Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
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.
A
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). Based on the
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.
ITEM 9B. 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.
Item 9C. Disclosure
Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable
38
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
The following table sets forth the names, ages, and
positions of the Company’s executive officers and directors. Executive officers are elected annually by its Board of Directors.
Each executive officer holds his office until he resigns, is removed by the Board, or his successor is elected and qualified. Each director
holds his office until his successor is elected and qualified or his earlier resignation or removal.
Name
Age
Position
Charles M. Piluso
70
Chairman of the Board, Chief Executive Officer
Chris H. Panagiotakos
51
Chief Financial Officer
Harold J. Schwartz
59
Director, President
Thomas C. Kempster
57
Director, Executive Vice President
John Argen
69
Director
Lawrence A. Maglione, Jr.
62
Director
Matthew
Grover
56
Director
Todd
A. Correll
56
Director
Clifford
Stein
66
Director
Nancy
M. Stallone
63
Director
Uwayne
A. Mitchell
40
Director
Charles M. Piluso, Chairman of the Board and, Chief Executive Officer
Mr. 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,
Mr. 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. Mr. 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. Past roles include Instructor Professor
at St. 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. Piluso’s technical expertise
and management experience in the technology and communications sectors make him qualified to serve as a member of our Board.
Chris H. Panagiotakos,
Chief Financial Officer
Mr. 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. Panagiotakos
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. Mr. 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.
39
Harold J. Schwartz, President and Director
Mr. 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. Mr. 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. Mr. 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.
Thomas C. Kempster,
Executive Vice President and Director
Mr. 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,
Mr. 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
With a tenure spanning since October 2008, Mr. Argen
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 at ITT and Metromedia for 15 years and served as VP of Engineering & Operations at DataNet, a Wilcox & Gibbs company,
for 2 years. 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. Mr. 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. 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
initiatives.
40
Lawrence A. Maglione, Jr., Director
Mr. 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
2007, Mr. 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,
Mr. Maglione held the roles of Chief Financial Officer and Executive Vice President, overseeing all finance, legal, and administration
functions. Mr. 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.
Todd A. Correll, Director
Mr. 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. Mr. 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. 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
Mr. 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. Mr. 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. Mr. Grover holds a BA in Economics from Stony Brook University and earned his MBA from
the University of Southern California.
We believe that Mr. Grover
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 operations experience, coupled with his strategic insight and commitment to excellence.
41
Clifford Stein, Director
Mr. 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. Mr. 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. Mr. Stein
previously served on our board of directors from June 2010 to November 2020.
We believe that Mr. Stein
is qualified to serve as a member of our Board because of his leadership and legal experience.
Nancy
M Stallone, Director
Ms. Stallone was appointed as Director on March
5, 2024. 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. Ms. 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. Ms. 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
Board. 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. Stallone
is qualified to serve as a member of our Board because of her accounting and business experience.
Uwayne A. Mitchell, Director
Mr.
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
(GEICO). 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.
Mr. Mitchell holds a Juris Doctor from St. John’s University School of Law.
We believe that Mr. Mitchell
is qualified to serve as a member of our Board because of his industry and legal experience.
42
Composition of our Board of Directors
Our Board of Directors currently consists of
ten members. 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.
Director Independence
With the exception of Charles
M. Piluso, Harold J. Schwartz and Thomas C. Kempster, our Board has determined that all of our present directors and our former directors
are independent, in accordance with the Listing Rules of the Nasdaq (the “Nasdaq Listing Rules”). Our Board has determined
that, under the Nasdaq Listing Rules, Charles M. Piluso, Harold J. Schwartz and Thomas C. Kempster are not independent directors because
they are employees of the Company or its subsidiaries.
Our Board has determined
that: 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. Correll, and
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), 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 meeting of our shareholders or until removed from office in accordance with our bylaws. Our
officers are appointed by our Board and hold office until removed by the Board.
Committees of the Board of
Directors
The Board of Directors has a standing Audit Committee,
Compensation Committee, and Nominating & Corporate Governance Committee.
Audit Committee
The Company has an Audit Committee consisting of non-executive
directors each of whom the Board has determined is an independent director pursuant to the Nasdaq Listing Rules. The Audit Committee members
are: John Argen (Chair), Matthew Grover and Nancy M. Stallone. The Board has determined that Nancy M. Stallone is an “Audit Committee
Financial Expert” as defined by SEC rules and regulations. The Audit Committee operates pursuant to a written charter adopted by
the Board, which is available on our website at www.dtst.com . The charter describes in more detail the nature and scope of responsibilities
of the Audit Committee.
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. The Compensation Committee members
are Todd A. 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 . The charter describes in more detail the nature and scope of responsibilities
of the Compensation Committee.
Nominating & Corporate Governance Committee
The Company has a Nominating & Corporate Governance
Committee consisting of non-executive directors, each of whom the Board has determined is an independent director pursuant to the Nasdaq
Listing Rules. The Nominating & Corporate Governance Committee members include Lawrence A. Maglione, Jr. (Chair) and John Argen. 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.
43
The Company does not have a formal diversity policy.
However, the Nominating & Corporate Governance Committee evaluates each individual in the context of the Board of Directors as a whole,
with the objective of recommending individuals that can best perpetuate the success of our business and represent stockholder interests
through the exercise of sound business judgment and diversity of experience in various areas. We believe our current directors possess
diverse professional experiences, skills, and backgrounds, in addition to, among other characteristics, high standards of personal and
professional ethics, proven records of success in their respective fields, and valuable knowledge of our business and industry.
Merger and Acquisition Committee
The Company has a merger and acquisition committee
(the “M&A Committee”) consisting of non-executive directors. The Merger and Acquisition Committee members are Lawrence
A. Maglione, Jr. (Chair), John Argen, and Todd A. Correll.
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. Mitchell.
Family Relationships
One full-time employee is the son and directly
reports to John Camello, President of Nexxis Inc.
Code
of Ethics
The
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
to the Board
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.
Compliance
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.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following summary compensation table sets forth
all compensation awarded to, earned by, or paid to the named executive officers paid by the Company during the fiscal years ended December
31, 2023, and December 31, 2022, in all capacities for the accounts of our executive officers, including the Chief Executive Officer.
Summary Compensation Table
Non-Equity
Name & Principal
Stock
Option
Incentive Plan
All Other
Position
Year
Salary
Bonus
Awards(1)
Awards(2)
Compensation
Compensation
Total
Charles M. Piluso, Chief Executive Officer, Treasurer and Chairman of the Board
2023
$ 225,000
$ 175,000
$ 97,834
$ 88,670
$ 586,504
2022
$ 171,717
$ 150,000
$ 321,717
Harold J. Schwartz, President
2023
$ 215,000
$ 150,000
$ 71,177
$ 62,811
$ 4,607
$ 503,595
2022
$ 171,717
$ 150,000
$ 321,717
Thomas C. Kempster, Executive Vice President, Strategic Development
2023
$ 215,000
$ 100,000
$ 71,177
$ 62,811
$ 7,200
$ 456,188
2022
$ 174,808
$ 25,000
$ 199,808
(1)
The
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
(2)
The
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.
44
Employment Agreements
Executive Employment Agreements
Mr. Piluso Employment Agreement
On March 28, 2023, the Company entered into an employment
agreement, as amended (the “Piluso Employment Agreement”) with Mr. Charles M. Piluso, the Company’s Chief Executive
Officer. 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. Mr. 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. Mr. 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. Piluso without cause, or as
a result of Mr. Piluso’s resignation for Good Reason (as such term is defined in the Piluso Employment Agreement) the Company shall
pay or provide to Mr. Piluso severance pay equal to his base salary for the remainder of the employment term and all stock options or
other similar equity compensation granted by the Company and then held by Mr. Piluso shall be accelerated and become fully vested and
exercisable as of the date of Mr. Piluso’s termination.
As a full-time employee of the Company, Mr. Piluso
will be eligible to participate in the Company’s benefit programs.
Mr. Panagiotakos Employment Agreement
On March 28, 2023, the Company entered into an employment
agreement, as amended (the “Panagiotakos Employment Agreement”) with Mr. Chris H. 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.
Mr. 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. Mr. 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. Panagiotakos without cause,
or as a result of Mr. Panagiotakos’ resignation for Good Reason (as such term is defined in the Panagiotakos Employment Agreement)
the Company shall pay or provide to Mr. Panagiotakos severance pay equal to his base salary for the remainder of the employment term and
all stock options or other similar equity compensation granted by the Company and then held by Mr. Panagiotakos shall be accelerated and
become fully vested and exercisable as of the date of Mr. Panagiotakos’ termination.
As a full-time employee of the Company, Mr. Panagiotakos
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. Kempster. Their current and past salaries have been determined by the Compensation
Committee and are re-evaluated on a yearly basis. Mr. 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. Mr. 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
31, 2023. Mr. 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 2010 Plan to 5,000,000 shares of common stock; 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
stock; 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
Date. 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.
45
On March 8, 2021, our Board and stockholders owning
in excess of 50% 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
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
Stock 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
Name
Date
Exercisable
Unexercisable
($)
Date
(#)(1)
($)(2)
Charles M. Piluso
(3)(4)
12/11/2019
2,500
$ 2.40
12/10/2024
(3)(4)
03/01/2023
29,412
$ 1.96
02/28/2028
(3)(4)
03/28/2023
28,429
$ 1.77
03/27/2028
03/1/2023
29,412
$ 84,707
03/28/2023
28,249
$ 81,357
Harold J. Schwartz
(3)(4)
12/22/2015
834
0
$ 14.00
12/21/2025
(3)(4)
12/11/2019
2,500
0
$ 2.40
12/10/2024
(3)(4)
03/01/2023
14,706
$ 1.96
02/28/2028
(3)(4)
04/10/2023
25,000
$ 2.00
04/10/2028
03/1/2023
14,706
$ 42,353
03/28/2023
25,000
$ 72,000
Thomas C. Kempster
(3)(4)
12/11/2019
2,500
$ 2.40
12/10/2024
(3)(4)
03/01/2023
14,706
$ 1.96
02/28/2028
(3)(4)
04/10/2023
25,000
$ 2.00
04/10/2028
03/1/2023
14,706
$ 42,353
03/28/2023
25,000
$ 72,000
(1)
Represents restricted stock units which vest 33.33% on each of the one- year, two- year and three- year anniversary
following the grant date.
(2)
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.
(3)
The stock options were issued in consideration for services provided as a member of the Board.
(4)
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
exhibit.
46
Compensation of Directors
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
Fees earned
or paid in
cash
Stock
awards(3)
Option
awards
(1)(4)(5)
Non-equity
incentive
plan
Non-
qualified
deferred
compensation
earnings
All other
compensation
Total
Lawrence A. Maglione, Jr.
$ 6,000
$ 25,663
$ 25,633
$ 57,296
John Argen
$ 6,000
$ 25,663
$ 25,633
$ 57,296
Joseph B. Hoffman(2)
$ 6,000
$ 18,475
$ 18,445
$ 42,920
Matthew Grover
$ 6,000
$ 25,663
$ 25,633
$ 57,296
Todd A. Correll
$ 6,000
$ 25,663
$ 25,633
$ 57,296
(1)
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, 2023.
(2)
All
cash compensation for Mr. Hoffman was paid to Kelley Drye & Warren as
part of Mr. Hoffman’s partnership agreement. Mr. Hoffman ceased being
a director on December 30, 2023, upon his death.
(3)
The
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.
(4)
The
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.
(5)
The table below shows
the aggregate number of option awards outstanding at fiscal year-end of our non-employee directors.
Name
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
John Argen
21,668
10,000
Todd A. Correll
20,627
10,000
Matthew Grover
20,627
10,000
Joseph B. Hoffman
23,336
—
Lawrence A. Maglione, Jr.
25,836
10,000
47
ITEM
12. 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
Shares Beneficially Owned (1)
Percentage Ownership
Charles M. Piluso and affiliated entities (2)
923,569
13.32
%
Harold J. Schwartz (3)
844,848
12.19
%
Thomas C. Kempster (4)
827,348
11.94
%
Lawrence A. Maglione, Jr. (5)
24,164
*
John Argen (6)
23,458
*
Matthew Grover (7)
18,125
*
Todd A. Correll (8)
18,750
*
Clifford Stein
267,935
3.88
%
Nancy M. Stallone
—
*
Uwayne A. Mitchell
—
*
All Current Executive Officers and Directors as a group (11 persons)
2,969,130
42.17
%
*
Less than 1%
(1)
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.
(2)
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”). Mrs.
Panzarella-Piluso, Mr. Piluso’s wife, is the beneficiary of the Lasata Trust and Joanne G. Panzarella-Piluso, Mr. Piluso’s
wife, and Lawrence Maglione are the co-trustees thereof, with shared voting and disposition power over the shares held by the Lasata
Trust. Mr. 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.
(3)
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.
(4)
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.
(5)
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.
(6)
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 .
(7)
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.
(8)
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.
48
Securities Authorized
for Issuance Under Equity Compensation Plans
As of December 31, 2023, we had awards outstanding
under our Amended and Restated Data Storage Corporation Incentive Award Plan:
Number of
securities to be
issued upon
exercise of
outstanding
options and
warrants
Weighted-
average
exercise price of
outstanding
options,
warrants and
rights
Number of
securities
remaining
available for
future issuance
under
equity
compensation
plans (excluding
securities
reflected
in
column (a)
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security holders
2010 Plan
129,152
$
3.41
—
2021 Plan
466,195
$
2.25
479,653
Equity compensation plans not approved by stockholders
N/A
N/A
N/A
Total
595,347
$
2.48
479,65 3
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
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.
49
On April 1, 2018, the Company entered into an equipment
lease agreement with Systems Trading Inc. (“Systems Trading”), a company for which Mr. Harold J. Schwartz, our President and
Director, serves as the Chief Executive Officer and President (“Systems Trading”) to refinance all leases into one lease.
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 ended April 16, 2022. Systems Trading is owned and operated by the Company’s President,
Harold Schwartz.
On January 1, 2019, the Company entered into an equipment
agreement with Systems Trading. 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 expired
on March 1, 2022. 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
equipment lease agreement with Systems Trading Inc. to lease equipment. The lease obligation was payable to Systems Trading with monthly
installments of $10,534. 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
during the years ended December 31, 2023, and 2022, respectively from Nexxis Capital LLC, a company owned by Charles Piluso and Harold
Schwartz. 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. The lease carries an interest rate of 8%.
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%.
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.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The following table sets forth the aggregate audit-related
fees including expenses billed to us for the years ended December 31, 2023, and 2022 by Rosenberg Rich Baker Berman & Company P.A.
December 31,
December 31,
2023
2022
Audit Fees (1)
$ 134,500
$ 146,750
Tax 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.
50
The Audit Committee has adopted procedures for pre-approving
all audit and non-audit services provided by the independent registered public accounting firm, including the fees and terms of such services.
These procedures include reviewing detailed back-up documentation for audit and permitted non-audit services. The documentation includes
a description of, and a budgeted amount for, particular categories of non-audit services that are recurring in nature and therefore anticipated
at the time that the budget is submitted. Audit Committee approval is required to exceed the pre-approved amount for a particular category
of non-audit services and to engage the independent registered public accounting firm for any non-audit services not included in those
pre-approved amounts. For both types of pre-approval, the Audit Committee considers whether such services are consistent with the rules
on auditor independence promulgated by the SEC and the PCAOB. The Audit Committee also considers whether the independent registered public
accounting firm is best positioned to provide the most effective and efficient service, based on such reasons as the auditor’s familiarity
with our business, people, culture, accounting systems, risk profile, and whether the services enhance our ability to manage or control
risks, and improve audit quality. The Audit Committee may form and delegate pre-approval authority to subcommittees consisting of one
or more members of the Audit Committee, and such subcommittees must report any pre-approval decisions to the Audit Committee at its next
scheduled meeting. All of the services provided by the independent registered public accounting firm were pre-approved by the Audit Committee.
Our audit committee pre-approves all services provided
by our independent auditors. All of the above services and fees were reviewed and approved by the entire audit committee before the respective
services were rendered.
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.
(a)(1)
The following financial statements are included in this Annual Report for the fiscal years ended December 31, 2023, and 2022:
1.
Report of Independent Registered Public Accounting Firm.
2.
Consolidated Balance Sheets as of December 31, 2023, and 2022.
3.
Consolidated Statements of Operations for the years ended December 31, 2023, and 2022.
4.
Consolidated Statements of Cash Flows for the years ended December 31, 2023, and 2022.
5.
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, and 2022.
6.
Notes to Consolidated Financial Statements.
(a)(2)
All financial statement schedules have been omitted as the required information is either inapplicable or included in the Consolidated Financial Statements or related notes.
(a)(3)
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:
Item
16. Form 10-K Summary
Not applicable.
51
EXHIBIT INDEX
Exhibit
No.
Description
3.1
Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form SB-2 (File No. 333-148167) filed on December 19, 2007).
3.2
Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K (File No. 333-148167) filed on October 24, 2008).
3.3
Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 on Form 8-K (File No. 333-148167) filed on January 9, 2009).
3.4
Bylaws (incorporated by reference to Exhibit 3.2 to the to the Registrant’s Registration Statement on Form SB-2 (File No. 333-148167) filed on December 19, 2007).
3.5
Amended Bylaws (incorporated by reference to Exhibit 3.2 to Form 8-K (File No. 333-148167) filed on October 24, 2008).
3.6
Form of Certificate of Amendment to the Articles of Incorporation (incorporated by reference to Appendix A to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.7
Form of Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated October 7, 2008 (incorporated by reference to Appendix C to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.8
Form of Certificate of Validation and Ratification of the Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated October 7, 2008 (incorporated by reference to Appendix C to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.9
Form of Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated October 16, 2008 (incorporated by reference to Appendix D to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.10
Form of Certificate of Validation and Ratification of the Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated October 16, 2008 (incorporated by reference to Appendix D to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.11
Form of Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated January 6, 2009 (incorporated by reference to Appendix E to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.12
Form of Certificate of Validation and Ratification of the Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated January 6, 2009 (incorporated by reference to Appendix E to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
52
3.13
Form of Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated June 24, 2009 (incorporated by reference to Appendix F to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.14
Form of Certificate of Validation and Ratification of the Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation dated June 24, 2009 (incorporated by reference to Appendix F to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
3.15
Certificate of Designations, Preferences and Rights of Series A Preferred Stock of Data Storage Corporation (incorporated by reference to Appendix F to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
4.1
Share Exchange Agreement, dated October 20, 2008, by and among Euro Trend Inc., Data Storage Corporation and the shareholders of Data Storage Corporation named on the signature page thereto (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 333-148167) filed on October 24, 2008).
4.2
Share Exchange Agreement, dated October 20, 2008, by and among, Euro Trend Inc., Data Storage Corporation and the shareholders of Data Storage Corporation named on the signature page thereto (incorporated by reference to Exhibit 10.1 to Form 8-K/A (File No. 333-148167) filed on June 29, 2009).
4.3
Data Storage Corporation 2010 Incentive Award Plan (incorporated by reference to Exhibit 10.1 on Form S-8/A (File No. 333-169042) filed on October 25, 2010).
4.4
Amended and Restated Data Storage Corporation 2010 Incentive Award Plan (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 001-35384) filed on April 26, 2012).
4.5
Data Storage Corporation 2021 Stock Incentive Plan (incorporated by reference to Appendix B to the Information Statement on Schedule 14C (File No. 001-35384) filed with the Securities and Exchange Commission on March 8, 2021).
4.6
Representative’s Warrant dated May 18, 2021 (incorporated by reference to Exhibit 4.1 to Form 8-K (File No. 001-35384) filed on May 18, 2021).
4.7
Form of Common Stock Warrant (incorporated by reference to Exhibit 4.2 to Form 8-K (File No. 001-35384) filed on May 18, 2021).
4.8
Warrant Agency Agreement, dated May 18, 2021, by and between the Company and VStock Transfer LLC (incorporated by reference to Exhibit 4.3 to Form 8-K (File No. 001-35384) filed on May 18, 2021).
4.9
Form of Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K (File No. 001-35384) filed on July 20, 2021).
4.10
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).
10.1
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).
10.2
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. 001-35384) filed on October 31, 2016).
10.3
Form of Stockholders Agreement by and between Data Storage Corporation, Nexxis Inc., and John Camello dated November 13, 2017 (incorporated by reference to Exhibit 10.23 to Form 10Q (File No. 001-35384) filled November 19, 2018).
53
10.4
Form of Employment Agreement between Data Storage Corporation, Nexxis Inc., and John Camello dated November 13, 2017 (incorporated by reference to Exhibit 10.23 to Form 10-Q (File No. 001-35384) filed November 19, 2018).
10.5
Buyout Lease Agreement between Data Storage Corporation and Systems Trading, Inc. dated March 15, 2018 (incorporated by reference to Exhibit 10.6 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.6
FMV Lease Agreement between Data Storage Corporation and Systems Trading, Inc. dated September 14, 2018 (incorporated by reference to Exhibit 10.7 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.7
Buyout Lease Agreement DSC003 between Data Storage Corporation and Systems Trading, Inc. dated December 18, 2018 (incorporated by reference to Exhibit 10.8 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.8
Buyout Lease Agreement DSC004 between Data Storage Corporation and Systems Trading, Inc. dated December 18, 2018 (incorporated by reference to Exhibit 10.9 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.9
Addendum 1 to Lease DSC003 between Data Storage Corporation and Systems Trading, Inc. dated March 20, 2019 (incorporated by reference to Exhibit 10.10 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.10
Addendum 1 to Lease DSC004 between Data Storage Corporation and Systems Trading, Inc. dated March 20, 2019 (incorporated by reference to Exhibit 10.11 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.11
Buyout Lease Agreement DSC006 between Data Storage Corporation and Systems Trading, Inc. dated November 12, 2019 (incorporated by reference to Exhibit 10.12 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.12
Agreement and Plan of Merger by and between Data Storage Corporation and Flagship Solutions, LLC dated February 4, 2021 (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 001-35384) filed on February 10, 2021).
10.13
Amendment, dated February 12, 2021, to the Agreement and Plan of Merger by and between Data Storage Corporation, Data Storage FL, LLC, Flagship Solutions, LLC, and the owners of Equity Interests (as defined therein) dated February 4, 2021 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-35384) filed on February 16, 2021).
10.14
Buyout Lease Agreement DSC007 between Data Storage Corporation and Systems Trading, Inc. dated March 4, 2021 (incorporated by reference to Exhibit 10.15 to Form 10-K (File No. 001-35384) filed March 31, 2021).
10.15
Employment Agreement with Mark Wyllie (incorporated by reference to Exhibit 10.2 to Form 8-K (File No. 001-35384) filed on June 3, 2021).
10.16
Form of Securities Purchase Agreement dated July 19, 2021 between Data Storage Corporation and certain purchasers (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 001-35384) filed on July 20, 2021).
10.17#
Form of Employment Agreement between Data Storage Corporation and Charles M. Piluso dated March 28, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 001-35384) filed March 31, 2023).
10.18#
Form of Employment Agreement between Data Storage Corporation and Chris H. Panagiotakos dated March 28, 2023 (incorporated by reference to Exhibit 10.2 to Form 8-K (File No. 001-35384) filed March 31, 2023).
10.19
Sublease between Sentinel Benefits Group, LLC and Sentinel Benefits Group, Inc. and Data Storage Corporation, dated as of January 17, 2024 (incorporated by reference to Exhibit 10.1 to Form 8-K (File No. 001-35384) filed March 27, 2024)
10.20#*
Employment Agreement Amendment between Data Storage Corporation and Charles M. Piluso
10.21#*
Employment Agreement Amendment between Data Storage Corporation and Chris H. Panagiotakos
19.1*
Insider Trading Policy
21.1*
List of Subsidiaries of Data Storage Corporation
54
23.1*
Consent of Rosenberg Rich Baker Berman P.A., Independent Registered Accounting Firm
24.1*
Power of Attorney – Signature Page
31.1*
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, As adopted Pursuant to Section 906 of the Sarbanes-Oxley Act 2002
32.2*
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, As adopted Pursuant to Section 906 of the Sarbanes-Oxley Act 2002
97.1*
Clawback Policy
*
Filed herewith
# Indicates management contract or compensatory plan.
55
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this to this report to be signed
on its behalf by the undersigned, thereunto duly authorized on the 28 th day of March 2024.
DATA STORAGE CORPORATION
By:
/s/ Charles M. Piluso
Name: Charles M. Piluso
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
Date: March 28, 2024
By:
/s/ Chris H. Panagiotakos
Name: Chris H. Panagiotakos
Title: Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
Date: March 28, 2024
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Charles M. Piluso, his true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this report, and
to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
Signature
Title
Date
/s/
Charles M. Piluso
Chief Executive Officer
March 28, 2024
Charles M. Piluso
(Principal Executive Officer)
/s/ Chris H. Panagiotakos
Chief Financial Officer (Principal
Financial Officer
March 28, 2024
Chris
H. Panagiotakos
and Principal Accounting Officer)
/s/
Harold J. Schwartz
President, Director
March 28, 2024
Harold Schwartz
/s/
Thomas C. Kempster
Executive
Vice President of Strategic Development, Director
March
28, 2024
Thomas Kempster
/s/
John Argen
Director
March 28, 2024
John Argen
/s/
Lawrence A. Maglione, Jr.
Director
March 28, 2024
Lawrence Maglione
/s/
Matthew Grover
Director
March 28, 2024
Matthew Grover
/s/
Todd A. Correll
Director
March 28, 2024
Todd Correll
/s/ Clifford Stein
Director
March 28, 2024
Clifford Stein
/s/ Nancy M. Stallone
Director
March 28, 2024
Nancy M. Stallone
/s/ Uwayne
A. Mitchell
Director
March 28, 2024
Uwayne
A. Mitchell
56