What changed in this filing

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Item 1. Business

2026-04-14 compared with 2025-03-31 · 241 added, 234 removed, 17 unchanged (97% of the section changed)

Corporate Overview

The Company is a leading provider of enterprise cloud

and business continuity solutions, specializing in fully managed cloud hosting, disaster recovery, cybersecurity, and IT automation services.

DSC leverages its expertise through its subsidiaries:

CloudFirst Technologies Corporation (“CloudFirst Technologies”), CloudFirst

(“CloudFirst Europe” and, together with CloudFirst Technologies, “CloudFirst”) , and Nexxis

Through its CloudFirst platform – built on IBM Power Systems infrastructure – DSC delivers high-performance

cloud solutions tailored for IBM i and AIX workloads.

This niche focus on IBM Power environments distinguishes CloudFirst in the market:

none of the major public cloud providers (AWS, Microsoft Azure, or Google Cloud) natively support IBM i/AIX workload, giving DSC a distinct

competitive edge in serving clients with these mission-critical systems.

The Company leverages long-term subscription contracts for its

cloud and disaster-recovery services, yielding a highly recurring revenue base and strong customer retention (historically over 90% annual

subscription renewal rates).

DSC’s client base exceeds 425 organizations across diverse sectors – including government, healthcare,

education, manufacturing, and Fortune 500 enterprises – reflecting broad market demand for its multi-cloud hosting and business

continuity solutions.

In recent years, DSC has undertaken strategic expansions (organically and via acquisitions) to reinforce its position

as an emerging growth leader in the multi-billion-dollar cloud hosting and business continuity market.

Notably, the integration of Flagship

Solutions, LLC (“Flagship”) (which became a subsidiary of DSC in 2021) into CloudFirst was completed in January 2024, unlocking

operational synergies and enabling cross-selling of the full CloudFirst suite to Flagship’s established customer base.

This integration,

combined with enhanced distribution and marketing capabilities post-2021 Nasdaq uplisting, has bolstered DSC’s growth trajectory

and technical expertise.

Solutions and Services

DSC provides a comprehensive portfolio of solutions

to ensure clients’ critical IT systems remain operational, secure, and resilient:

• Cloud Infrastructure Services (IaaS)

– CloudFirst offers fully managed cloud hosting for IBM Power systems (IBM i and AIX) as well as x86 environments.

Clients can migrate

on-premises IBM workloads to DSC’s owned and operated cloud and run them on enterprise-grade IBM Power infrastructure, with interoperability

to public clouds like AWS, Azure, and Google for hybrid deployments.

DSC’s cloud solutions include comprehensive migration services

to ensure seamless transfer of data and applications from legacy systems to the cloud with minimal downtime.

• Disaster Recovery & Business Continuity

– DSC delivers robust disaster-recovery-as-a-service and business continuity solutions to protect organizations from downtime and

CloudFirst’s recovery services provide off-site data replication, rapid failover for IBM i/AIX and Windows/Linux systems,

and cloud-based backup to meet stringent recovery time objectives.

These services ensure that clients can quickly restore critical applications

in the event of cyberattacks, hardware failures, or natural disasters, thereby minimizing operational disruption.

• Cybersecurity Solutions – Through

its security suite, DSC offers comprehensive cybersecurity and compliance services.

This includes endpoint protection, network security,

data encryption, ransomware defense, vulnerability assessments, and IBM i security monitoring.

By integrating cybersecurity into its cloud

and DR offerings, DSC provides a layered defense to safeguard client data and systems across on-premise and cloud environments.

• Managed IT Services and Support –

DSC augments its core cloud offerings with managed services such as systems monitoring, IT automation, and voice & data communications

For example, through its Nexxis subsidiary, DSC provides Voice over Internet Protocol (“VoIP”)/Unified Communications

and dedicated internet connectivity as part of its one-stop solution set.

These ancillary services enable clients to rely on a single

provider for a broad range of IT infrastructure needs.

This integrated solutions portfolio positions DSC

as a single-source provider for cloud infrastructure, disaster recovery, cybersecurity, and connectivity.

From initial cloud migration

through ongoing management and support, the Company ensures clients’ workloads run securely and efficiently in a multi-cloud environment.

DSC’s value proposition is underscored by its high service reliability (Tier III data centers with 99.999% uptime SLAs) and a consultative

approach by in-house solution architects to meet each client’s unique requirements.

Competitive Positioning and CloudFirst Strategy

CloudFirst occupies a distinct competitive niche as

a premier cloud solution for IBM Power Systems, an area with high barriers to entry and limited competition.

Because IBM i and AIX workloads

cannot be easily re-platformed to standard x86 cloud environments, hyperscale cloud providers (Amazon, Microsoft, Google) generally do

not compete in this segment.

DSC has capitalized on this gap by building a cloud platform specialized for IBM Power – complete with

the necessary hardware, OS expertise, and tools to support mission-critical IBM environments.

This focus, combined with DSC’s deep

IBM technical know-how, allows the Company to address complex legacy modernization and disaster recovery needs that others cannot readily

At the same time, CloudFirst is designed for interoperability with mainstream clouds:

the platform integrates via high-bandwidth,

low-latency connections to AWS, Azure, Google, and IBM Cloud, enabling clients to run IBM i/AIX systems in parallel with their other cloud-native

This multi-cloud capability gives enterprises the “best of both worlds” – they can maintain essential IBM

systems, whereby protecting their applications designed for the IBM operating platform on CloudFirst, while interfacing seamlessly with

applications hosted on public clouds.

Security and compliance are core to CloudFirst’s value proposition.

data centers meet Tier III standards and SOC 2 Type II compliance, offering the highest levels of reliability and data protection.

infrastructure and processes are aligned with stringent regulatory requirements in the United States, Canada, and the United Kingdom,

which is crucial for clients in regulated industries (financial services, government, healthcare, etc.).

Additionally, DSC’s cloud

services adhere to data sovereignty laws by enabling clients to keep data within country borders (e.g., Canadian data in Canada, UK data

in UK data centers).

By prioritizing security certifications and regional compliance, CloudFirst provides enterprise customers with confidence

that their critical systems are hosted in an environment that meets national security standards and privacy laws.

This commitment to security,

combined with 24x7 managed support, has solidified DSC’s reputation as a trusted partner for business continuity.

Industry recognition

of this niche leadership is evident – DSC is viewed as an emerging growth leader in cloud infrastructure and the migration of data

to the cloud for IBM Power workloads.

Global Footprint and Infrastructure

DSC has established a global cloud infrastructure footprint to serve its clients’

multi-national needs.

The Company operates and leverages a network of Tier III data center facilities across North America and Europe,

including five in the United States, which includes one new data center facility in Chicago, two in Canada, and three in the United Kingdom

(Scotland and England).

This expansive footprint was built through strategic investments and partnerships:

historically, DSC operated

out of seven primary data centers across the U.S.

and Canada, and in 2024 it expanded into Europe by partnering with leading regional

data center providers (e.g., Brightsolid in Scotland and Pulsant in England).

By early 2025, CloudFirst’s platform spanned three

countries and served over 400 clients globally.

Having infrastructure in multiple geographies allows DSC to deliver cloud infrastructure

and recovery services from a single source across continents, a capability few competitors offer.

Clients with international operations

can rely on CloudFirst to host and protect data in-region for performance and compliance, while managing everything through one provider.

For example, a U.S.-based enterprise with subsidiaries in Canada and the UK can run IBM i production in DSC’s U.S.

cloud, have disaster

recovery in Canada, and extend certain workloads or backups to the UK – all under CloudFirst’s management.

This one-stop,

multi-country service model is highly differentiated in the mid-market enterprise segment, where companies often struggle to find integrated

solutions for IBM Power workloads across regions.

DSC’s data centers are inter-connected and built with full redundancy (power,

cooling, network) and round-the-clock operations support, ensuring consistent service levels worldwide.

The geographic diversity of these

sites also adds resiliency (e.g., data can be replicated to a different country for added protection).

Management believes this global

infrastructure approach for cross-border cloud services provides DSC with a competitive advantage in winning customers seeking a single

vendor for all their cloud hosting and business continuity needs.

Growth Strategy and Cross-Selling Opportunities

growth strategy is centered on expanding its cloud footprint and cross-selling its full suite of solutions to meet the evolving needs

of its clients.

A key pillar of this strategy is capitalizing on cross-sell opportunities that arise from the Company’s multi-country

presence and broadened solution set.

As the Company enters

new regions like Europe, DSC can target existing North American clients who have overseas operations, offering to migrate or protect

those international workloads via CloudFirst’s new UK facilities.

Similarly, partnerships with local providers (such as Pulsant

in the UK) open access to new customer bases that DSC can serve with its IBM expertise – including European organizations and U.S.

multinationals operating abroad.

Management has structured these partnerships to maximize customer engagement across different industry

verticals and regions, thereby creating access to a much broader addressable market.

Early success of this approach is evidenced by growing

demand in the UK/EU for IBM cloud services, which CloudFirst is now positioned to fulfill as one of the few specialized providers in

In North America, DSC continues to deepen penetration in high-value verticals

such as finance, healthcare, and insurance that require the reliable continuity solutions DSC provides.

The Company’s unified sales

team now markets an expanded portfolio – for instance, a disaster recovery customer can be upsold to production hosting on CloudFirst,

cybersecurity services, and even voice/data connectivity, all through one relationship.

Internally, the consolidation of Flagship into

the CloudFirst brand has enhanced this cross-selling:

Flagship’s legacy customers (who may have originally engaged for IBM hardware

or software solutions) are being introduced to DSC’s cloud and DR services, driving incremental recurring revenue.

To support these

efforts, DSC is investing in its distribution channels, including IBM Business Partners, Managed Service Provider’s (MSPs), and

resellers, to refer and resell CloudFirst services globally.

The Company is also pursuing selective acquisitions and alliances to broaden

its technical capabilities and customer reach.

In 2024, DSC reported

$25.4 million in total revenue, with greater than 80% stemming from recurring sources, including cloud-based hosting and disaster recovery

solutions, infrastructure-as-a-service hosting, managed services, cyber security and maintenance subscriptions.

This base of annual recurring

revenue reflects the effectiveness of the Company’s subscription-focused model.

The remaining contract value for cloud services

totals approximately $39.2 million, providing revenue visibility and supporting future growth expectations.

The Company ended the year

with a $21.5 million Annual Recurring Revenue (ARR) run rate.

With a contract renewal rate exceeding 90%, DSC is positioned to

maintain and expand its customer base.

DSC operates with no debt and continues to improve operating margins as it scales its cloud solutions

and service offerings.

Looking forward, the Company is advancing its strategy, expanding its company owned and managed IBM Power platform

into new markets, including a recent entry into Europe.

Management believes that there is a global migration of IBM power systems and

disaster recovery to cloud based solutions.

DSC is uniquely positioned to capitalize on these trends, driving sustained revenue growth

and long-term shareholder value.

Overall, DSC’s integrated approach – a unique IBM-focused cloud

platform, compliance-driven global data center presence, and a broad suite of continuity and security solutions – positions the

Company as a comprehensive one-stop provider for enterprises undergoing digital transformation and cloud migration.

By emphasizing its

CloudFirst differentiators and executing on cross-sell opportunities, DSC aims to strengthen its market position as a trusted partner

for cloud infrastructure and business continuity worldwide.

Data Storage Corporation (“Data Storage,”

“we,” “us,” “our” and the “Company”) has been a leading provider of multi-cloud hosting,

fully managed cloud services, disaster recovery, cybersecurity, IT automation, and voice & data solutions for more than twenty years.

Following the sale of our cloud solutions business on September 11, 2025, which consisted of the operations of our subsidiaries, CloudFirst

Technologies Corporation and CloudFirst Europe Ltd., there has been a strategic shift in our operations.

We continue to operate our subsidiary,

(“Nexxis”), a telecommunications and data solutions access company.

We are currently focused on managing, building,

expanding or acquiring synergetic technology companies that provide leading edge solutions that assist businesses and institutions improve

their business processes.

We are pursuing acquisitions of companies in complementary and high-growth technology sectors.

Nexxis is a provider of fully managed business voice,

internet, data transport, and SD-WAN communication solutions engineered for enterprise-grade reliability, cloud performance, and simplified

It delivers integrated technology services designed to support modern, cloud-centric work environments with continuous uptime,

superior quality of service, and a single point of management for complex connectivity needs.

Nexxis operates nationwide, serving businesses

across multiple verticals including healthcare, professional services, financial services, manufacturing, and distributed enterprise environments.

Nexxis positions itself as a cloud-first communications provider delivering high-availability voice and data services with a simplified

operational model.

Nexxis differentiates itself through integrated voice and internet architecture, proactive monitoring, enterprise-grade

performance, and a white-glove customer experience.

The solutions offered by Nexxis are particularly well-suited for distributed enterprises,

hybrid workforces, cloud-dependent organizations, and businesses requiring high uptime and performance guarantees.

The unified service agreement offered by Nexxis to

its customers provides fully managed, integrated connectivity services that combine advanced voice communications with high-performance

internet and WAN infrastructure.

Nexxis’ business model emphasizes operational simplicity, performance optimization, and vendor

consolidation.

Key value drivers include:

● Fully Managed 24×7 monitoring and support;

● Multi-carrier redundancy and intelligent SD-WAN routing;

● Single invoice and unified service management;

● Reduced downtime and improved business continuity;

● Lower total cost of ownership compared to legacy multi-vendor environments.

Sale of CloudFirst Business

On September 11, 2025, we closed the sale of the CloudFirst

business, for which we received $38,068,463 in cash.

This amount was based on a contractual base purchase price of $40,000,000, adjusted

at closing for a $1,500,000 escrow deposit and $431,537 in net adjustments for estimated closing date debt and working capital.

taking into account the selling expenses, estimated taxes on the sale, and other transaction costs, our net proceeds from the sale were

approximately $31.6 million.

Recent Developments

As part of our strategy to return value to

our shareholders following the sale of the CloudFirst business, our Board of Directors (the “Board”) determined to engage

in a tender offer (the “Tender Offer”) to repurchase from our shareholders up to 85% of our outstanding shares of common

stock, par value $0.001 per share (“Common Stock”), using 85% of our cash on hand on the date of commencement of the Tender

Offer, inclusive of the net sale proceeds received in connection with the sale of the CloudFirst business, net of certain expenses and

On December 8, 2025, we commenced the Tender Offer

to purchase up to 6,192,990 shares of Common Stock, representing approximately 83% of our issued and outstanding shares as of December

1, 2025, at the maximum aggregate purchase price for shares purchased in the Tender Offer of $32,203,548.

The Tender Offer expired on

January 12, 2026.

In accordance with the terms and conditions of the

Tender Offer, based on the final count, on January 15, 2026, we accepted for purchase 5,625,129 shares of Common Stock at a purchase price

of $5.20 per share, for an aggregate cost of $29,250,971.

The shares accepted for purchase represent approximately 72.0% of the total

number of shares of Common Stock outstanding as of December 8, 2025.

Following payment for the tendered shares, we had 2,167,138 shares

of Common Stock outstanding.

After completing the Tender Offer and related payments, we retained over $10.0 million in cash.

in the tendered shares were an aggregate of 895,876 shares of Common Stock tendered by our directors and officers.

Strategy and Competitive Position

With the completion of the Tender Offer, we have streamlined

our capital structure, while maintaining a strong balance sheet and liquidity to support future strategic initiatives, with the goal of

maximizing long-term shareholder value.

The Board is actively evaluating strategic opportunities that support our growth plan, centered

on thoughtful consolidation across technology-enabled services.

Our strategy prioritizes businesses with recurring revenue, high margins,

established customer bases, and clear paths to scale—particularly in areas such as GPU type environments, AI-driven software applications,

cybersecurity, and telecommunications, including, without limitation:

● Targeted Acquisitions

in High-Growth Sectors – We intend to leverage our management’s expertise in technology and pursue acquisitions of companies

in complementary and high-growth technology sectors which may include the following:

o Artificial Intelligence (AI), Enabled Vertical Software-as-a-Service (SaaS), GPU Infrastructure-as-a-Service (IaaS)

Cybersecurity

solutions and related applications and services, such as SOC.

in companies in various sectors

● Sale or Merger of

the Company – Our Board may evaluate potential strategic interest in the public company itself, including a full sale, reverse

merger, or other business combination with a third party that may benefit from our public listing, cash position, 250 million shares authorized

and clean capital structure;

● A Hybrid of the

Above Strategies – We may pursue a combination of the above strategies for the remaining sale proceeds beyond those intended

to be used for the Tender Offer.

The Board has not made a final determination regarding

the use of our current cash on hand.

Any such actions will be subject to further review, market conditions, and, where required, shareholder

We are committed to maximizing shareholder value while maintaining flexibility to pursue the most advantageous path forward.

Government Regulation

DSC operates within a complex and evolving regulatory

landscape, governed by a multitude of federal, state, local, and international privacy laws.

These laws regulate the Company’s handling

of personal and customer data, reflecting the growing importance of privacy in the digital age.

Compliance with these regulations is critical,

as failure to do so could result in legal action, loss of customer trust, and negative impacts on the Company’s reputation and operations.

We operate through our Nexxis subsidiary, within a

complex and evolving regulatory landscape, governed by a multitude of federal, state, local, and international privacy laws.

regulate tour handling of personal and customer data, reflecting the growing importance of privacy in the digital age.

Compliance with

these regulations is critical, as failure to do so could result in legal action, loss of customer trust, and negative impacts on our reputation

and operations.

Key Regulatory Frameworks:

The Company is committed to adhering to industry standards and the various

privacy policies and obligations it holds towards third parties.

This includes compliance

with laws and regulations related to the protection and handling of personal information

and customer data.

Sector Compliance:

Particularly significant is the Company’s compliance with health-related privacy laws such as the

Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical

Health Act (HITECH).

General Compliance:

We are committed to adhering to industry standards and the various privacy policies and obligations it holds towards third parties.

This includes compliance with laws and regulations related to the protection and handling of personal information and customer data.

Healthcare Sector Compliance:

Particularly significant is our compliance with health-related privacy laws such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH).

These regulations mandate strict controls over the handling of health information to protect patient privacy.

Associate Agreements (BAAs):

For healthcare clients,

the Company enters into BAAs that outline the permissible uses of health information, ensure the protection of this data through

appropriate safeguards, and require notification of any unauthorized use or disclosure.

Business Associate Agreements (BAAs):

For healthcare clients, we enter into BAAs that outline the permissible uses of health information, ensure the protection of this data through appropriate safeguards, and require notification of any unauthorized use or disclosure.

Compliance Measures Include:

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Implementing robust administrative, physical, and technical safeguards to protect personal information.

Obligating the Company to report any unauthorized information use or disclosure to the client.

Permitting termination of the service by clients if the Company breaches BAA terms and cannot rectify the breach.

Obligating us to report any unauthorized information use or disclosure to the client.

Permitting termination of the service by clients if we breach BAA terms and cannot rectify the breach.

Mandating the return or destruction of all personal health information upon the termination of a client’s subscription.

The regulatory environment for DSC is marked by rapid

The regulatory environment for us is marked by rapid

changes and requires continuous vigilance to ensure compliance.

As privacy regulations evolve, the Company may need to adjust its services

and practices to remain compliant, thereby safeguarding its reputation and facilitating the development of new and innovative services

that respect customer privacy.

As privacy regulations evolve, we may need to adjust our services and

practices to remain compliant, thereby safeguarding our reputation and facilitating the development of new and innovative services that

respect customer privacy.

Nexxis Regulatory Framework

Nexxis provides interconnected nomadic Voice over

Internet Protocol (“VoIP”) services, internet access services, and data transport services.

These offerings are generally

classified as “information services” under the Communications Act of 1934, as amended (the “Communications Act”),

rather than “telecommunications services.” As a result, Nexxis’ services are subject to a different and generally less

comprehensive regulatory framework than that applicable to traditional common carrier telecommunications providers.

However, information

services remain subject to an evolving regulatory landscape at the federal, state, and local levels, and certain aspects of Nexxis’

operations are regulated notwithstanding its status as an information services provider.

Federal Communications Commission Regulation

The Federal Communications Commission (“FCC”)

regulates certain aspects of interconnected nomadic VoIP and broadband internet access services.

While the FCC has historically classified

interconnected nomadic VoIP as an information service, it has imposed a number of service-specific regulatory obligations, including requirements

● Enhanced 911 (“E911”) services, including the provision of emergency calling capabilities

and customer notice requirements;

● Communications Assistance for Law Enforcement Act (“CALEA”) compliance, which requires covered

providers to assist law enforcement agencies in executing lawful electronic surveillance;

● Number portability, access to numbering resources, and participation in numbering databases where applicable;

● Disability access requirements under the Twenty-First Century Communications and Video Accessibility Act

● Customer proprietary network information (“CPNI”) protections, to the extent applicable;

● Truth-in-billing and consumer disclosure obligations, including transparency relating to rates, fees,

and service limitations.

In addition, broadband internet access services may

be subject to FCC transparency rules and other limited obligations applicable to information services.

The regulatory classification of

broadband internet access services has been subject to periodic reassessment by the FCC, and reclassification or the adoption of additional

rules could result in expanded regulatory requirements, including potential common-carrier-like obligations.

Universal Service and Regulatory Fees

Although information services providers are not generally

treated as common carriers, interconnected VoIP providers are required to contribute to the Universal Service Fund (“USF”),

which supports programs designed to promote access to telecommunications services, including high-cost, low-income, schools and libraries,

and rural healthcare programs.

Nexxis is also subject to FCC regulatory fee obligations and reporting requirements associated with these

contributions.

Changes in contribution methodologies, assessment bases, or contribution rates could increase Nexxis’ costs of operations.

State and Local Regulation

State public utility commissions and local authorities

may assert jurisdiction over certain aspects of interconnected VoIP, internet access, and data transport services, particularly with respect

to consumer protection, emergency services, taxation, and public safety requirements.

While federal law generally preempts state regulation

that treats information services as traditional telecommunications services, states continue to adopt and enforce laws governing:

● Emergency communications and 911-related obligations;

● Service quality and consumer complaint processes;

● Privacy and data security requirements;

● State and local taxes, fees, and surcharges applicable to communications services.

The scope of permissible state regulation in this

area continues to develop, and inconsistent state requirements could increase compliance complexity and costs.

Privacy, Data Security, and Cybersecurity

Nexxis’ operations involve the collection, processing,

and transmission of customer and network data.

As a result, Nexxis is subject to federal, state, and local laws and regulations governing

privacy, data security, and cybersecurity, including laws addressing the protection of personally identifiable information, data breach

notification, and network security.

These requirements are expanding and evolving, particularly at the state level, and may impose additional

compliance, monitoring, and reporting obligations.

Lawful Intercept and Public Safety Requirements

In addition to CALEA obligations, Nexxis must comply

with other federal and state laws designed to support public safety and national security, including requirements to cooperate with lawful

intercept requests and to maintain the technical capability to support such requests.

Compliance with these obligations may require investments

in network design, systems, and personnel.

Regulatory Uncertainty

The regulatory framework applicable to interconnected

nomadic VoIP, internet access, and data transport services continues to evolve as technology advances and policy priorities change.

regulatory, or judicial actions could result in the reclassification of Nexxis’ services, the imposition of new obligations, or

increased enforcement activity.

Compliance with these changes could require additional expenditures, operational modifications, or changes

to Nexxis’ business model.

Human Capital Resources

DSC attributes its success to the skill and dedication of its workforce, consisting

of fifty-three full-time and two part-time employees as of March 15, 2025.

The team is diverse, with roles across executive management,

administration, finance, sales, marketing, and a robust technical team, complemented by independent contractors for service support and

installations as needed.

The Company has no collective bargaining agreements in place and maintains a positive relationship with its employees.

Key aspects of the Company’s human capital management

We attribute our success to the skill and dedication

of our workforce, consisting of seven full-time employees as of March 31, 2026.

We have no collective bargaining agreements in place and

maintain a positive relationship with our employees.

Key aspects of our human capital management include:

Employee Composition:

The workforce includes eight in executive management, five in administration and finance, eleven in sales, three in marketing, and twenty-eight in technical roles .

Compensation programs are performance-aligned

to incentivize both short-term and long-term achievements, aiming to attract, retain, and motivate talent.

Employee health and safety are paramount,

underscoring the Company’s commitment to its staff and operational philosophy.

The workforce includes four in executive management, one in sales, and two in technical roles.

Compensation Strategy:

Compensation programs are performance-aligned to incentivize both short-term and long-term achievements, aiming to attract, retain, and motivate talent.

Health and Safety:

Employee health and safety are paramount, underscoring our commitment to our staff and operational philosophy.

Corporate Information

Data Storage Corporation, a Delaware corporation founded in 2001, became a subsidiary

of the Company, a Nevada corporation (DSC), in 2008.

DSC was initially incorporated as Euro Trend Inc.

on March 27, 2007, and consummated

a share exchange transaction in October 2008.

The Company underwent a name change to its current identity post-acquisition.

On May 31, 2021, the

Company completed a merger of Flagship, a Florida limited liability company, and the Company’s wholly-owned subsidiary, Data Storage

FL, LLC, a Florida limited liability company.

Flagship is a provider of Hybrid Cloud solutions, managed services and cloud solutions.

On January 1, 2024, Flagship Solutions, LLC was consolidated into the Company’s wholly-owned subsidiary, CloudFirst Technologies

Corporation, a Delaware corporation incorporated in 2001.

Data Storage Corporation, a Delaware corporation founded

in 2001, became a subsidiary of the Company, a Nevada corporation, in 2008.

On October 20, 2008, the Company consummated a share exchange

transaction with Euro Trend Inc.

The Company subsequently changed its name from Euro Trend Inc.

to Data Storage Corporation post-acquisition.

In June 2010, we purchased SafeData, LLC, bringing

the added solutions for IBM Power Systems disaster recovery and business continuity;

in October 2012, we purchased the software and assets

of Message Logic LLC, an email archival and compliance software.

In November 2012, we formed a joint venture with ABC

Services, Inc.

and formed Secure Infrastructure and Services LLC (“SIAS”), the first multi-tenant IBM Hosting for IBM Power

In October 2016 we purchased 50% of SIAS and 100% of ABC Services, Inc.

On October 19, 2017, we formed a new division,

Nexxis, to provide VOIP services.

We own 80% of the telecommunications and data solutions access company.

Prior to our sale of the CloudFirst

business, Nexxis was positioned to cross sell our client base and provide new opportunities from of our base.

On February 18, 2021, we announced a joint venture

agreement with Able-One Systems Inc.

(“Able-One”) to provide our portfolio of enterprise-level IBM cloud infrastructure services

to customers in Canada, filling a vital need for cloud services in Canada among businesses that run IBM Power Systems on IBM i, AIX and

Linux operating systems.

On May 31, 2021, we completed a merger of Flagship

Solutions, LLC, a Florida limited liability company providing Hybrid Cloud solutions, managed services and cloud solutions, (“Flagship”)

and our wholly-owned subsidiary, Data Storage FL, LLC, a Florida limited liability company.

This transaction with an IBM Gold Business

Partner was synergetic to the Company’s services and added new solutions.

On January 1, 2024, Flagship was consolidated into our

wholly-owned subsidiary, CloudFirst Technologies Corporation, a Delaware corporation incorporated in 2001.

The result of these acquisitions, combined with the

Company’s business continuity disaster recovery and IBM Power cloud infrastructure solutions, positioned Data Storage Corporation

as an industry leader.

On January 27, 2022, we formed Information Technology

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asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses

On August 12, 2024, the Company

formed UK Cloud Host Technologies Ltd., a company formed

under the laws of the United Kingdom, for the purpose of establishing an executive presence in London, United Kingdom and managing the

business and affairs of the Company within Europe.

On December 27, 2024, the name of the entity was changed to CloudFirst Europe

The Company’s corporate headquarters are located

at 225 Broadhollow Road, Suite 307, Melville, New York 11747, which are leased pursuant to a lease agreement, dated January 17, 2024.

The lease commenced on April 1, 2024, and has a term of sixty-seven months.

The monthly rent is $11,931 and the lease expires on October

The Company believes that these headquarters are adequate for its current operations and needs.

On August 12, 2024, we formed UK Cloud

Host Technologies Ltd., a company formed under the laws of the United Kingdom, for the purpose of establishing an executive presence

in London, United Kingdom and managing the business and affairs of the Company within Europe.

On December 27, 2024, the name of the

entity was changed to CloudFirst Europe Ltd.

On September 11, 2025, we transferred 100% of the

outstanding equity interests of CloudFirst Europe Ltd.

in connection with the sale of our CloudFirst business, which consisted of the

operations of our subsidiaries, CloudFirst Technologies Corporation and CloudFirst Europe Ltd., to the purchaser thereof.

Our Nexxis subsidiary leases office space in Melville,

The lease commenced on September 11, 2025 on a month-to-month basis.

On February 17, 2026, a lease was executed, requiring monthly

payments of $1,800, and expiring on December 31, 2026.

In connection with the sale of our CloudFirst business, we entered into a sub-sublease

agreement, pursuant to which the purchaser of the CloudFirst business assumed our obligations under the lease.

We believe that our

facilities, including those of Nexxis, are adequate for our current operations and needs, and those of Nexxis.

Available Information

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Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and any amendments, are accessible

for free on the Company’s website (www.dtst.com) under the Investor Relations section following their SEC submission.

on the Company’s website is not incorporated by reference into this Annual Report or any other SEC filings.

for free on our website (www.dtst.com) under the Investor Relations section following their SEC submission.

The content on our website

is not incorporated by reference into this Annual Report or any other SEC filings.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business