Data Storage Corporation Announces Its Intention to Commence a Tender Offer

Rhea-AI Summary

Data Storage (Nasdaq: DTST) announced a cash tender offer to purchase up to 6,192,990 shares at $5.20 per share for an aggregate of up to $32,203,548. The company filed a Schedule TO and intends to commence the Offer on Dec 8, 2025, with the Offer set to expire at 12:00 midnight New York City time on Jan 7, 2026, unless extended. The Offer will be funded with cash on hand, including proceeds from the sale of its cloud services business completed on Sept 11, 2025. The company said it is refocusing on higher-growth areas including GPU IaaS, AI applications, cybersecurity, while Nexxis continues VoIP and dedicated internet services.

Positive

• $32,203,548 maximum capital returned to shareholders
• Offer not subject to financing condition
• Uses proceeds from Sept 11, 2025 divestiture to fund offer
• Non-tendering shareholders increase ownership percentage post-Offer

Negative

• Up to $32.2M of cash on hand will be deployed
• Tendered shares may be prorated, limiting accepted tenders
• Shareholders who tender will receive cash for shares, reducing float

Key Figures

Tender offer size 6,192,990 shares Maximum common shares targeted in cash tender offer

Tender price $5.20 per share Cash purchase price offered for common stock

Tender aggregate value $32,203,548 Maximum aggregate purchase price for tendered shares

Tender expiration Jan 7, 2026, 12:00 midnight NYC time Scheduled expiration of offer, proration and withdrawal rights

Cloud business sale price $40.0 million Base price for sale of cloud solutions business in Q3 2025

Pre-tax gain on sale $24.8 million Gain recognized on divestiture of cloud solutions business

Q3 2025 net income $16.8 million Net income attributable to common stockholders for Q3 2025

Marketable securities $45.5 million Balance as of Sept 30, 2025 after sale proceeds

Market Reality Check

$5.04 Last Close

Volume Volume 22,581 vs 20-day average 54,768 (relative volume 0.41), indicating muted pre-news activity. low

Technical Shares traded at $4.42, modestly above the 200-day MA of $4.03 ahead of the tender announcement.

Peers on Argus

Peers showed mixed moves: some gains (e.g., CYCU +13.39%, SAIH +6.13%) and some declines (e.g., CLPS -1.33%), with no clear sector-wide pattern mirroring DTST’s corporate action.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 19	Earnings & divestiture	Positive	+5.2%	Q3 2025 results and CloudFirst sale framed as transformative capital-raising event.
Nov 18	Conference scheduling	Neutral	+3.3%	Rescheduled Q3 business update call with dial-in and webcast details provided.
Nov 13	Conference postponement	Neutral	+0.7%	Postponed Q3 call to finalize accounting for CloudFirst divestiture effects.
Nov 05	Conference announcement	Neutral	+1.7%	Planned business update call on CloudFirst sale and strategic outlook.
Oct 20	Warrant repurchase	Positive	+4.1%	Repurchased July 2021 warrants and signaled intent to launch a tender offer.

Pattern Detected

Recent corporate and capital-structure actions (CloudFirst sale, warrant repurchase, planned tender) have generally coincided with positive 1-day price reactions.

Recent Company History

Over the last few months, Data Storage Corporation completed the sale of its CloudFirst/cloud solutions business and highlighted a base price of $40.0 million, generating a pre-tax gain of $24.8 million and net income of $16.8 million for Q3 2025. The company then simplified its capital structure by repurchasing July 2021 warrants for $2,049,388 and repeatedly telegraphed plans for a share tender offer. Today’s announced cash tender builds directly on this capital return and strategic refocus toward GPU IaaS, AI-driven software, cybersecurity, and telecom services.

Market Pulse Summary

The stock surged +12.2% in the session following this news. A strong positive reaction aligns with the company’s recent pattern, where corporate actions around the CloudFirst divestiture and capital returns produced favorable 1-day moves. The announced tender for up to 6,192,990 shares at $5.20 per share follows warrant repurchases and a previously flagged tender plan. Investors would still need to weigh that this buyback is funded from divestiture proceeds while the Nexxis continuing operations remained unprofitable as of Q3 2025.

Key Terms

tender offer financial

"announced its intention to commence a tender offer (the “Offer”) to purchase"

A tender offer is a proposal made by a person or company to buy shares from existing shareholders at a set price, usually higher than the current market value, within a specific time frame. It matters to investors because it can lead to a change in ownership or control of a company, and shareholders must decide whether to sell their shares at the offered price.

schedule to regulatory

"file a tender offer statement on Schedule TO with the U.S. Securities"

A phrase indicating that a company plans or intends to hold an event, publish information, or take an action at a specified future time, but that the timing is not guaranteed and may change. For investors it signals an expected milestone—like an earnings call, product launch, or filing—so think of it as a calendar note rather than a firm promise; timing shifts can affect trading, expectations, and planning.

offer to purchase regulatory

"including an Offer to Purchase and related Letter of Transmittal, that"

An offer to purchase is a formal proposal from one party to buy a specific amount of shares or assets from another party at a set price. It matters to investors because it signals interest in acquiring ownership and can influence the value or control of a company. Think of it as someone putting forward a clear, serious offer to buy something they find valuable.

letter of transmittal regulatory

"Offer to Purchase and related Letter of Transmittal, that the Company"

A letter of transmittal is a written form investors use when sending physical stock certificates or electronic ownership documents to a company or its agent to surrender shares, tender them in an offer, or claim payment or replacement securities. It acts like a packing slip that lists what is enclosed, gives instructions on how the transfer should be handled, and provides proof of the transaction—important for ensuring investors receive the correct payment or new securities without delay or dispute.

u.s. securities and exchange commission regulatory

"statement on Schedule TO with the U.S. Securities and Exchange Commission"

The U.S. Securities and Exchange Commission is a government agency responsible for overseeing the stock market and protecting investors. It sets rules to ensure that companies share truthful information and that trading is fair, helping to maintain trust in the financial system. This oversight is important because it helps prevent fraud and ensures that investors can make informed decisions.

voice over internet protocol technical

"continues to provide Voice over Internet Protocol (“VoIP”)/Unified Communications"

Voice over Internet Protocol (VoIP) is a technology that carries telephone calls as data over the internet instead of traditional phone lines, like sending a voice message through email rather than using a postal service. For investors, VoIP matters because it can lower communication costs, enable faster product rollout and scaling, create recurring revenue models, and influence competitive positioning and capital needs for companies that provide or rely on voice services.

unified communications technical

"Voice over Internet Protocol (“VoIP”)/Unified Communications and dedicated internet"

Unified communications is a set of tools and services that combine phone calls, video meetings, instant messaging, voicemail, and file sharing into a single, connected system so employees can communicate from one place—like a smartphone that brings all apps together. Investors care because it can lower communication costs, speed decision-making, improve customer response, and make a company more scalable and secure, all of which can affect productivity and profitability.

AI-generated analysis. Not financial advice.

MELVILLE, N.Y., Dec. 08, 2025 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (the “Data Storage” or “Company”), today announced its intention to commence a tender offer (the “Offer”) to purchase for cash up to 6,192,990 shares of its common stock, par value $0.001 per share, at a purchase price of $5.20 per share, less any applicable withholding taxes and without interest, for an aggregate purchase price of up to $32,203,548. The Company intends to distribute to stockholders and file a tender offer statement on Schedule TO with the U.S. Securities and Exchange Commission (the “SEC”), today, December 8, 2025.

The Company intends to commence the Offer today. The Offer, proration period, and withdrawal rights is scheduled to expire at 12:00 midnight, at the end of the day, New York City time, on Wednesday, January 7, 2026, unless the Offer is extended (the “Expiration Time”). Stockholders must validly tender and not validly withdraw their common stock before the Expiration Time to be eligible to participate in the tender offer. Tendered shares of common stock may only be withdrawn on or before the Expiration Time.

“Following the divestiture of our disaster recovery and CPU cloud hosting services business, we are rapidly advancing Data Storage’s next phase — with a strategic plan to invest in higher-growth areas where we believe we can build durable competitive advantages, including GPU Infrastructure-as-a-Service (IaaS), AI-driven software applications business process AI software, cybersecurity, and voice/data telecommunications,” said Chuck Piluso, Chairman and Chief Executive Officer. “We have also put in place and executed advisory engagements with specialists in these high-technology verticals to support our acquisition and partnership strategy. While this tender offer provides optional liquidity for stockholders who elect to participate, stockholders who do not tender will own a greater percentage of our outstanding shares following consummation of the Offer.”

Purpose of the Offer; No Recommendation

After evaluating various alternatives, expected capital requirements and legal restrictions, the Company believes the Offer represents an attractive opportunity to return capital to stockholders who elect to tender their shares, subject to the terms and conditions of the Offer. Additionally, stockholders who do not participate in the Offer will experience an automatic increase in their relative percentage interest in the Company following completion of the Offer.

Neither the Company nor any member of its Board of Directors or the Special Committee, nor the Information Agent or Depositary, makes any recommendation to any stockholder as to whether to tender or refrain from tendering any shares. Stockholders should carefully evaluate all information in the Offer and are urged to consult with their financial and tax advisors.

Funding and Strategic Execution

The Company intends to pay for the purchase of tendered shares, including related fees and expenses, with cash on hand including proceeds received from the sale of its cloud services business, which was completed on September 11, 2025. The Offer will not be subject to a financing condition.

Following the closing of the divestiture, Data Storage is no longer engaged in providing cloud-based disaster recovery or cloud CPU hosting business solutions. Through its subsidiary, Nexxis, the Company continues to provide Voice over Internet Protocol (“VoIP”)/Unified Communications and dedicated internet connectivity as part of its one-stop solution set.

Tender offer materials; Where to get information

The tender offer described in this press release has not yet commenced. This press release is for information purposes only, and is not an offer to purchase or the solicitation of an offer to sell any shares of the Company’s common stock. The solicitation of offers to purchase shares of the Company’s common stock will be made only pursuant to the tender offer documents, including an Offer to Purchase and related Letter of Transmittal, that the Company intends to distribute to stockholders and file as part of a tender offer statement on Schedule TO with the SEC, today, December 8, 2025.

THE COMPANY’S STOCKHOLDERS ARE URGED TO READ THE TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, LETTER OF TRANSMITTAL AND RELATED TENDER OFFER DOCUMENTS) WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY THE COMPANY WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION CONCERNING THE TERMS OF THE TENDER OFFER.

Once the tender offer is commenced, copies of the tender offer statement on Schedule TO, the Offer to Purchase, the Letter of Transmittal and other documents that the Company will be filed with the SEC, will be distributed by the Company to the Company’s stockholders at no expense to them and will also be available to stockholders free of charge at the SEC website at www.sec.gov.

Questions and requests for assistance or additional copies of the Offer materials may be directed to the Information Agent for the Offer: Broadridge Corporate Issuer Solutions, LLC, 51 Mercedes Way, Attn: BCIS IWS, Edgewood, NY 11717, (856) 793-5068, Email: shareholder@broadridge.com.

About Data Storage Corporation

Data Storage Corporation (Nasdaq: DTST), through its subsidiary, Nexxis, Inc., provides Voice over Internet Protocol (“VoIP”)/Unified Communications and dedicated internet connectivity as part of DTST’s one-stop solution set. Once the tender offer is complete, DTST plans to invest in and support businesses, including, but not limited to, GPU Infrastructure-as-a-Service (IaaS), AI-driven software applications, cybersecurity, and voice/data telecommunications. The Company’s mission is to build sustainable, recurring revenue streams while maintaining financial discipline and strategic focus. For more information, visit www.dtst.com.

Safe Harbor Provision

This press release 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 could 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 the foregoing. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and include statements regarding the Company’s intention to commence a tender offer and to distribute to stockholders and file a tender offer statement on Schedule TO with the U.S. Securities and Exchange Commission (the “SEC”);rapidly advancing Data Storage’s next phase; investing in higher-growth areas where the Company can build durable competitive advantages, including GPU Infrastructure-as-a-Service (IaaS), AI-driven software applications, business process AI software, cybersecurity, and voice/data telecommunications;; the Offer representing an attractive opportunity to return capital to stockholders who elect to tender their shares; plans to invest in and support businesses, including, but not limited to, GPU Infrastructure-as-a-Service, AI-driven software applications, cybersecurity, and voice/data telecommunications; and building sustainable, recurring revenue streams while maintaining financial discipline and strategic focus.. Important factors that could cause actual results to differ materially from current expectations include the Company’s ability to advance its strategy in high-growth technology verticals; the Company’s ability to invest in high-growth areas where it can build durable competitive advantages, including GPU Infrastructure-as-a-Service (IaaS), AI-driven software applications, business process AI software, cybersecurity, and voice/data telecommunications; and the Company’s ability to build sustainable, recurring revenue streams while maintaining financial discipline and strategic focus. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as 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.

Contact:
Crescendo Communications, LLC
212-671-1020
DTST@crescendo-ir.com

FAQ

What are the key terms of Data Storage's tender offer (DTST) announced Dec 8, 2025?

The Offer is to buy up to 6,192,990 shares at $5.20 per share, up to $32,203,548, expiring Jan 7, 2026.

How will Data Storage (DTST) fund the Dec 8, 2025 tender offer?

The company intends to pay with cash on hand, including proceeds from the cloud services sale completed on Sept 11, 2025.

What happens to shareholders who do not tender DTST shares in the offer?

Shareholders who do not tender will own a larger percentage of outstanding shares following completion of the Offer.

When does the Data Storage (DTST) tender offer expire and can shares be withdrawn?

The Offer is scheduled to expire at 12:00 midnight New York City time on Jan 7, 2026; tendered shares may be withdrawn on or before that time.

Will Data Storage's (DTST) tender offer depend on outside financing?

No; the company stated the Offer will not be subject to a financing condition.

Where can DTST shareholders get the official tender offer documents filed Dec 8, 2025?

Tender offer materials will be available free on the SEC website (www.sec.gov) and distributed to shareholders at no expense.