Data Storage Corp to Divest Cloud Business; Board Urges Shareholder Approval

TL;DR

**DTSTW is selling off its entire cloud business, a massive strategic pivot that shareholders need to approve – this is a 'sell the news' event for current cloud-focused investors.**

AI Summary

Data Storage Corporation (DSC) is seeking shareholder approval for a significant strategic shift: the divestiture of its entire cloud solutions business, including all assets of its subsidiary CloudFirst Technologies Corporation and 100% of CloudFirst Europe Ltd. This sale represents substantially all of DSC's assets. The Board of Directors has unanimously approved this Divestiture, deeming it fair and advisable for shareholders. The 2025 Annual Meeting, scheduled for September 10, 2025, at the Marriott Melville, will also address the election of ten directors, the ratification of Rosenberg Rich Baker Berman, P.A. as the independent auditor for fiscal year 2025, and a non-binding advisory vote on executive compensation. This move indicates a major restructuring, potentially impacting future revenue streams and strategic direction, moving away from its core cloud offerings.

Why It Matters

This divestiture is a seismic shift for Data Storage Corporation, signaling a complete exit from its cloud solutions business, which comprises substantially all of its assets. For investors, this means a fundamental re-evaluation of DSC's future business model and potential capital allocation post-sale, as the company will be left without its primary operating assets. Employees of CloudFirst Technologies Corporation and CloudFirst Europe Ltd. face uncertainty regarding their employment under new ownership. Customers of DSC's cloud services will experience a transition to a new provider, potentially impacting service continuity and relationships. In the competitive data storage and cloud market, this move suggests DSC may have struggled to compete effectively or found a more lucrative path through asset sale, contrasting with competitors expanding their cloud footprints.

Risk Assessment

Risk Level: high — The risk level is high because the filing explicitly states the divestiture represents the sale of 'substantially all of DSC’s assets,' including 100% of CloudFirst Europe Ltd. This leaves the company without its primary operating business, creating significant uncertainty about its future operations, revenue generation, and strategic direction post-sale. Shareholders are voting on the very existence of the company as a going concern in its current form.

Analyst Insight

Investors should carefully review the terms of the divestiture and understand what remains of Data Storage Corporation post-sale. Consider selling if your investment thesis was tied to their cloud solutions business, as the company will fundamentally change. Await further details on the use of proceeds from the sale.

Key Numbers

• 100% — Equity interests of CloudFirst Europe Ltd. (Being sold as part of the divestiture)
• 10 — Number of directors (Proposed for election to the Board)
• 2025 — Fiscal year (For which Rosenberg Rich Baker Berman, P.A. is appointed auditor)

Key Players & Entities

• Data Storage Corporation (company) — Registrant seeking shareholder approval for divestiture
• CloudFirst Technologies Corporation (company) — Subsidiary whose assets are being sold as part of the divestiture
• CloudFirst Europe Ltd. (company) — Entity whose 100% equity interests are being sold
• Rosenberg Rich Baker Berman, P.A. (company) — Independent registered public accounting firm for fiscal year 2025
• Marriott Melville (company) — Venue for the 2025 Annual Meeting
• September 10, 2025 (date) — Date of the 2025 Annual Meeting of Shareholders
• 11:00 a.m. (time) — Local time for the 2025 Annual Meeting
• Melville, NY (location) — City where the 2025 Annual Meeting will be held
• Board of Directors (person) — Unanimously determined the Divestiture to be fair and advisable
• 001-35384 (regulator) — SEC File Number for Data Storage Corp

FAQ

Risk Factors

• Divestiture of Substantially All Assets [high — operational]: The company is proposing the divestiture of its entire cloud solutions business, which represents substantially all of its assets. This includes the sale of CloudFirst Technologies Corporation and CloudFirst Europe Ltd. This significant strategic shift away from its core cloud offerings could impact future revenue streams and operational capabilities.
• Shift in Strategic Direction [medium — market]: The divestiture of the cloud solutions business signifies a major restructuring for Data Storage Corporation. Moving away from its established cloud offerings may expose the company to new market dynamics and competitive pressures in its remaining or future business segments.
• Impact of Divestiture on Financial Performance [high — financial]: The sale of substantially all assets will fundamentally alter the company's financial profile. Investors will need to assess the proceeds from the sale and the financial health and prospects of the remaining business operations post-divestiture.

Industry Context

Data Storage Corporation operates within the broader technology sector, specifically in computer processing and data preparation (SIC 7374). The company's strategic shift away from cloud solutions suggests a re-evaluation of its position in a highly competitive and rapidly evolving cloud services market, which is characterized by major players and continuous innovation.

Regulatory Implications

The divestiture of substantially all assets may trigger reporting requirements and reviews by regulatory bodies depending on the transaction's structure and value. Shareholders should be aware of any potential antitrust or other regulatory approvals needed for the sale to be completed.

What Investors Should Do

1. Review the proxy statement thoroughly to understand the terms and implications of the proposed divestiture of the cloud solutions business.
2. Vote on the Divestiture Proposal at the 2025 Annual Meeting on September 10, 2025, considering the long-term impact on the company's strategic direction and financial future.
3. Consider the election of the ten proposed directors and their alignment with the company's new strategic path.
4. Evaluate the ratification of the independent auditor and the advisory vote on executive compensation.

Key Dates

• 2025-09-10: 2025 Annual Meeting of Shareholders — Shareholders will vote on the proposed divestiture of the cloud solutions business, election of directors, ratification of auditors, and executive compensation.
• 2025-12-31: Fiscal Year End — The fiscal year for which Rosenberg Rich Baker Berman, P.A. is appointed as the independent auditor.
• 2025-08-08: Filing Date of Definitive Proxy Statement — Indicates the official communication to shareholders regarding the upcoming annual meeting and proposals.

Glossary

DEF 14A

A Definitive Proxy Statement filed with the SEC by publicly traded companies to solicit shareholder votes. (This document outlines the proposals shareholders will vote on, including the significant divestiture of the cloud business.)

Divestiture

The act of selling or disposing of an asset, business unit, or subsidiary. (Refers to the proposed sale of Data Storage Corporation's entire cloud solutions business.)

CloudFirst Technologies Corporation

A subsidiary of Data Storage Corporation whose assets are part of the proposed divestiture. (Its sale, along with CloudFirst Europe Ltd., constitutes the core of the proposed transaction.)

CloudFirst Europe Ltd.

A subsidiary of Data Storage Corporation whose 100% equity interests are being sold as part of the divestiture. (Its sale is a key component of the transaction, impacting the company's European cloud operations.)

Rosenberg Rich Baker Berman, P.A.

The independent registered public accounting firm proposed to be ratified for fiscal year 2025. (Their ratification is a standard agenda item for annual meetings, ensuring financial oversight.)

Year-Over-Year Comparison

This filing represents a significant departure from previous disclosures due to the proposed divestiture of substantially all of Data Storage Corporation's assets, including its entire cloud solutions business. Previous filings would have focused on the performance and strategy of these now-divested operations. This DEF 14A signals a major strategic pivot, and comparisons of key financial metrics like revenue and margins will be less relevant until the post-divestiture business model is established and reported on.

Key Financial Figures

• $0.001 — rs of shares of common stock, par value $0.001 (the “Common Stock”) of Dat
• $1.1 million — s company, that generated approximately $1.1 million in revenue for the year ended December
• $2 billion — with assets under management exceeding $2 billion. Purchaser’s corporate headquarte
• $40 m — s pursuant to the Purchase Agreement is $40 million, as adjusted in accordance with t
• $5.03 — t closing price of DSC Common Stock was $5.03 on January 6, 2025. By early 2025, DSC&
• $3.00 — s share price had declined into the mid-$3.00 range. During the month of June 2025, t
• $3.33 — DSC’s Common Stock ranged between $3.33 to $3.88. Using the high closing price
• $3.88 — ;s Common Stock ranged between $3.33 to $3.88. Using the high closing price of $3.88
• $27.8 million — DSC had a market value of approximately $27.8 million. This market value included the assets
• $27.8 million — ture. The market value of approximately $27.8 million is less than the $40 million Base Purch
• $40 million — ximately $27.8 million is less than the $40 million Base Purchase Price (as adjusted pursua

Filing Documents

• e6762_def14a.htm (DEF 14A) — 1639KB
• image_001.jpg (GRAPHIC) — 6KB
• image_002.jpg (GRAPHIC) — 6KB
• image_003.jpg (GRAPHIC) — 6KB
• image_004.jpg (GRAPHIC) — 28KB
• image_005.jpg (GRAPHIC) — 27KB
• image_006.jpg (GRAPHIC) — 24KB
• image_007.jpg (GRAPHIC) — 20KB
• proxy_002.jpg (GRAPHIC) — 713KB
• proxy_001.jpg (GRAPHIC) — 976KB
• 0001731122-25-001091.txt ( ) — 4129KB

From the Filing

DEF 14A 1 e6762_def14a.htm FORM DEF 14A UNITED SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to §240.14a-12 DATA STORAGE CORPORATION (Name of Registrant as Specified in its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): No fee required. Fee paid previously with preliminary materials. Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11. August 8, 2025 Dear Fellow Data Storage Corporation Shareholders: Data Storage Corporation (“DSC”) invites you to attend its 2025 Annual Meeting (the “2025 Annual Meeting”) of Shareholders to be held at the Marriott Melville, 1350 Walt Whitman Road, Melville, NY 11747, on September 10, 2025, at 11:00 a.m. local time. The Notice of the 2025 Annual Meeting and proxy statement accompanying this letter provide information concerning matters to be considered and acted upon at the meeting. You will be asked to consider and vote on a proposal to approve the divestiture of DSC’s cloud solutions business (the “Business”), which represents the sale of substantially all of DSC’s assets and will include the sale of all of the assets of DSC’s subsidiary, CloudFirst Technologies Corporation (“CloudFirst Delaware”), including the sale of 100% of the outstanding equity interests of CloudFirst Europe Ltd., together with its assets necessary to operate the Business, (the “Divestiture”). The proposal to approve the Divestiture is referred to as the “Divestiture Proposal”. The Board of Directors of DSC (the “Board”), after carefully considering the factors more fully described in the enclosed proxy statement, has unanimously determined the Divestiture to be fair to DSC’s shareholders, and declared the Divestiture advisable. The Board approved the Divestiture and the Purchase Agreement and recommends that DSC’s shareholders approve the Divestiture Proposal. You will also be asked to consider and vote on a proposal to: (1) elect each of the ten directors named herein for election to the Board; (2) ratify the appointment of Rosenberg Rich Baker Berman, P.A. as DSC’s independent registered public accounting firm for the fiscal year ending on December 31, 2025; (3) approve, on a non-binding advisory basis, the compensation of DSC’s named executive officers as disclosed in the accompanying proxy statement; (4) approve, on a non-binding advisory basis, the divestiture-related compensation that DSC’s named executive officers will receive upon consummation of the Divestiture; and (5) approve the adjournment of the 2025 Annual Meeting to a later date, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Divestiture Proposal. The enclosed proxy statement provides detailed information about the 2025 Annual Meeting, the Purchase Agreement and the Divestiture. A copy of the Purchase Agreement is attached as Annex A to the enclosed proxy Agreement and the Divestiture. DSC encourages you to read the proxy statement and its annexes, including the Purchase Agreement, carefully and in their entirety. You may also obtain more information about DSC from documents it files with the Securities and Exchange Commission from time to time. Your vote is very important regardless of the number of shares that you own. DSC urges you to read this proxy statement (and any documents incorporated into this proxy statement by reference) carefully. DSC cannot complete the Divestiture unless the Divestiture Proposal is approved by the affirmative vote of shareholders holding stock in DSC entitling them to exercise at least a majority of the voting power. The failure of any holder of record to vote in person at the 2025 Annual Meeting, to submit a signed proxy card or to grant a proxy electronically through the Internet or by telephone will have the same effect as a vote “AGAINST” the Divestiture Proposal. If you hold your shares in “street name,” the failure to instruct your bank, broker or other nominee how to vote your shares will have the same effect as a vote “AGAINST” the Divestiture Proposal. Whether or not you plan to attend the 2025 Annual Meeting in person, if you are a holder of record of DSC’s shares, please complete, sign, date and return, as prompt

View Full Filing

View this DEF 14A filing on SEC EDGAR