Data Storage (DTST) 8-K/A Entry into a Material Definitive Agreement

Exhibit 99.3

Pro Forma Consolidated Condensed Financial Statements (Unaudited)

The following unaudited pro forma consolidated condensed financial statements were prepared using the historical financial statements of Data Storage Corporation (“Data Storage”) and Safe Data, LLC. (“Safe Data”). Data Storage acquired the net assets of Safe Data in June 2010. This information should be read in conjunction with, and is qualified in its entirety by, the financial statements and related notes of Data Storage and Safe Data.

The accompanying unaudited pro forma consolidated condensed financial statements give pro forma effect to Data Storage’s acquisition of Safe Data’s net assets. Total purchase consideration of $4,505,882 consisted of the assumption of $1.7 million of Safe Data’s indebtedness. The $3,000,000 cash portion of the purchase consideration was financed from the issuance of convertible debt and equity financing by Data Storage.

The acquisition will be accounted for under the purchase method of accounting. Accordingly, the amount of the consideration paid is allocated to assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The unaudited pro forma consolidated condensed financial statements reflect the preliminary allocation of the excess of such consideration paid over net assets acquired to goodwill and certain identifiable intangible assets, (customer list and non-compete agreements) with an estimated weighted average life of 5 and 4 years, respectively.

The following is a summary of the preliminary purchase price allocation as of June 17, 2010

Purchase Price Paid
Cash paid to sell, less credit threshold adjustment of $70,047	$	1,229,952
Stock issued to seller		850,000
Holdback price adjustments		779,437
Liabilities assumed		1,646,493
		4,505,882
Less: tangible assets acquired		(1,079,678	)
	$	3,426,204
Allocation of Purchase Price:
Intangible assets	$	1,280,627
Goodwill		2,145,577
Total Purchase price	$	3,426,204

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The unaudited pro forma consolidated condensed balance sheet as of March 31, 2010 has been prepared as if the acquisition of Safe Data occurred on March 31, 2010. The unaudited pro forma consolidated condensed statements of operations for the three months ended March 31, 2010 and the year ended December 31, 2009 has been prepared as if the Safe Data acquisition had occurred on January 1, 2009.

These unaudited pro forma consolidated condensed financial statements are not necessarily indicative of the financial position or results of operations that would have occurred had the transaction been effected on the assumed dates. Additionally, future results may vary significantly from the results reflected in the unaudited pro forma combined statement of operations due to changes in prices, future transactions and other factors. These statements should be read in conjunction with our audited consolidated financial statements and the related notes for the year ended December 31, 2009 included in our 2009 Form 10-K, the current report on Form 10-Q filed on August 23, 2010, and the audited and unaudited financial statements of Safe Data included herein. The pro forma adjustments, as described in the notes to unaudited pro forma consol idated condensed financial statements, are based upon available information and certain assumptions that our management believes are reasonable.

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Data Storage Corporation

Proforma Consolidated Condensed Balance Sheet (Unaudited)

March 31, 2010

	Data Storage			Safe Data			Pro Forma Adjustments			Notes		Data Storage and Safe Data
ASSETS
Current Assets:
Cash and cash equivalents	$	65,386		$	150		$	69,897			a, b, c, d	$	135,433
Accounts Receivable, net		87,631			163,090			-					250,721
Inventory		6,500			-			-					6,500
Deferred compensation		70,535			-			-					70,535
Prepaid expenses		11,196			23,426			-					34,622
Receivable from Member		-			138,446			(138,446	)		a		-
Other current assets		-			16,333								16,333
Total current assets		241,248			341,445			(68,549	)				514,144
Property, plant and equipment, net		275,712			745,446			-					1,021,158
Goodwill		-			-			1,789,877			d		1,789,877
Intangible assets		133,481			34,029			1,246,598			a, d		1,414,108
Other assets		61,066			11,802			-					72,868
Total Assets	$	$711,507		$	1,132,722		$	2,967,926				$	4,812,155
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses	$	$117,989		$	405,058		$	(24,931	)		a	$	498,116
Credit line payable		99,970			350,000			(350,000	)		a		99,970
Due to related party		39,218			-			-					39,218
Dividend payable		87,500			-			-					87,500
Deferred revenue		11,571			55,085			-					66,656
Leases payable		-			482,326			-					482,326
Note payable		-			15,000			(15,000	)		a		-
Loans payable		-			125,000			(125,000	)		a		-
Convertible Debt		-						87,363			c		87,363
Contingent consideration in SafeData acquisition		-			-			779,437			d		779,437
Total current liabilities		356,248 56			1,432,469			351,869					2,140,586
Long term liabilities		631,015			588,673			(335,000	)		a		884,688
Total liabilities		987,263			2,021,142			16,869					3,025,274
COMMITMENTS AND CONTIGENCIES		-
STOCKHOLDERS’ EQUITY
Preferred Stock		1,402			-			-					1,402
Common stock		13,670			-			3,457			b, d		17,127
Additional paid-in capital		4,812,040			-			2,059,180			b, c, d		6,871,220
Accumulated deficit/Members’ Deficit		(5,102,868	))		(888,420	)		888,420			a, d		(5,102,868	)
Total stockholders’ equity		(275,756	)		(888,420	)		2,951,057					1,786,881
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	711,507		$	1,132,722		$	2,967,926				$	4,812,155

See notes to pro forma consolidated condensed financial statements.

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Data Storage Corporation

Proforma Consolidated Condensed Statement of Operations(Unaudited)

Three Months Ended March 31, 2010

(in thousands, except for per share data)	Data Storage			Safe Data			Pro forma Adjustments			Notes		Data Storage and Safe Data
Net sales	$	243,692		$	742,614			-				$	986,306
Cost of sales		164,320			359,854			-					524,174
Gross profit		79,372			382,760			-					462,132
Operating expenses		275,007			269,820			26,795			e		571,622
Operating (loss) income		(195,635	)		112,940			(26,795	)				(109,490	)
Other income
Interest expense		1,357			26,407			91,610			f		119,374
Interest and other income		-			(2,491	)		-					(2,491	)
Total other expense		1,357			23,915			91,610					116,883
Loss before income tax provision		(196,992	)		89,024			(118,405	)				(226,373	)
Income tax provision		-			-			-			g		-
Net loss	$	(196,992	)	$	89,024		$	(118,405	)			$	(226,373	)
Preferred Stock Dividend		(12,500	)										(12,500	)
Net Loss Available to Common   Shareholders	$	(209,492	)									$	(238,873	)
Loss per share
Basic and Diluted	$	(0.02	)									$	(0.01	)
Weighted average number of shares
Basic and Diluted		13,670,399					$	3,457,000			b,d		17,127,399

See notes to pro forma consolidated condensed financial statements.

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Data Storage Corporation

Proforma Consolidated Condensed Statement of Operations(Unaudited)

Year Ended December 31, 2009

(in thousands, except for per share data)	Data Storage			Safe Data			Pro forma Adjustments			Notes		Data Storage and Safe Data
Net sales	$	585,285		$	2,551,876		$	-				$	3,137,161
Cost of sales		459,803			1,434,499			-					1,894,302
Gross profit		125,482			1,117,377			-					1,242,859
Operating expenses		1,170,903			1,238,720			107,178			e		2,516,801
Operating income (loss)		(1,045,421	)		(121,343	)		(107,178	)				(1,273,942	)
Other income
Interest expense		4,986			126,658			365,881			f		497,525
Interest and other income		(192	)		(9,965	)		-					(10,157	)
Total other expense		4,794			116,693			365,881					487,368
Income (loss) before income tax provision		(1,050,215	)		(238,036	)		(473,059	)				(1,761,310	)
Income tax provision		-			-			-			g		-
Net income (loss)	$	(1,050,215	)	$	(238,036	)	$	(473,059	)			$	(1,761,310	)
Preferred Stock Dividend		50,000											50,000
Net Loss Available to Common   Shareholders	$	(1,100,215	)									$	(1,811,310	)
Loss per share
Basic and Diluted	$	(0.08	)				$					$	(0.11	)
Weighted Average Number of Shares
Basic and Diluted		12,944,647					$	3,457,000			b,d		16,401,647

See notes to pro forma consolidated condensed financial statements.

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Data Storage Corporation

Footnotes to Unaudited Pro Forma Consolidated Condensed Balance Sheet and Statement of Operations

(a) To adjust for assets and liabilities not acquired by Data Storage.

(b) To record the sale of 600,000 shares of Data Storage at $0.50 associated with the acquisition of SafeData LLC.

(c) To record the proceeds received from the issuance of $1,000,000 convertible debt, net of the value of the warrants and beneficial conversion feature recorded as a debt discount ($912,637), to be amortized to interest expense over the life of the debt.

(d) To record the acquisition of the net assets of safe data through the issuance of cash of $1,229,953 common stock of $850,000, contingent consideration of $779,437 and the allocation of the excess purchase price to intangible assets and goodwill.

(e) To reflect amortization expense of $26,795 and $107,178 for the three months ended March 31, 2010 and the year ended December 31, 2009 for definite lived intangible assets acquired which will be amortized over a period of 5 and 4 years which appropriately reflects the economic benefit of the intangible assets.

(f) To reverse interest expense of $10,063and $40,809 for the three months ended March 31, 2010 and the year ended December 31, 2009 on Safe Data, LLC to reflect the cancellation of the credit line which was paid off at acquisition date. To record $101,671 and $406,685 for the three months ended March 31, 2010 and the year ended December 31, 2009 to reflect interest expense associated with the issuance of convertible long term debt by Data Storage.

(g) On a consolidated proforma basis, the Company had a net loss of $226,373 for the three months ended March 31, 2010 and net loss of $1,761,310 for the year ended December 31, 2009. The Company has net operating loss carryforwards to offset any income taxes and thus no current provision or benefit for taxes has been recorded.

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