Business Context and Reporting Period
Data Storage Corporation (Nevada) filed this Form 8-K on June 17, 2010, reporting the completion of an asset acquisition. The Company, through its wholly-owned subsidiary Data Storage Corporation, Delaware ("Data Storage DE"), entered into an Asset Purchase Agreement with SafeData, LLC ("SafeData") to acquire SafeData's business assets.
Key Financial Metrics and Transaction Details
The transaction involves the acquisition of SafeData's end-user customer base, current and fixed assets, contracts, cash, accounts receivable, and intellectual property. The Company also assumed current liabilities arising from the business.
- Total Purchase Price: $3,000,000
- Cash Consideration: $2,000,000
- Stock Consideration: $1,000,000 (valued at $0.35 per share)
- Shares Issued: 2,857,142 shares of Common Stock
- Deferred Payment: A portion of the purchase price is subject to holdback and contingency clauses.
The filing does not provide specific revenue, profit, cash flow, margin, or debt figures for the Company or the acquired entity.
Material Changes and Corporate Actions
Key changes resulting from this filing include:
- Asset Expansion: Acquisition of SafeData's customer base and related assets.
- Equity Dilution: Issuance of 2,857,142 unregistered shares of Common Stock to SafeData.
- Management Changes: Peter Briggs, President of SafeData, entered into an employment agreement with the Company. Lawrence E. Putterman was appointed to the Company's Board of Directors.
Guidance, Risks, and Unusual Items
The filing does not contain forward-looking guidance, outlook, or specific risk factors beyond standard transaction contingencies. The stock issuance was made pursuant to Section 4(2) of the Securities Act of 1933, exempt from registration as it did not involve a public offering. The shares are restricted under Rule 144 and bear a legend preventing immediate redistribution.
Investor Verification Checklist
- Verify the exact amount of the deferred purchase price and the specific conditions of the holdback clauses in the Asset Purchase Agreement (Exhibit 10.1).
- Confirm the total number of outstanding shares post-transaction to assess the dilution impact of the 2,857,142 new shares.
- Review the Employment Agreement (Exhibit 10.2) for details on Peter Briggs' compensation and tenure.
- Assess the quality and collectability of the acquired accounts receivable and the stability of the acquired customer base.