Data Storage Corporation

Good morning, ladies and gentlemen, and welcome to the Data Storage Corporation first quarter 2022 conference call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Waltman. Sir, the floor is yours.

Thank you. Good morning, everyone, and welcome to Data Storage Corporation's 2022 first quarter and March 31, 2022 business update conference call. On the call with us this morning are Chuck Peluso, Chairman and Chief Executive Officer, and Chris Panagiotakos, Chief Financial Officer. The company issued a press release this morning containing first quarter 2022 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before we begin, I'd like to remind listeners that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that cause actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words believes, expects, anticipates, intends, projects, estimates, Plans and similar expressions or future or conditional verbs such as will, should, would, may, and could are generally forward-looking in nature and not historical facts, although not all forward-looking statements include foregoing. Although the company believes the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results differ materially from the company's expectations. include but are not limited to the company's ability to leverage the scalability and performance of flagship solutions, the company's ability to benefit from the IBM Cloud migration underway, the company's ability to position itself for future profitability, and the company's ability to maintain its NASDAQ listing. These risks should not be construed as exhaustive and should be read together with other cautionary statements included in the company's quarterly report on Form 10-Q for the quarter ended March 31, 2022, an annual report on Form 10-K and current reports on Form 8-K, followed with the Securities and Exchange Commission. Any forward-looking statements speak only of the date on which it was initially made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or otherwise. I'd now like to turn the call over to Chuck Peluso. Please go ahead, Chuck.

Thanks, David. Good morning, everyone. I'm pleased to report that our growth has continued into the first quarter of 2022. We have witnessed increased sales as well as growth in monthly cloud subscription services. As a result, revenue was up 236% from $2.6 million to $8.7 million for the first quarter of 2022. At the same time, we achieved positive net income and generated over $600,000 of EBITDA. while investing in our infrastructure, sales, and marketing. As you can see, we have built a highly scalable business model, and as we continue to grow revenue, we have the potential to generate significant profitability. We've been providing reliable, efficient IT solutions, including cloud infrastructure, hybrid cloud solutions, disaster recovery, IBM systems and storage, software, cybersecurity, and other managed services focused on the IBM Power Community across a variety of industries. Our DSC website that directly focuses on IBM Power Systems migration to the cloud welcomed 55,000 visitors in 2021, a clear indication that this migration is now underway. Some surveys have indicated only 15% of users are on a cloud-based solution. This migration is underway. We have the right offering at the right time to deliver critically important cloud technology solutions to a niche multi-billion dollar market estimated at $48 billion in the USA and Canada alone. Towards this end, we have invested millions to establish ourselves as a leader within the IBM Power Cloud infrastructure and disaster recovery marketplace. As anticipated, the flagship merger is proving to be highly synergistic with our existing operations. Completing the flagship merger has positioned us as a comprehensive one-stop provider with the ability to cross-sell solutions across our respective clients. We entered 2022 with a baseline annual recurring revenue of $12 million. 2022 began with a notable multimillion-dollar contract with a highly recognizable professional sports franchise. We were selected based on scalability performance of our solutions and believe this important contract illustrates the momentum we are gaining in the market. We recently announced the expansion of Flagship's partnership with PFL, the Professional Fighting League. PFL is pioneering the future of MMA proprietary technology, utilizing data analytics and AI that enables showcasing the sport like never before. They sought out our solutions and data scientists to assist in developing an unmatched MMA fan experience. Working with us, PFL has elevated the standard for measuring fighter performance. The insights gathered from smart cage technology and cagenomics data will be enhanced with IBM Watson machine learning to showcase what is taking place inside the cage and deliver an accurate matchup outcome predictions for MMA fans around the world. Our business development teams focusing on industry verticals is paying off. We have increased our outstanding proposals, of which more than half offer subscription-based prospects. At the same time, we have maintained contract renewal rate of 94%, reinforcing the quality of our services, technical team, and customer loyalty. We have placed a heavy emphasis on growing subscription sales, which provide long-term high margin revenue streams. We have witnessed particularly strong growth within our cloud infrastructure and disaster recovery services. In addition, we are increasing our sales force, expanding our marketing initiatives, and investing in highly skilled personnel and infrastructure to support our continued organic growth. It's worth noting that we did benefit from a large equipment sale in the first quarter. Equipment sales can lead to fluctuations from quarter to quarter, which is another reason we are placing heavy emphasis on subscription sales. That said, when opportunities exist for a large equipment sale, we'll certainly take advantage of those opportunities as we did in the first quarter. To summarize, we have been executing on our strategy. We have completed meaningful acquisitions entered into strategic partnerships that provide us more inclusive features and services for our clients, demonstrating our commitment to offering customers the most cutting-edge and comprehensive technologies. We have also maintained a solid balance sheet, with over $13 million of cash and cash equivalents as of March 31, 2022, and no long-term debt, providing us flexibility to take advantage of the opportunities within this emerging multi-billion dollar market. We have a strong team, robust proposal pipeline, and limited competition. As a result, we believe we are well positioned to drive increased profitability, giving a highly scalable business model. With that, I'd like to turn it over to Chris, our CFO, to discuss the first quarter financials. Chris?