Data Storage (US:DTST)2025-11-19 13:57Financial Performance - Sales from continuing operations for the three months ended September 30, 2025, were $416,956, an increase of $91,657, or 28.2%, from $325,299 in the same period last year [107]. - Gross profit for the third quarter of 2025 was $198,499, an increase of $54,032, or 37.4%, compared to $144,467 in the third quarter of 2024, with a gross profit margin improvement to 47.6% from 44.4% [108]. - Income from continuing operations for the three months ended September 30, 2025, was $129,555, compared to a loss of $678,862 in the prior year period [112]. - Sales from continuing operations for the nine months ended September 30, 2025, were $1,057,651, an increase of $158,516, or 17.6%, from $899,135 in the same period last year [114]. - Gross profit for the nine months ended September 30, 2025, was $477,458, an increase of $83,007, or 21.0%, compared to $394,451 in the prior-year period, with a gross profit margin improvement to 45.1% from 43.9% [115]. - Loss from continuing operations, net of tax, was $1,313,172 for the nine months ended September 30, 2025, compared to a loss of $2,016,109 in the prior year period [117]. Expenses - Selling, general and administrative expenses increased by $312,875, or 31.8%, to $1,296,974 for the three months ended September 30, 2025, primarily due to a $429,483, or 396.4%, increase in non-cash stock-based compensation [111]. - Selling, general and administrative expenses for the nine months ended September 30, 2025, increased by $375,693, or 13.1%, to $3,242,833 from $2,867,140 for the same period last year [116]. Cash Flow - Cash used in operating activities of continuing operations was $1,145,839 for the nine months ended September 30, 2025, compared to $1,637,378 in the prior-year period [128]. - Cash provided by investing activities of continuing operations was $1,423,190 for the nine months ended September 30, 2025, compared to cash used of $58,722 in the same period of the prior year, driven by $35,634,291 in net cash received from the sale of the CloudFirst business [129]. - Cash used in financing activities of continuing operations was $824,051 for the nine months ended September 30, 2025, compared to cash provided of $88,732 in the prior-year period, primarily due to a $1,236,825 cash settlement of warrants [130]. - Cash used in discontinued operations was $248,633 for the nine months ended September 30, 2025, compared to cash provided of $692,356 in the prior-year period [131]. Strategic Actions - The company recognized a gain on the sale of discontinued operations of $17,846,470 for the nine months ended September 30, 2025, net of transaction costs [119]. - The company received net cash proceeds of approximately $38.1 million, net of $1.5 million placed in escrow and a working capital adjustment [121]. - Working capital increased to $46,749,512 as of September 30, 2025, up by $34,829,443 from $11,920,069 at December 31, 2024, primarily due to the divestiture of the CloudFirst business [127]. - The company plans to use the remaining proceeds from the tender offer for strategic investments and acquisitions in high-growth technology sectors, including GPU IaaS, AI-driven software, and cybersecurity [122]. Tax and Liquidity - The company has accrued $4.4 million in estimated income taxes payable related to the divestiture [121]. - The company’s liquidity assessment is based on current information, and any inaccuracies may require a reduction in selling, general, and administrative expenses [125]. - The company has not made any sales under the Equity Distribution Agreement with Maxim as of the report date [126]. Interest Income - Interest income for the three months ended September 30, 2025, was $193,347, a 20.3% increase from $160,770 in the same period last year [113].