10-K/A: Data Storage Corporation Files Amendment to 10-K to Include Part III Information

Data Storage Corporation files an amendment to its 2024 Annual Report on Form 10-K to include information required by Part III regarding directors, executive officers, and corporate governance.

Summary

• Data Storage Corporation is filing Amendment No. 1 on Form 10-K/A to amend its Annual Report on Form 10-K for the year ended December 31, 2024.
• The amendment is filed to include information required by Part III of the Annual Report on Form 10-K, which was intended to be incorporated by reference to the Company's definitive proxy statement relating to the 2025 annual meeting of stockholders.
• The proxy statement will not be filed within 120 days after the end of the Company's fiscal year ended December 31, 2024.
• The amendment includes new certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
• The Company has not modified or updated the Original 10-K or the financial statements included therein, except as described.
• The amendment includes information about the company's directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and principal accountant fees and services.
• The Board of Directors consists of ten members.
• With the exception of Charles M. Piluso, Harold J. Schwartz and Thomas C. Kempster, the Board has determined that all of its present directors and its former directors are independent, in accordance with the Nasdaq Listing Rules.
• The Board of Directors has a standing Audit Committee, Compensation Committee, and Nominating & Corporate Governance Committee.
• The Company has adopted a Code of Ethics and Conduct applicable to its Directors, Officers, and Employees.
• The Company has adopted a clawback policy which allows it to recover performance-based compensation from a current or former executive officer in the event of an Accounting Restatement.
• The Company has adopted a second amended and restated insider trading policy (the Trading Policy) that is designed to promote compliance with federal securities laws, rules and regulations, as well as the rules and regulations of the Nasdaq Stock Market.

Sentiment

Score: 6

Explanation: The document is primarily a regulatory filing, so the sentiment is neutral. The inclusion of information about executive compensation and corporate governance is standard practice.

Positives

• The company has a diverse and experienced Board of Directors.
• The company has established key committees to oversee critical functions such as audit, compensation, and corporate governance.
• The company has implemented a Code of Ethics and Conduct to ensure ethical behavior.
• The company has a clawback policy to recover performance-based compensation in case of accounting restatements.
• The company has an insider trading policy to prevent illegal trading activities.

Negatives

• Certain directors and executive officers filed Section 16(a) reports late.
• Charles M. Piluso, Harold J. Schwartz and Thomas C. Kempster are not considered independent directors due to their employment with the company.

Risks

• Failure to maintain compliance with Nasdaq Listing Rules could result in delisting.
• Related party transactions could raise concerns about conflicts of interest.
• Delays in filing required reports with the SEC could result in penalties.

Future Outlook

The document does not contain a specific future outlook, but it does outline the terms of employment agreements and equity awards for key executives, which suggests a focus on retaining and incentivizing leadership.

Industry Context

This filing is a standard regulatory requirement for publicly traded companies and does not provide specific insights into the company's performance relative to its industry. The information provided focuses on corporate governance and executive compensation, which are common areas of scrutiny for investors.

Related Party Transactions

• On March 4, 2021, the Company entered into a new equipment lease agreement with Systems Trading Inc. (Systems Trading), a technology leasing company established by Mr. Schwartz, where he currently serves as Chief Executive Officer and President, effective April 1, 2021.
• The Company received funds of $31,352 and $39,172 during the years ended December 31, 2024, and 2023, respectively from Nexxis Capital LLC, a company owned by Charles Piluso and Harold Schwartz.
• On January 1, 2022, the Company entered into a lease agreement with Systems Trading effective January 1, 2022.
• On April 1, 2022, the Company entered into a lease agreement with Systems Trading effective May 1, 2022.

Stakeholder Impact

• Shareholders receive additional information about the company's directors, executive officers, and corporate governance.
• Employees are subject to the company's Code of Ethics and Conduct and insider trading policy.
• Executive officers are subject to the clawback policy, which could impact their compensation in the event of an accounting restatement.

Next Steps

• The Company will file its definitive proxy statement relating to the 2025 annual meeting of stockholders at a later date.
• The Company will continue to file reports with the SEC as required.

Key Dates

Keywords

directors, executive officers, corporate governance, compensation, stock ownership, related transactions, audit fees, independence, Sarbanes-Oxley, Nasdaq, SEC