Data Storage Corporation Provides Letter to Shareholders Highlighting 2026 Corporate Strategy

Rhea-AI Summary

Data Storage Corporation (Nasdaq: DTST) provided a shareholder letter outlining its 2026 corporate strategy and near-term steps tied to a Tender Offer expected to complete on or about January 12, 2026. The plan targets a disciplined, hybrid acquisition program prioritizing technology consolidation of firms with annual recurring revenue, high margins, and established customers across managed IT, cybersecurity monitoring, telecom/UCaaS, compliance-as-a-service, document security, access-control, healthcare BPO, and niche micro-SaaS+ services.

The company will pursue GPU/AI and automation investments only under strict valuation criteria, has assembled an experienced advisory team, and intends operational changes including a centralized inbound marketing engine, shared CRM, cross-selling, and unified operational standards to support consolidation and scale.

Positive

• Tender Offer expected completion on or about January 12, 2026
• Strategy targets recurring-revenue, high-margin technology services
• Established an experienced advisory team to support diligence and direction
• Operational plan to deploy a shared CRM and centralized inbound marketing

Negative

• Final cash availability remains uncertain until Tender Offer completion on Jan 12, 2026
• Primary emphasis on consolidation may limit near-term exposure to high-growth frontier AI opportunities

Market Reality Check

$5.05 Last Close

Volume Volume 89,837 is below the 20-day average of 141,979, suggesting a subdued pre-news trading backdrop. low

Technical Shares at $5.01 were trading above the 200-day MA of $4.08 and about 7.9% below the 52-week high of $5.44 before this letter.

Peers on Argus

Peers showed mixed moves, with declines in VEEA (-3.35%), CLPS (-2.68%), CYCU (-5.36%) and gains in GLE (1.46%) and SAIH (4.41%), pointing to stock-specific rather than sector-driven dynamics for DTST.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 08	Tender offer announcement	Positive	+12.2%	Announced cash tender offer using divestiture proceeds to repurchase shares.
Nov 19	Earnings & divestiture	Positive	+5.2%	Reported Q3 results and highlighted transformative CloudFirst sale and refocus.
Nov 18	Call rescheduling	Neutral	+3.3%	Rescheduled Q3 business update call providing clarity on timing for investors.
Nov 13	Call postponement	Neutral	+0.7%	Postponed Q3 update call to finalize accounting for CloudFirst divestiture.
Nov 05	Call announcement	Positive	+1.7%	Announced business update call on CloudFirst sale and strategic outlook.

Pattern Detected

Recent corporate and strategic updates, including the tender offer and CloudFirst divestiture, have generally coincided with positive next-day price reactions.

Recent Company History

Over the last several months, DTST has focused on reshaping its business and capital structure. The sale of its CloudFirst/cloud solutions business and related Q3 2025 results unlocked capital and drove a tender offer plan to repurchase up to 85% of outstanding shares. Multiple conference calls and updates around this divestiture and strategy were followed by positive price moves. Today’s 2026 strategy letter builds on that pivot by detailing how DTST plans to redeploy capital into acquisitions and technology-enabled services after the tender offer process clarifies available cash.

Market Pulse Summary

This announcement outlines DTST’s 2026 strategy, tying capital deployment to completion of its tender offer and emphasizing acquisitions in recurring-revenue, technology-enabled services. It builds on recent steps, including the CloudFirst divestiture and associated tender offer plan, while highlighting cross-selling, centralized marketing, and unified operations. Investors may watch how available cash after the offer supports disciplined deal-making, the balance between consolidation and selective AI/GPU investments, and progress toward improving margins and recurring revenue stability.

Key Terms

tender offer financial

"as we progress through the Tender Offer process, expected to be completed on or about January 12th"

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.

hybrid acquisition strategy financial

"Our 2026 plan centers on a disciplined hybrid acquisition strategy that focuses on technology consolidation"

A hybrid acquisition strategy is a company’s plan to grow by using a mix of deal types and payment methods—for example combining small “bolt-on” purchases with larger transformational buys, or paying with both cash and stock. For investors it signals a balanced approach to expansion and risk management: like using different tools from a toolbox, it can speed growth while preserving cash, but also creates complexity in integration and future finances.

annual recurring revenue financial

"acquire companies with solid annual recurring revenue, high margins, established customer bases"

Annual recurring revenue is the predictable amount of money a company expects to earn each year from ongoing customer subscriptions or contracts. It helps businesses understand how much steady income they can count on, much like a subscription service that charges customers every month or year. This figure is important because it shows the company's stability and growth potential.

UCaaS technical

"technology-enabled service providers such as managed IT, cybersecurity monitoring, telecom and UCaaS platforms"

Unified Communications as a Service (UCaaS) is a cloud-based bundle of business communication tools — such as phone calling, video meetings, messaging, and voicemail — delivered over the internet instead of on-site hardware. For investors, UCaaS matters because it shifts companies from buying and maintaining equipment to paying recurring subscription fees, creating predictable revenue for providers and signaling how widely businesses are adopting flexible, remote-ready communications, which can affect growth and valuation.

compliance-as-a-service technical

"prioritize acquisitions in areas such as compliance-as-a-service, document security and digitization"

A subscription service that handles a company’s legal and regulatory obligations using software and expert support, delivering tools for monitoring, reporting, and recordkeeping on an ongoing basis. Like hiring a specialized guard to manage locks, cameras and incident reports, it reduces the chance of costly violations, offers predictable compliance costs, and can scale with growth — factors investors watch because they affect regulatory risk, fines, and operational reliability.

healthcare BPO technical

"prioritize acquisitions in areas such as ... access-control, healthcare BPO, and niche micro-SaaS+ services"

Healthcare BPO is the practice of hiring outside firms to handle routine administrative and operational tasks for medical providers—such as medical billing, claims processing, patient scheduling, coding, and collections. Investors watch healthcare BPO because it can reduce costs and speed cash flow for providers while creating steady, contract-based revenue for the service companies; think of it as outsourcing housekeeping so clinicians can focus on care and investors can track margins and growth.

micro-SaaS technical

"prioritize acquisitions in areas such as ... healthcare BPO, and niche micro-SaaS+ services"

A micro-SaaS is a small, focused software business that delivers a single online service or app to users on a subscription basis, usually operated by a solo founder or a very small team. It matters to investors because these businesses often have steady, predictable recurring revenue and low overhead—think of a neighborhood specialist shop rather than a big department store—offering steady cash flow and high profit margins, though with more limited scale.

CRM technical

"enhance cross-selling capabilities, leverage a shared CRM, and continue implementing unified operational standards"

Customer relationship management (CRM) is the set of tools, practices and software companies use to track and manage interactions with customers and potential customers, like an organized digital address book combined with a sales coach. It matters to investors because effective CRM systems can boost sales, improve customer retention and lower marketing costs, which directly affects revenue growth and profit margins — key drivers of a company’s value.

AI-generated analysis. Not financial advice.

MELVILLE, N.Y., Dec. 18, 2025 (GLOBE NEWSWIRE) -- Data Storage Corporation (Nasdaq: DTST) (“Data Storage” or the “Company”), today provided a letter to shareholders from its CEO, Chuck Piluso.

Dear Valued Shareholders,

As we look ahead to 2026, I would like to outline the strategic direction we plan to pursue while noting that as we progress through the Tender Offer process, expected to be completed on or about January 12^th, we will gain a clear understanding of our available cash and can begin executing the plan.

2026 Strategy Outline

Our 2026 plan centers on a disciplined hybrid acquisition strategy that focuses on technology consolidation and the acquisition of companies at attractive multiples, while remaining selective in pursuing additional investments across the technology market.

We intend to evaluate acquisition opportunities including technology-enabled service providers such as managed IT, cybersecurity monitoring, telecom and UCaaS platforms. We plan to concentrate on these areas because we see ripe opportunities to acquire companies with solid annual recurring revenue, high margins, established customer bases, and clear pathways to scale.

These organizations operate in a stable, mission-critical layer of the technology stack—powering and securing business operations without depending on frontier research or high-intensity computing. They deliver proven, recurring-revenue services such as unified communications, data protection, compliance support, networking, and other essential technology services.

We believe these types of companies offer stable earnings, strong gross margins, and highly fragmented markets, making them attractive targets for disciplined consolidation and long-term value creation.

Primary Focus: Consolidation

We intend to prioritize acquisitions in areas such as compliance-as-a-service, document security and digitization, access-control, healthcare BPO, and niche micro-SaaS+ services.

Secondary Focus: Selective Investments

We remain committed to evaluating companies that utilize GPUs, AI workflow tools, and automation platforms—pursuing them only when aligned with disciplined valuation criteria. To support our efforts, we have established an experienced advisory team that has the background to assist us in direction and diligence.

Why This Benefits Shareholders

• Stable recurring revenue
• Attractive valuations
• Lower integration risk
• Strong cross-selling opportunities
• Flexibility to invest in technology market

Operational Focus for 2026

To support this strategy, we plan to further repeat our centralized inbound marketing engine, enhance cross-selling capabilities, leverage a shared CRM, and continue implementing unified operational standards across business units.

Closing

Our approach remains steady—grow where economics make sense, preserve optionality, and continue creating long-term shareholder value.

Sincerely,
Chuck Piluso
Chief Executive Officer & Chairman
Data Storage Corporation

About Data Storage Corporation

Data Storage Corporation (Nasdaq: DTST), through its subsidiary today, 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 strategic plan the Company plans to pursue; the Tender Offer process being completed on or about January 12th; gaining a clear understanding of available cash and begin executing the plan; centering on a disciplined hybrid acquisition strategy that focuses on technology consolidation and the acquisition of companies at attractive multiples, while remaining selective in pursuing additional investments across the technology market; evaluating acquisition opportunities including technology-enabled service providers such as managed IT, cybersecurity monitoring, telecom and UCaaS platforms; seeing ripe opportunities to acquire companies with solid annual recurring revenue, high margins, established customer bases, and clear pathways to scale; companies offering stable earnings, strong gross margins, and highly fragmented markets, making them attractive targets for disciplined consolidation and long-term value creation; prioritizing acquisitions in areas such as compliance-as-a-service, document security and digitization, access-control, healthcare BPO, and niche micro-SaaS+ services; remaining committed to evaluating companies that utilize GPU’s, AI workflow tools, and automation platforms—pursuing them only when aligned with disciplined valuation criteria; benefiting shareholders by providing stable recurring revenue, attractive valuations, lower integration risk, strong cross-selling opportunities and flexibility to invest in technology market; plans to further repeat the Company’s centralized inbound marketing engine, enhance cross-selling capabilities, leverage a shared CRM, and continue implementing unified operational standards across business units; growing where economics make sense, preserving optionality, and continuing creating long-term shareholder value; 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 implement a disciplined hybrid acquisition strategy that focuses on technology consolidation and the acquisition of companies at attractive multiples, while remaining selective in pursuing additional investments across the technology market; the Company’s ability to complete the Tender Offer process as expected; the Company’s ability to invest in and support businesses including technology-enabled service providers such as managed IT, cybersecurity monitoring, telecom and UCaaS platforms; the Company’s ability to acquire companies with solid annual recurring revenue, high margins, established customer bases, and clear pathways to scale; the Company’s ability to benefit stockholders by providing stable recurring revenue, attractive valuations, lower integration risk, strong cross-selling opportunities and flexibility to invest in technology market; the Company’s ability to further repeat the Company’s centralized inbound marketing engine, enhance cross-selling capabilities, leverage a shared CRM, and continue implementing unified operational standards across business units; the Company’s ability to grow where economics make sense, preserve optionality, and continue to creating long-term stockholder value; 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.

Additional Information

The press release is neither an offer to purchase nor a solicitation of an offer to sell securities. The Offer for the shares of Common Stock described in this press release is described in a tender offer statement on Schedule TO the Company filed with the Securities and Exchange Commission (“SEC”) on December 8, 2025.

THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF THE COMPANY’S COMMON STOCK ARE URGED TO READ THESE DOCUMENTS CAREFULLY (AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF SHARES OF THE COMPANY’S COMMON STOCK SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES.

The Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents have been made available to all holders of shares of the Company’s Common Stock at no expense to them. The tender offer materials are available for free at the SEC’s website at www.sec.gov or by accessing the Investor Relations section of the Company’s website at www.dtst.com.

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

FAQ

What did Data Storage Corporation (DTST) announce for 2026 strategy?

DTST said it will pursue a disciplined hybrid acquisition strategy focused on technology consolidation and companies with recurring revenue, while evaluating AI/GPU assets only under strict valuation criteria.

When is the DTST Tender Offer expected to be completed?

The company expects the Tender Offer to be completed on or about January 12, 2026.

How will DTST’s 2026 plan affect shareholders and capital deployment?

Management plans to use post-Tender Offer cash clarity to fund selective acquisitions aimed at stable recurring revenue and cross-selling to create long-term shareholder value.

Which acquisition areas is DTST prioritizing in 2026?

Primary targets include compliance-as-a-service, document security, access-control, healthcare BPO, and niche micro-SaaS+ services; secondary focus includes selective GPU/AI and automation plays.

Will DTST change operations to support acquisitions in 2026?

Yes—DTST plans to expand a centralized inbound marketing engine, implement a shared CRM, enhance cross-selling, and apply unified operational standards across units.