 years of experience and entrepreneurial success from

working with small business owners to Fortune 500 firms.

From 1992 to 2003, Mr.

Argen was the CEO and founder of DCC Systems, a privately

held nationwide Technology Design / Build Construction Development and Consulting Solutions firm.

Argen built DCC Systems from the

ground up, re-engineering the firm several times to meet the needs of its clientele and enabled DCC Systems to produce gross revenues

exceeding $100 million dollars in 2000.

With a tenure spanning since October 2008, Mr.

brings his expertise to our Board as a seasoned Business Consultant and Developer, specializing in information technology, telecommunications,

and construction industries.

His impressive 40-year career encompasses a wide spectrum of experiences, ranging from working with small

business owners to Fortune 500 firms.

As the CEO and founder of DCC Systems from 1992 to 2003, Mr.

Argen demonstrated exceptional leadership

in building the firm from the ground up, steering it to produce gross revenues exceeding $100 million in 2000.

His innovative approach

to Technology Design/Build Construction Development and Consulting Solutions earned accolades, including features on NBC's "Business

Now" for his groundbreaking Technology Construction Management methodology.

Prior to DCC Systems, Mr.

Argen held senior management positions for 15 years at ITT/Metromedia

and was VP of Engineering& Operations at DataNet, a Wilcox & Gibbs company for 2 years.

Throughout his corporate tenure, he has

worked in Operations, Marketing, Systems Engineering, Telecommunications and Information Technology.

Argen graduated Pace University

with a BPS in Finance.

His commitment to continued education is reflected in his completion to over 2000 hours of corporate sponsored

Argen also holds a Federal Communication Commission (FCC) Radio Telephone 1st Class License.

We believe that Mr.

is qualified to serve as a member of our Board because of his practical experience in managing the growth of companies, including technology

and communication companies, and his general knowledge and experience of the industry.

Hoffman, Director

Hoffman has been a Director

since August 29, 2001.

Hoffman has been a partner at Kelley Drye & Warren LLP in the firm’s Washington, D.C.

His commercial practice focuses on real estate and corporate transactions cutting across a wide range of industries.

real estate practice involves developers, borrowers, lenders, buyers, sellers, landlords and tenants.

Hoffman’s corporate experience

includes the purchase and sale of assets and companies as well as venture capital, equipment leasing and institutional financing transactions.

Hoffman represents telecommunications companies, real estate developers, lenders, venture capital funds, emerging growth companies,

thoroughbred horse industry interests and high net-worth individuals.

Hoffman received his Bachelor of Science, cum laude ,

from the University of Maryland and his Juris Doctor degree, with honors, from the George Washington University Law School.

Argen held senior management

positions at ITT and Metromedia for 15 years and served as VP of Engineering & Operations at DataNet, a Wilcox & Gibbs company,

Throughout his career, he has been deeply involved in Operations, Marketing, Systems Engineering, Telecommunications, and

Information Technology, overseeing technology-related and construction projects worth over a billion dollars.

Argen's commitment to

continued education is evident in his completion of over 2000 hours of corporate-sponsored courses.

He holds a BPS in Finance from Pace

University and a Federal Communication Commission (FCC) Radio Telephone 1st Class License, further underscoring his dedication to professional

growth and development.

We believe that Mr.

is qualified to serve as a member of our Board because of his legal knowledge, leadership experience and general industry familiarity.

Argen's practical experience in

managing the growth of companies, particularly in the technology and communication sectors, coupled with his knowledge and understanding

of the industry, make him an asset to our Board.

His insights and approaches will undoubtedly contribute to our ongoing success and growth

Maglione, Jr., Director

Maglione has been a Director

since August 29, 2001.

Maglione has been a partner in the accounting firm Eisner & Maglione CPAs, LLC since January 2007.

Maglione, a co-founder of DSC, LLC, is a financial management veteran with more than 30 years of experience.

Prior to joining the Company

Maglione was a co-founder of North American Telecommunications Corporation (“NATC”), a local phone service provider

which provides local and long-distance telephone services and data connectivity to small and medium sized businesses, where Mr.

served as NATC’s Chief Financial Officer and Executive Vice President from September 1997 through January 2001 where he was responsible

for all finance, legal and administration functions.

Prior to NATC, Mr.

Maglione spent over 14 years in public accounting, and he brings

a broad range of experience related to companies in the technology, retail services and manufacturing industries.

Maglione holds a

Bachelor of Science degree in Accountancy from Hofstra University, a Master of Science in Taxation from LIU Post, and is a Certified Public

Maglione is a member of the New York State Society of CPAs.

We believe that Mr.

is qualified to serve as a member of our Board because of his practical accounting knowledge, leadership experience and general industry

Maglione has been a member of our Board

since October 2002, bringing with him a wealth of expertise in financial management and accounting.

Additionally, he has served

as a director of CloudFirst since August 29, 2001.

As a partner in the accounting firm Eisner & Maglione CPAs, LLC since January

Maglione has demonstrated his prowess in financial stewardship and strategic guidance.

With 35 years of experience in

financial management, Mr.

Maglione's journey with our Company traces back to its inception in 2002.

Additionally, he co-founded

North American Telecommunications Corporation, a local telecommunications service provider.

During his tenure at North American,

Maglione held the roles of Chief Financial Officer and Executive Vice President, overseeing all finance, legal, and administration

Maglione's professional journey also encompasses over 35 years in public accounting, across various industries,

including technology, retail services, and manufacturing.

His educational background includes a Bachelor of Science degree in Accountancy

from Hofstra University and a Master of Science in Taxation from Long Island University.

He is also a Certified Public Accountant

and a member of the New York State Society of CPAs.

We are confident that Mr.

Maglione's extensive experience,

leadership, and understanding of industry dynamics make him an invaluable asset to our Board, contributing to our strategic vision and

financial growth.

Correll, Director

Correll has served as

a Director form August 2014 until September 6, 2017 and then was reappointed to serve as a Director on November 5, 2019, and Mr.

previously served as a Director from 2014 to 2017.

Correll has served as a financial and operations executive consultant and board

member for SACo, a leading online retail operation.

From 2001 through 2017, Mr.

Correll founded and served as CEO of Broadsmart Florida,

(“Broadsmart”), a facility-based VoIP carrier.

Correll’s leadership as its CEO, Broadsmart grew from

a local phone company to a nationwide carrier delivering IP based dial tone, broadband and ancillary services.

Broadsmart was acquired

by Magic Jack in 2016 for $42 million, and Mr.

Correll continued to serve as its CEO until 2017.

Correll attended Syracuse University.

Correll holds a pilot’s license as well as a USCG Captains license.

Correll brings experience and expertise to our

Board, having previously served as a member from August 2014 until September 2017, before being reappointed on November 5, 2019.

His extensive

background includes roles as a financial and operations executive consultant and board member for SACo, a prominent online retail operation

from 2017 to 2022.

From 2001 to 2017, Mr.

Correll served as the CEO of Broadsmart Florida, Inc.

("Broadsmart"), a facility-based

VoIP carrier, where he played a pivotal role in its transformation from a local phone company to a nationwide carrier offering IP-based

dial tone, broadband, and ancillary services.

His leadership was instrumental in Broadsmart's growth and eventual acquisition by Magic

Jack in 2016 for $42 million.

Despite the acquisition, Mr.

Correll continued to serve as CEO until 2017.

Correll's educational background

includes studies at Syracuse University, and he holds both a pilot's license and a USCG Captain's license, indicative of his diverse skill

set and dedication to excellence.

We believe that Mr.

is qualified to serve as a member of our Board because of his practical experience with the Company and his executive experience at telecommunications

and technology companies.

Correll's experience, particularly

in the telecommunications and technology sectors, along with his proven track record of leadership and strategic insight, make him an

invaluable addition to our Board, contributing to our continued growth and success.

Matthew Grover, Director

Grover has served as

a Director since November 5, 2019.

Since January 2019, Mr.

Grover has served as the Executive Vice President of Business Services at Altice

ATUS), which is one of the largest broadband communications and video services providers in the United States, delivering broadband,

pay television, mobile, proprietary content and advertising services to approximately 4.9 million residential and business customers across

21 states through its Optimum and Suddenlink brands.

The company operates an advanced advertising and data business, which provides audience-based,

multiscreen advertising solutions to local, regional and national businesses and advertising clients.

Altice USA also offers hyper-local,

national, international and business news through its News 12, Cheddar and i24NEWS networks.

Grover began his 19-year Altice USA career

in 2001 when he joined Altice USA’s Lightpath division as Director of Sales Planning.

Since then, he has held various positions

with increasing responsibilities.

Grover assumed the position of Vice President and General Manager of Optimum West Commercial

Services, overseeing sales and sales operations in the Rocky Mountain States of Montana, Wyoming, Colorado, and Utah, until it was sold

to Charter Communications in August 2013.

From 2013 to 2018, he was Senior Vice President of Commercial Sales, Product, and Marketing.

In early 2019, he was promoted to EVP of Business Services.

Prior to joining Altice USA, Mr.

Grover held various management positions

over the course of nearly ten years, including Vice President of Sales at North American Telecom, Global Account Manager at AT&T in

Los Angeles, CA, and District Sales Manager at AT&T in New York, NY.

He serves as an Advisory Board Member of Data Storage Corporation

and is a member of the Board of Trustees at Molloy College in Rockville Centre, NY.

Grover attained his BA in Economics from Stony

Brook University and earned his MBA from the University of Southern California.

Grover has been a valued member of our Board since

November 5, 2019.

He brings with him a wealth of experience garnered from his impressive 23-year career at Altice USA, where he held various

leadership positions, culminating in his role as Chief Revenue Officer (CRO).

Altice USA stands as one of the nation's foremost providers

of broadband communications and video services, serving approximately 4.9 million residential and business customers across 21 states

through its Optimum and Suddenlink brands.

During his tenure, Mr.

Grover played a pivotal role in steering Altice USA's growth trajectory,

overseeing diverse functions such as sales, retention, marketing, and product in both the B2C and B2B segments.

Grover's journey at

Altice USA commenced in 2001 when he joined the Lightpath division as Director of Sales Planning.

Over the years, he demonstrated exceptional

leadership and strategic acumen, earning promotions to increasingly senior roles.

Notably, he served as Vice President and General Manager

of Optimum West Commercial Services, where he managed all B2B operations across the Rocky Mountain States until its acquisition by Charter

Communications in 2013.

Subsequently, as Senior Vice President of Commercial Sales, Product, and Marketing, Mr.

Grover played a pivotal

role in driving commercial initiatives and expanding market reach.

Prior to his tenure at Altice USA, Mr.

Grover held several management

positions over nearly a decade, including roles at North American Telecom and AT&T, where he honed his skills in sales, marketing,

operations, and product.

In addition to his corporate achievements, Mr.

Grover is actively engaged in serving the community and academia.

He serves as a Board Member of Data Storage Corporation and has previously contributed his expertise as a member of the Board of Trustees

at Molloy College in Rockville Centre, New York.

Grover holds a BA in Economics from Stony Brook University and earned his MBA from

the University of Southern California.

We believe that Mr.

is qualified to serve as a member of our Board because of his practical experience in a broad range of competencies including his public

company experience.

Committees of the Board of Directors

The Board of Directors has a standing Audit Committee,

Compensation Committee, and Nominating & Corporate Governance Committee.

The following table shows the directors who are currently

members or Chairman of each of these committees.

& Corporate Governance Committee

Maglione, Jr.

company operations experience, coupled with his strategic insight and commitment to excellence.

Clifford Stein, Director

Stein was appointed to

the board of directors on January 12, 2024, and is the Chief Executive Officer of Savitar Realty Advisors, a real estate advisory firm

founded by him in 1988 which provides assistance to lenders and financial institutions on nonperforming real estate assets.

He is an attorney

and has been a member of the Florida Bar Association since 1982.

Stein has acted as an expert witness in various litigation matters

involving real estate transactions and has been appointed as a Receiver, an Examiner and a Trustee in state and federal courts.

previously served on our board of directors from June 2010 to November 2020.

We believe that Mr.

is qualified to serve as a member of our Board because of his leadership and legal experience.

M Stallone, Director

Stallone was appointed as Director on March

With a background in accounting and finance, treasury and risk management, corporate governance and corporate leadership,

she brings a wealth of experience to our Board.

Since June 2016, Ms.

Stallone has held the positions of Corporate Treasurer and

Assistant Corporate Secretary at Comtech Telecommunications Corp., a global technology leader providing terrestrial and wireless

network solutions, next-generation 9-1-1 emergency services, satellite and space communications technologies, and cloud-native

capabilities to commercial and government customers worldwide.

Prior to this role, she served as Vice President of Finance from

2006 to 2016 and as Corporate Secretary from 2016 to October 2023.

Stallone's career journey includes key financial leadership

roles, including Vice President of Internal Audit at Atkins Nutritionals, Inc.

from 2004 to 2006 and Chief Financial Officer of

North America for Techpack America, Inc., a division of Albéa Group, from 1996 to 2004.

Prior to that, she held the position

of Senior Manager at Deloitte & Touche LLP, where she provided financial services to various public and private companies in

the manufacturing, distribution, and service industries from 1983 to 1996.

A Certified Public Accountant in New York State and

member of the American Institute of Certified Public Accountants, Ms.

Stallone holds a Bachelor of Science in Accounting from Long

Island University and an Executive MBA from St.

Joseph's University.

Her commitment to education is further reflected in her previous

role as an adjunct professor in accounting at St.

Joseph's University.

Stallone's diverse expertise in finance and accounting,

treasury and risk management coupled with her extensive experience in corporate governance, makes her a valuable addition to our

We are confident that her strategic insights and financial acumen will contribute significantly to our Company's continued

growth and success.

We believe that Ms.

is qualified to serve as a member of our Board because of her accounting and business experience.

Mitchell, Director

Mitchell was appointed to the Board of Directors on March 5, 2024, and has served

since December 2021 as privacy counsel to Riskonnect Inc.

providing privacy legal advice on business projects and initiatives.

From April 2021 until December 2021, he served as counsel to the data privacy team at The Government Employees Insurance Company

From May 2018 until April 2021, he was an associate at the Law Office of Goldstein, Flecker & Hopkins.

In 2005, upon

graduation from New York Institute of Technology Mr.

Mitchell worked at the Company as a computer technician.

In 2009, he worked

full-time at Data Storage Corporation in the daytime and attended law school at St.

Johns Law School, evening division, at night.

Mitchell holds a Juris Doctor from St.

John’s University School of Law.

We believe that Mr.

is qualified to serve as a member of our Board because of his industry and legal experience.

Composition of our Board of Directors

Our board of directors currently consists of nine

Our directors hold office until their successors have been elected and qualified or until the earlier of their death, resignation,

Our Board of Directors currently consists of

Our directors hold office until their successors have been elected and qualified or until the earlier of their death,

resignation, or removal.

There are no family relationships among any of our directors or executive officers.

12 unchanged sentences

Our Board has determined

John Argen (Chair), Joseph B.

Hoffman, and Matthew Grover are independent under the Nasdaq Listing Rules’ independence standards

for the members of our Board’s audit committee (the “Audit Committee”);

Hoffman (Chair), Todd A.

and Matthew Grover are independent under the Nasdaq Listing Rules independence standards for the members of our Board compensation committee

(the “Compensation Committee”);

John Argen (Chair), Nancy M.

Stallone and Matthew Grover are independent under the Nasdaq Listing Rules’ independence

standards for the members of our Board’s audit committee (the “Audit Committee”);

(Chair), Todd A.

Matthew Grover are independent under the Nasdaq Listing Rules independence standards for the members of our Board’s compensation

committee (the “Compensation Committee”);

and Lawrence A.

Maglione, Jr.

(Chair), Joseph B.

Hoffman and John Argen are independent under

the Nasdaq Listing Rules’ independence standards for the members of our Board’s Nominating & Corporate Governance committee

(the “Nominating & Corporate Governance Committee”).

(Chair), and John Argen are independent under

the Nasdaq Listing Rules’ independence standards for the members of our Board’s Nominating & Corporate Governance

committee (the “Nominating & Corporate Governance Committee”).

Term of Office

Our directors are elected for one-year terms to hold

office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws.

are appointed by our Board and hold office until removed by the board.

Our directors are elected for one-year terms

to hold office until the next annual meeting of our shareholders or until removed from office in accordance with our bylaws.

officers are appointed by our Board and hold office until removed by the Board.

Committees of the Board of

The Board of Directors has a standing Audit Committee,

Compensation Committee, and Nominating & Corporate Governance Committee.

Audit Committee

2 unchanged sentences

The Audit Committee members

John Argen (Chair), Matthew Grover and Joseph B.

The Board has determined that Joseph B.

Hoffman is an “Audit Committee

John Argen (Chair), Matthew Grover and Nancy M.

The Board has determined that Nancy M.

Stallone is an “Audit Committee

Financial Expert” as defined by SEC rules and regulations.

4 unchanged sentences

Compensation Committee

The Company has a Compensation Committee consisting

of non-executive directors each of whom the Board has determined is an independent director pursuant to the Nasdaq Listing Rules.

Compensation Committee members are Joseph B.

Hoffman (Chair), Todd A.

The Company has a Compensation Committee consisting of non-executive directors

each of whom the Board has determined is an independent director pursuant to the Nasdaq Listing Rules.

The Compensation Committee members

Correll and Matthew Grover.

The Compensation Committee operates

pursuant to a written charter adopted by the board of directors, which is available on our website at www.dtst.com .

describes in more detail the nature and scope of responsibilities of the Compensation Committee.

The Compensation Committee operates pursuant to a written charter adopted by the board of directors,

which is available on our website at www.dtst.com .

The charter describes in more detail the nature and scope of responsibilities

of the Compensation Committee.

Nominating & Corporate Governance Committee

4 unchanged sentences

Maglione, Jr.

(Chair), John Argen and Joseph

The Nominating & Corporate Governance Committee operates pursuant to a written charter adopted by the board of directors,

which is available on our website at www.dtst.com .

The charter describes in more detail the nature and scope of responsibilities

of the Nominating & Corporate Governance Committee.

(Chair) and John Argen.

Nominating & Corporate Governance Committee operates pursuant to a written charter adopted by the board of directors, which is available

on our website at www.dtst.com .

The charter describes in more detail the nature and scope of responsibilities of the Nominating

& Corporate Governance Committee.

The Company does not have a formal diversity policy.

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The Merger and Acquisition Committee members are Lawrence

Maglione, Jr.(Chair), John Argen, Todd A.

Maglione, Jr.

(Chair), John Argen, and Todd A.

Cyber Security & Risk Committee

The Company has a cyber security & risk committee

(the “Cyber Security & Risk Committee”) consisting of non-executive directors.

The Cyber Security & Risk Committee

members are Matthew Grover (Chair), and Uwayne A.

Family Relationships

One full-time employee is the son and direct report

to John Camello, President of Nexxis Inc.

Code of Ethics

The Company has adopted a Code of Ethics applicable

to its Directors, Officers and Employees.

A copy of our Code of Ethics is available on our website at www.dtst.com .

One full-time employee is the son and directly

reports to John Camello, President of Nexxis Inc.

Company has adopted a Code of Ethics and Conduct applicable to its Directors, Officers, and Employees.

A copy of our Code of Ethics

and Conduct is available on our website at www.dtst.com .

In addition, we intend to post on our website all disclosures

that are required by law or the Nasdaq Capital Market rules concerning any amendments to, or waivers from, any provision of the

Code of Ethics and Conduct.

The reference to our website address does not constitute incorporation by reference of the information

contained at or available through our website, and you should not consider it to be a part of this Annual Report.

Stockholder Communications

Stockholders who are interested

in communicating directly with members of the Board, or the Board as a group, may do so by writing directly to the individual Board member

c/o Secretary, Data Storage Corporation, 48 South Service Road, Melville, New York 11747.

The Company’s Secretary will forward communications

directly to the appropriate Board member.

If the correspondence is not addressed to the particular member, the communication will be forwarded

to a Board member to bring to the attention of the Board.

The Company’s Secretary will review all communications before forwarding

them to the appropriate Board member.

Stockholders who are interested in communicating directly with members of the Board, or the Board as a group,

may do so by writing directly to the individual Board member c/o Secretary, Data Storage Corporation, 48 South Service Road, Melville,

New York 11747.

The Company’s Secretary will forward communications directly to the appropriate Board member.

If the correspondence

is not addressed to the particular member, the communication will be forwarded to a Board member to bring to the attention of the

The Company’s Secretary will review all communications before forwarding them to the appropriate Board member.

with Section 16(a) of the Exchange Act

Section 16(a) of the

Securities Exchange Act requires that our directors and executive officers and persons who beneficially own more than 10% of our

common stock (referred to herein as the “reporting persons”) file with the SEC various reports as to their ownership

of and activities relating to our common stock.

Such reporting persons are required by the SEC regulations to furnish us with copies

of all Section 16(a) reports they file.

Based solely on our review of copies of the reports filed with the SEC and the written

representations of our directors and executive officers, we believe that the following reports were untimely:

Form 4 filed by each

of Todd Correll, Lawrence Maglione, John Argen, Joseph Hoffman and Matthew Grover on April 25, 2023, Form 4 filed by each of Todd

Correll, Lawrence Maglione, John Argen, Joseph Hoffman and Matthew Grover on April 27, 2023, Form 4 filed by each of Todd Correll,

Lawrence Maglione, John Argen, and Matthew Grover on July 5, 2023, Form 4 filed by each of Todd Correll, Lawrence Maglione, John

Argen, Joseph Hoffman and Matthew Grover on October 11, 2023, Form 4 filed by John Argen on January 3, 2024, and Form 4 filed by

each of Thomas Kempster, Charles Piluso, Harold Schwartz and Christos Panagiotakos on March 5, 2024.

EXECUTIVE COMPENSATION

6 unchanged sentences

Incentive Plan

Piluso, Chief Executive Officer,

Treasurer and Chairman of the Board

Panagiotakos,

Chief Financial Officer

Piluso, Chief Executive Officer, Treasurer and Chairman of the Board

Schwartz, President

Kempster, Executive Vice President, Strategic Development

Wyllie – Executive Vice President

Company follows the requirements

of FASB ASC 718-10-10, Share-Based

Payments with

regards to stock-based compensation

issued to employees and non-employees.

Please see Note 2 to

Consolidated Financial Statements

above for more information

valuation methodology used

to determine the fair value

of the options issued during

the year is the Black-Scholes

option-pricing model.

see Note 2 to Consolidated

Financial Statements above

for more information.

Employment Agreements

2 unchanged sentences

On March 28, 2023, the Company entered into an employment

agreement (the “Piluso Employment Agreement”) with Mr.

Piluso, the Company’s Chief Executive Officer.

Piluso Employment Agreement is for an initial term of three years, and it will be automatically renewed for consecutive one-year terms

at the end of the initial term.

agreement, as amended (the “Piluso Employment Agreement”) with Mr.

Piluso, the Company’s Chief Executive

The Piluso Employment Agreement is for an initial term of three years, and it will be automatically renewed for consecutive one-year

terms at the end of the initial term.

The Piluso Employment Agreement may be terminated with or without cause.

Piluso will receive an annual

base salary of $225,000 in 2023, $235,000 in 2024 and $260,000 in 2025 and shall be eligible to earn a performance bonus ranging from

$75,000 to $300,000.

Piluso shall also be entitled to an equity award for a total value of $100,000 per annum, which shall be equally

split between RSUs and stock options, as well as 75,000 performance share units.

Piluso will receive

an annual base salary of $225,000 in 2023, $250,000 in 2024 and $250,000 in 2025 and shall be eligible to earn a performance bonus ranging

from $75,000 to $300,000.

Piluso shall also be entitled to an equity award for a total value of $100,000 per annum, which shall be

equally split between RSUs and stock options, as well as 75,000 performance share units.

Upon termination of Mr.

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On March 28, 2023, the Company entered into an employment

agreement (the “Panagiotakos Employment Agreement”) with Mr.

Panagiotakos, the Company’s Chief Financial Officer.

The Panagiotakos Employment Agreement is for an initial term of three years, and it will be automatically renewed for consecutive one-year

terms at the end of the initial term.

agreement, as amended (the “Panagiotakos Employment Agreement”) with Mr.

Panagiotakos, the Company’s Chief

Financial Officer.

The Panagiotakos Employment Agreement is for an initial term of three years, and it will be automatically renewed for

consecutive one-year terms at the end of the initial term.

The Panagiotakos Employment Agreement may be terminated with or without cause.

will receive an annual base salary of $215,000 in 2023, $225,000 in 2024 and $242,500 in 2025 and shall be eligible to earn a performance

bonus of 25% of his base salary.

Panagiotakos shall also be entitled to an equity award for a total value equal to 25% of his base

salary per annum, which shall be equally split between RSUs and stock options, a financial achievement bonus of $45,000 and a long-term

incentive bonus of stock options and RSUs equal to 25% of his base salary.

Panagiotakos will receive an annual base salary of $215,000 in 2023, $235,000 in 2024 and $235,000 in 2025 and shall be eligible to

earn a performance bonus of 25% of his base salary.

Panagiotakos shall also be entitled to an equity award for a total value equal

to 25% of his base salary per annum, which shall be equally split between RSUs and stock options, a financial achievement bonus of $45,000

and a long-term incentive bonus of stock options and RSUs equal to 25% of his base salary.

Upon termination of Mr.

10 unchanged sentences

will be eligible to participate in the Company’s benefit programs.

Other Employment Arrangements

The Company does not have formal employment

agreements with Harold J.

Schwartz or Thomas C.

Their current and past salaries have been determined by the Compensation

Committee and are re-evaluated on a yearly basis.

Schwartz’s annual base salary for the fiscal year ended December 31,

2022 was $171,717, which was increased to $215,000 for the fiscal year ended December 31, 2023.

Kempster’s annual base

salary for the fiscal year ended December 31, 2022 was $174,808, which was increased to $215,000 for the fiscal year ended December

Schwartz and Mr.

Kempster are eligible to earn RSUs and stock options, in addition to a cash bonus which is determined

by the compensation committee.

2010 Incentive Award Plan

On August 12, 2010, the Company adopted the Data Storage

Corporation 2010 Incentive Award Plan (the “2010 Plan”) that provided for 2,000,000 shares of common stock reserved for issuance

under the terms of the 2010 Plan;

which was amended on September 25, 2013, to increase the number of shares of common stock reserved for

issuance under the Plan to 5,000,000 shares of common stock;

which was further amended on June 20, 2017 to increase the number of shares

On August 12, 2010, the Company adopted the

Data Storage Corporation 2010 Incentive Award Plan (the “2010 Plan”) that provided for 2,000,000 shares of common stock

reserved for issuance under the terms of the 2010 Plan;

which was amended on September 25, 2013, to increase the number of shares

of common stock reserved for issuance under the 2010 Plan to 5,000,000 shares of common stock;

and further amended on July 1, 2019, to increase

the number of shares of common stock reserved for issuance under the Plan to 10,000,000 shares of common stock.

On April 23, 2012, the

Company amended and restated the 2010 Plan to change the name to the “Amended and Restated Data Storage Corporation Incentive Award

Plan” (the “Plan”).

The Plan was intended to promote the interests of the Company by attracting and retaining exceptional

employees, consultants, directors, officers and independent contractors (collectively referred to as the “Participants”) and

enabling such Participants to participate in the long-term growth and financial success of the Company.

Under the Plan, the Company had

the right to grant stock options, which are intended to qualify as “incentive stock options” under Section 422 of the Internal

Revenue Code of 1986, as amended, non-qualified stock options, stock appreciation rights and restricted stock awards, which were restricted

shares of common stock (collectively referred to as “Incentive Awards”).

Incentive Awards were granted pursuant to the Plan

for 10 years from the Effective Date.

which was further amended on June

20, 2017 to increase the number of shares of common stock reserved for issuance under the 2010 Plan to 8,000,000 shares of common

and further amended on July 1, 2019, to increase the number of shares of common stock reserved for issuance under the 2010

Plan to 10,000,000 shares of common stock.

On April 23, 2012, the Company amended and restated the 2010 Plan to change the name

to the “Amended and Restated Data Storage Corporation Incentive Award Plan”.

The 2010 Plan was intended to promote

the interests of the Company by attracting and retaining exceptional employees, consultants, directors, officers and independent

contractors (collectively referred to as the “Participants”) and enabling such Participants to participate in the long-term

growth and financial success of the Company.

Under the 2010 Plan, the Company had the right to grant stock options, which are intended

to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended, non-qualified

stock options, stock appreciation rights and restricted stock awards, which were restricted shares of common stock (collectively

referred to as “Incentive Awards”).

Incentive Awards were granted pursuant to the 2010 Plan for 10 years from the Effective

There are 123,563 options outstanding under the 2010 Plan as of December 31, 2023.

The 2010 Plan expired

on October 21, 2020, and accordingly, there are no shares available for future grants.

The 2010 Plan expired on October 21, 2020,

and accordingly, there are no shares available for future grants.

On March 8, 2021, our Board and stockholders owning

6 unchanged sentences

An aggregate of

15,000,000 shares of our common stock may be issued under the 2021 Plan, subject to equitable adjustment in the event of future stock

splits, and other capital changes.

Outstanding Equity Awards

at Fiscal Year-End December 31, 2022

15,000,000 shares of our common stock may be issued under the 2021 Plan, subject to equitable adjustment in the event of future

stock splits, and other capital changes.

Outstanding Equity

Awards at Fiscal Year-End December 31, 2023

Option Awards

Option Or RSU Approval

Number of Securities Underlying Unexercised Options (#)

Number of Securities Underlying Unexercised Options

Option Exercise Price

Option Expiration

Number Of Shares Or Units Of Stock That Have Not Vested

Market Value Of Shares Or Units Of Stock That Have Not Vested

Unexercisable

Vested options under the

Unvested options under

On March 23, 2011 (the

“Stock Grant Date”), Mr.

Piluso was issued a stock grant of 14,286 shares of common stock at $0.35 per share (the “Stock

Piluso received the Stock Grant in lieu of his annual compensation for 2010.

The Stock Grant was fully vested

on the Stock Grant Date.

The Stock Grant was issued to Mr.

Piluso pursuant to the 2008 Plan.

On June 18, 2012, the Stock Grant issuance

was rescinded and replaced with a stock option to acquire 13,720 shares of common stock at an exercise price of $15.60 per share.

In addition, on June 18, 2012, Mr.

Piluso received a stock option to acquire 8,929 shares of common stock at an exercise price of

$15.60 per share.

The stock options were

issued in consideration for services provided as a member of the Board.

The stock options were

issued in consideration for services provided as a member of the Board of Advisors.

These option awards vested

100% three months from the grant date.

These option awards vested/vest

33.33% on each of the one- year, two- year and three- year anniversary following the grant date.

Represents restricted stock units which vest 33.33% on each of the one- year, two- year and three- year anniversary

following the grant date.

Calculated by multiplying the closing price per share of the company’s common stock on December 29,

2023, $2.88 by the number of shares.

The stock options were issued in consideration for services provided as a member of the Board.

These option awards vested/vest 33.33% on each of the one- year, two- year and three- year anniversary following the grant date.

Clawback Policy

The Board has adopted

a clawback policy which allows us to recover performance-based compensation, whether cash or equity, from a current or former executive

officer in the event of an Accounting Restatement.

The clawback policy defines an Accounting Restatement as an accounting restatement

of our financial statements due to our material noncompliance with any financial reporting requirement under the securities laws.

Under such policy, we may recoup incentive-based compensation previously received by an executive officer that exceeds the amount

of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts in

the Accounting Restatement.

The Board has the

sole discretion to determine the form and timing of the recovery, which may include repayment, forfeiture and/or an adjustment

to future performance-based compensation payouts or awards.

The remedies under the clawback policy are in addition to, and not

in lieu of, any legal and equitable claims available to the Company.

The clawback policy is annexed to this Annual Report as an

Compensation of Directors

The following summary compensation table sets forth

all compensation awarded to, earned by, or paid to the Company’s directors during the fiscal year ended December 31, 2022.

the year ended December 31, 2022, no compensation was paid to any Company director.

The following summary compensation table sets

forth all compensation awarded to, earned by, or paid to the Company’s non-employee directors during the fiscal year ended

December 31, 2023.

Director Name

1 unchanged sentence

Matthew Grover

The table below shows the aggregate number of option awards

outstanding at fiscal year-end for each of our current non-employee directors and former non-employee directors who served as directors

during the year ended December 31, 2022.

below shows the aggregate number of option awards outstanding at fiscal year-end for each of our current non-employee directors

and former non-employee directors who served as directors during the year ended December 31, 2023.

cash compensation for Mr.

Hoffman was paid to Kelley Drye & Warren as

Hoffman’s partnership agreement.

Hoffman ceased being

a director on December 30, 2023, upon his death.

Company follows the requirements of

FASB ASC 718-10-10, Share-Based Payments with

regard to stock-based compensation issued to employees and non-employees.

Please see Note 2 to Consolidated Financial Statements above for

more information.

valuation methodology used to determine the fair value of the options issued

during the year is the Black-Scholes option-pricing model.

Please see Note

2 to Consolidated Financial Statements above for more information.

The table below shows

the aggregate number of option awards outstanding at fiscal year-end of our non-employee directors.

Number of Shares Subject to

Outstanding Options as of December 31, 2023

Number of Shares Subject to

Outstanding Unvested RSU as of December 31, 2023

Matthew Grover

Maglione, Jr.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The following

table sets forth certain information, as of March 30, 2023, with respect to the beneficial ownership of the outstanding common stock by

(i) any holder of more than five (5%) percent;

(ii) each of the Company’s executive officers and directors;

and (iii) the Company’s

directors and executive officers as a group.

Except as otherwise indicated, each of the stockholders listed below has sole voting and

investment power over the shares beneficially owned.

Except as otherwise indicated, each of the stockholders listed below has sole

voting and investment power over the shares beneficially owned.

The address for each person is 48 South Service Road, Suite 203, Melville,

New York 11747.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information, as of March 27, 2024, with

respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five (5%) percent;

(ii) each of the

Company’s named executive officers and directors;

and (iii) the Company’s directors and current executive officers as a group.

The information in the table below is based upon 6,919,950 shares of common stock outstanding as of March 27, 2024.

Except as otherwise

indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned.

Unless otherwise

indicated, the address for each person is c/o Data Storage Corporation, 48 South Service Road, Suite 203, Melville, New York 11747.

Name of Beneficial Owner

5 unchanged sentences

Matthew Grover (7)

All Executive Officers and Directors as a group (9 persons)

The securities “beneficially

owned” by a person are determined in accordance with the definition of “beneficial ownership” set forth in the

regulations of the SEC and accordingly, may include securities owned by or for, among others, the spouse, children or certain other

relatives of such person, as well as other securities over which the person has or shares voting or investment power or securities

which the person has the right to acquire within 60 days.

Includes 882,627 shares of common stock, 6,670 shares of common stock underlying stock options, and 1,667 shares of common stock underlying stock warrants.

Includes 815,876 shares of common stock and 5,420 shares of common stock

underlying stock options.

Includes 798,376

shares of common stock and 4,169 shares of common stock underlying stock options.

Includes 830 shares of

common stock and 7,500 shares of common stock underlying stock options and 2,500 RSUs

Includes 3,334 shares of

common stock and 4,166 shares of common stock underlying stock options and 2,500 RSUs

Includes 7,500 shares of

common stock underlying stock options and 2,500 RSUs

Includes 1,458 shares of

common stock underlying stock options and 2,500 RSUs

625 shares of common stock, 1,458 shares of common stock underlying stock options and 2,500 RSUs

Securities Authorized for Issuance Under Equity Compensation Plans

Clifford Stein

All Current Executive Officers and Directors as a group (11 persons)

The securities “beneficially owned” by a person are determined in accordance with the definition of “beneficial ownership” set forth in the regulations of the SEC and accordingly, may include securities owned by or for, among others, the spouse, children, or certain other relatives of such person, as well as other securities over which the person has or shares voting or investment power or securities which the person has the right to acquire within 60 days.

Includes 359,865 shares of common stock owned directly by Mr.

Piluso, and 21,722 shares of common stock underlying

stock options that are exercisable within 60 days of March 27, 2024.

Also includes:

(i) 81,750 shares of common stock owned by

Piluso Family Associates;

(ii) 230,116 shares of common stock owned by The Lasata 2012 Trust dated 5/4/12 (the “Lasata Trust”);

(iii) 230,116 shares of common stock owned by The Bella Vita 2012 Trust dated 5/4/12 (the “Bella Vita Trust”).

Panzarella-Piluso, Mr.

Piluso’s wife, is the beneficiary of the Lasata Trust and Joanne G.

Panzarella-Piluso, Mr.

wife, and Lawrence Maglione are the co-trustees thereof, with shared voting and disposition power over the shares held by the Lasata

Piluso is the beneficiary of the Bella Vita Trust and Mr.

Piluso and Mrs.

Panzarella-Piluso, his wife, are the co-trustees

thereof, with shared voting and disposition power over the shares held by the Bella Vita Trust.

The address for the Lasata Trust

and the Bella Vita Trust is c/o Data Storage Corporation, 48 South Service Road, Suite 203, Melville, New York 11747.

Includes 820,778 shares of common stock, 15,737 shares of common stock underlying stock options that are exercisable

within 60 days of March 27, 2024, and 8,333 RSUs that will vest within 60 days of March 27, 2024.

Includes 803,278 shares of common stock, 15,737 shares of common stock underlying stock options that are exercisable

within 60 days of March 27, 2024, and 8,333 RSUs that will vest within 60 days of March 27, 2024.

Includes 10,830 shares of common stock, 10,834 shares of common stock underlying stock options that are exercisable

within 60 days of March 27, 2024, and 2,500 RSUs that will vest within 60 days of March 27, 2024.

Includes 14,292 shares of common stock, 6,666 shares of common stock underlying stock options that are exercisable

within 60 days of March 27, 2024 and 2,500 RSUs that will vest within 60 days of March 27, 2024 .

Includes 10,000 shares of common stock, 5,625 shares of common stock underlying stock options that are exercisable

within 60 days of March 27, 2024 and 2,500 RSUs that have vested or will vest within 60 days of March 27, 2024.

Includes 10,625 shares of common stock, 5,625 shares of common stock underlying stock options that are exercisable

within 60 days of March 27, 2024 and 2,500 RSUs that will vest within 60 days of March 27, 2024.

Securities Authorized

for Issuance Under Equity Compensation Plans

As of December 31, 2023, we had awards outstanding

4 unchanged sentences

future issuance

plans (excluding

Plan Category

compensation plans approved by security holders

compensation plans not approved by stockholders

the year ended December 31, 2022, we had awards outstanding under the 2010 Plan.

As of the end of fiscal year 2022, we had 185,309

shares of our common stock issuable upon the exercise of outstanding options granted pursuant to the 2010 Plan.

The securities available

under the Plan for issuance and issuable pursuant to exercises of outstanding options may be adjusted in the event of a change in

outstanding stock by reason of stock dividend, stock splits, reverse stock splits, etc.

As of end of fiscal year 2022, there were

warrants outstanding to purchase 3,333 shares of common stock at a weighted average exercise price of $0.40, none of which were granted

pursuant to the 2008 Plan or the 2010 Plan.

The 2010 Plan expired on October 21, 2020.

8, 2021, our Board and stockholders owning in excess of majority of our outstanding voting securities approved and adopted

the 2021 Stock Incentive Plan (the “2021 Plan”).

Pursuant to the terms of the 2021 Plan we can grant stock options, restricted

stock unit awards, and other awards at levels determined appropriate by our Board and/or compensation committee.

The 2021 Plan also

allows us to utilize a broad array of equity incentives and performance cash incentives in order to secure and retain the services

of our employees, directors and consultants, and to provide long-term incentives that align the interests of our employees, directors,

and consultants with the interests of our stockholders.

An aggregate of 375,000 shares of our common stock may be issued under the

2021 Plan, subject to equitable adjustment in the event of future stock splits, and other capital changes.

Equity compensation plans approved by security holders

Equity compensation plans not approved by stockholders

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

The Board of Directors has determined, after considering

all the relevant facts and circumstances, that during the fiscal year ended December 31, 2022, each of Messrs.

Argen, Hoffman, Correll,

Maglione, and Grover were independent directors, as that term is defined in the federal securities laws and the Nasdaq Marketplace Rules.

Pursuant to our charter, our Audit Committee shall

review on an on-going basis for potential conflicts of interest, and approve if appropriate, all our “Related Party Transactions”.

Except as disclosed under “Executive Compensation,”

and below there were no related party transactions during the two years ended December 31, 2023, or the current year.

On April 1, 2018, the Company entered into an equipment

3 unchanged sentences

Director, serves as the Chief Executive Officer and President (“Systems Trading”) to refinance all leases into one lease.

This lease obligation is payable to Systems Trading with bi-monthly installments of $23,475.

The lease carries an interest rate of 5%

This lease obligation was payable to Systems Trading with bi-monthly installments of $23,475.

The lease carried an interest rate of 5%

and is a four-year lease.

The term of the lease ends April 16, 2022.

The term of the lease ended April 16, 2022.

Systems Trading is owned and operated by the Company’s President,

2 unchanged sentences

agreement with Systems Trading.

This lease obligation is payable to Systems Trading with monthly installments of $29,592.

The lease carries

an interest rate of 6.75% and is a five-year lease.

The term of the lease ends December 31, 2023.

This lease obligation was payable to Systems Trading with monthly installments of $29,592.

The lease carried

an interest rate of 6.75% and was a five-year lease.

The term of the lease ended December 31, 2023.

On April 1, 2019, the Company entered into two equipment

lease agreements with Systems Trading to add new data center equipment.

The first lease calls for monthly payments of $1,328 and expires

The first lease calls for monthly payments of $1,328 and expired

on March 1, 2022.

It carries an interest rate of 7%.

The second lease calls for monthly payments of $461 and expires on March 1, 2022.

It carries an interest rate of 6.7%.

It carried an interest rate of 7%.

The second lease calls for monthly payments of $461 and expired on March 1, 2022.

It carried an interest rate of 6.7%.

On January 1, 2020, the Company entered into a new

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to lease equipment.

The lease obligation is payable to Systems Trading with monthly

The lease obligation was payable to Systems Trading with monthly

installments of $10,534.

The lease carries an interest rate of 6% and is a three-year lease.

The term of the lease ends January 1, 2023.

On March 4, 2021, the Company entered into a new equipment

lease agreement with Systems Trading effective April 1, 2021.

This lease obligation is payable to Systems Trading with monthly installments

of $1,566.82 and expires on March 31, 2024.

The lease carries an interest rate of 8%.

The lease carried an interest rate of 6% and is a three-year lease.

The term of the lease ended January 1, 2023.

On March 4, 2021, the Company entered into

a new equipment lease agreement with Systems Trading effective April 1, 2021.

This lease obligation was payable to Systems Trading

with monthly installments of $1,566.82 and will expire on March 31, 2024.

The lease carried an interest rate of 8%.

The Company received funds of $39,172 and $37,954

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Nexxis Capital LLC was formed to purchase equipment and provide equipment leases to the Company’s customers.

On January 1,

2022, the Company entered into a lease agreement with Systems Trading effective January 1, 2022.

This lease obligation is payable to Systems

Trading with monthly installments of $7,145 and expires on April 1, 2025.

On January 1, 2022, the Company entered into a lease

agreement with Systems Trading effective January 1, 2022.

This lease obligation is payable to Systems Trading with monthly installments

of $7,145 and expires on April 1, 2025.

The lease carries an interest rate of 8%.

2022, the Company entered into a lease agreement with Systems Trading effective May 1, 2022.

This lease obligation is payable to Systems

Trading with monthly installments of $6,667 and expires on February 1, 2025.

On April 1, 2022, the Company entered into a lease

agreement with Systems Trading effective May 1, 2022.

This lease obligation is payable to Systems Trading with monthly installments of

$6,667 and expires on February 1, 2025.

The lease carries an interest rate of 8%.

Except as disclosed herein and under the section titled

“Executive Compensation,” there were no related party transactions during the two years ended December 31, 2022, or the current

On December 11, 2019,

we issued to (i) each of Messrs.

Piluso, Schwartz and Kempster options to purchase 100,000 shares of common stock having an exercise price

of $.60 per share, vesting over three years on the one, two and three year anniversary of the grant date and terminating on December 10,

(ii) each of Messrs.

Kempster, Argen, Hoffman, and

Maglione options to purchase 100,000 shares of common stock having an exercise price of $.54 per share, vesting over three years on the

one, two and three year anniversary of the grant date and terminating on December 10, 2029;

and (iii) each of Messrs.

Correll and Grover

options to purchase 25,000 shares of common stock having an exercise price of $.54 per share, vesting over three years on the one, two

and three year anniversary of the grant date and terminating on December 10, 2029.

Director Independence

The Board of Directors

has determined, after considering all the relevant facts and circumstances, that each of Messrs.

Argen, Correll, Maglione, Stein,

Mitchell and Grover and Ms.

Stallone are independent directors, as that term is defined in the federal securities laws and the

Nasdaq Marketplace Rules.

See “Director Independence” in Part III, Item 10 –

Directors, Executive Officers and Corporate Governance.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

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fees including expenses billed to us for the years ended December 31, 2023, and 2022 by Rosenberg Rich Baker Berman & Company P.A.

Fees and Expenses (1)

Audit Fees (1)

Audit fees and expenses were for professional services rendered for the audit and reviews of the consolidated financial statements of the Company, professional services rendered for issuance of consents and assistance with review of documents filed with the SEC.

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services were rendered.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibits and Financial Statement Schedules

The following financial statements are included in this Annual Report for

the fiscal years ended December 31, 2022, and 2021:

Report of Independent Registered

Public Accounting Firm

Consolidated Balance Sheets

as of December 31, 2022, and 2021.

Consolidated Statements

of Operations for the years ended December 31, 2022, and 2021.

Consolidated Statements

of Cash Flows for the years ended December 31, 2022, and 2021.

Consolidated Statements

of Stockholders’ Equity for the years ended December 31, 2022, and 2021.

Notes to Consolidated Financial

All financial

statement schedules have been omitted as the required information is either inapplicable or included in the Consolidated Financial

Statements or related notes.

set forth in the accompanying exhibit index below are either filed as part of this report or are incorporated herein by reference:

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

The following financial statements are included in this Annual Report for the fiscal years ended December 31, 2023, and 2022:

Report of Independent Registered Public Accounting Firm.

Consolidated Balance Sheets as of December 31, 2023, and 2022.

Consolidated Statements of Operations for the years ended December 31, 2023, and 2022.

Consolidated Statements of Cash Flows for the years ended December 31, 2023, and 2022.

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, and 2022.

Notes to Consolidated Financial Statements.

All financial statement schedules have been omitted as the required information is either inapplicable or included in the Consolidated Financial Statements or related notes.

The exhibits set forth in the accompanying

exhibit index on the page preceding the signature page are either filed as part of this report or are incorporated herein by reference:

Form 10-K Summary

Not applicable.

EXHIBIT INDEX

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001-35384) filed on July 20, 2021).

Description of Securities

Asset Purchase Agreement by and between ABC Services Inc., and Data Storage Corporation as of October 25, 2016 (incorporated by reference to Exhibit 10.1 to Form 8K filed on October 31, 2016).

Description of Securities (incorporated by reference to Exhibit 4.10 to Annual Report on Form 10-K (File No.

001-35384) filed on March 31, 2023).

Asset Purchase Agreement by and between ABC Services Inc., and Data Storage Corporation as of October 25, 2016 (incorporated by reference to Exhibit 10.1 to Form 8K (File No.

001-35384) filed on October 31, 2016).

Asset Purchase Agreement by and between ABC Services II Inc., and Data Storage Corporation as of October 25, 2016 (incorporated by reference to Exhibit 10.2 to Form 8K (File No.

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Buyout Lease Agreement between Data Storage Corporation and Systems Trading, Inc.

dated March 15, 2018.

dated March 15, 2018 (incorporated by reference to Exhibit 10.6 to Form 10-K (File No.