Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 14, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'Data Storage Corp | ' |
Entity Central Index Key | '0001419951 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 36,588,240 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets: | ' | ' |
Cash and cash equivalents | $125,004 | $87,675 |
Accounts receivable (less allowance for doubtful accounts of $15,000 in 2014 and $15,000 in 2013) | 276,731 | 258,567 |
Prepaid compensation | 2,070 | 9,052 |
Prepaid expenses and other current assets | 140,963 | 171,584 |
Total Current Assets | 544,768 | 526,878 |
Property and Equipment: | ' | ' |
Property and equipment | 3,889,799 | 3,859,528 |
Less-Accumulated depreciation | -3,076,834 | -2,728,547 |
Net Property and Equipment | 812,965 | 1,130,981 |
Other Assets: | ' | ' |
Goodwill | 2,201,828 | 2,201,828 |
Investment in joint venture - at equity | 20,595 | 0 |
Other assets | 4,410 | 3,608 |
Intangible assets, net | 494,140 | 658,769 |
Employee loan | 64,100 | 45,730 |
Total Other Assets | 2,785,073 | 2,909,935 |
Total Assets | 4,142,806 | 4,567,794 |
Current Liabilities: | ' | ' |
Accounts payable and accrued expenses | 1,003,724 | 984,866 |
Revolving credit facility | 100,292 | 100,292 |
Due to related party | 239,956 | 207,848 |
Dividend payable | 394,736 | 330,811 |
Deferred revenue | 523,045 | 703,941 |
Leases payable | 217,269 | 736,636 |
Loans payable | 0 | 47,312 |
Convertible debt - related parties net of discount | 700,000 | 186,215 |
Contingent collateral obligation | 0 | 356,204 |
Total Current Liabilities | 3,179,022 | 3,654,125 |
Deferred rental obligation | 435 | 5,187 |
Due to officer | 934,459 | 801,875 |
Leases payable long term | 625,338 | 86,180 |
Note payable - Enterprise Bank | 350,000 | ' |
Convertible debt - related parties | 0 | 500,000 |
Total Long Term Liabilities | 1,910,232 | 1,393,242 |
Total Liabilities | 5,089,254 | 5,047,367 |
Stockholders' Deficit: | ' | ' |
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 1,401,786 shares issued and outstanding in each period | 1,402 | 1,402 |
Common stock, par value $0.001; 250,000,000 shares authorized; 36,125,845 shares issued and outstanding in each period | 36,588 | 36,126 |
Additional paid in capital | 12,643,997 | 12,540,018 |
Accumulated deficit | -13,628,435 | -13,057,119 |
Total Stockholders' Deficit | -946,448 | -479,573 |
Total Liabilities and Stockholders' Deficit | $4,142,806 | $4,567,794 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts related to accounts receivable (in dollars) | $15,000 | $15,000 |
Preferred Stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 1,401,786 | 1,401,786 |
Preferred Stock, shares outstanding | 1,401,786 | 1,401,786 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 36,125,845 | 36,125,845 |
Common stock, shares outstanding | 36,125,845 | 36,125,845 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Sales | $1,014,129 | $1,119,032 | $3,066,263 | $3,465,574 |
Cost of sales | 535,392 | 591,159 | 1,681,658 | 1,968,939 |
Gross Profit | 478,737 | 527,873 | 1,384,605 | 1,496,635 |
Selling, general and administrative | 574,047 | 685,357 | 1,774,044 | 2,066,653 |
Loss from Operations | -95,310 | -157,484 | -389,439 | -570,018 |
Other Income (Expense) | ' | ' | ' | ' |
Interest income | 18 | 0 | 42 | 15 |
Interest expense | -62,333 | -39,962 | -138,589 | -104,572 |
Net gain (loss) in equity method investment | 1,057 | -15,209 | 20,595 | -17,452 |
Total Other (Expense) | -61,258 | -55,171 | -117,952 | -122,009 |
Loss Before Provision for Income Taxes | -156,568 | -212,655 | -507,391 | -692,027 |
Provision for income taxes | ' | 0 | ' | 0 |
Net Loss | -156,568 | -212,655 | -507,391 | -692,027 |
Preferred Stock Dividend | -22,215 | -12,500 | -63,925 | -37,500 |
Net Loss Available to Common Shareholders | ($178,783) | ($225,155) | ($571,316) | ($729,527) |
Loss per Share - Basic and Diluted (in dollars per share) | ($0.01) | ($0.01) | ($0.01) | ($0.01) |
Weighted Average Number of Shares - Basic and Diluted (in shares) | 36,135,897 | 33,165,915 | 36,129,220 | 33,165,915 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows from Operating Activities: | ' | ' |
Net loss | ($507,391) | ($692,027) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 512,916 | 613,834 |
Amortization of debt discount | 13,785 | 12,992 |
Non -cash interest expense | 56,877 | 41,589 |
Deferred compensation | 6,982 | 4,390 |
Net (gain) loss attributable to joint venture | -20,595 | 17,542 |
Allowance for doubtful accounts | 0 | -11,801 |
Stock - based compensation | 104,441 | 169,986 |
Changes in Assets and Liabilities: | ' | ' |
Accounts receivable | -18,164 | -55,490 |
Other assets | -802 | 1,948 |
Prepaid expenses and other current assets | 30,621 | 118,592 |
Employee loan | -18,370 | -20,300 |
Accounts payable and accrued expenses | -38,019 | 14,591 |
Deferred revenue | -180,896 | -65,866 |
Deferred rent | -4,752 | -6,623 |
Net Cash (Used in) Provided by Operating Activities | -63,367 | 178,103 |
Cash Flows from Investing Activities: | ' | ' |
Capital expenditures | 0 | -179,048 |
Investment in joint venture | 0 | -21,300 |
Net Cash Used in Investing Activities | 0 | -200,348 |
Cash Flows from Financing Activities: | ' | ' |
Issuance of convertible debt | 0 | 200,000 |
Repayments of capital lease obligations | -57,792 | -198,472 |
Repayment of contingent consideration | -6,204 | -7,762 |
Due to related party | 32,108 | 34,836 |
Advances from officer | 132,584 | 17,331 |
Net Cash Provided by Financing Activities | 100,696 | 11,097 |
Increase (Decrease) in Cash and Cash Equivalents | 37,329 | -11,148 |
Cash and Cash Equivalents, Beginning of Period | 87,675 | 72,756 |
Cash and Cash Equivalents, End of Period | 125,004 | 61,608 |
Cash paid for interest | 40,865 | 10,597 |
Cash paid for income taxes | 0 | 0 |
Non cash investing and financing activities: | ' | ' |
Accrual of preferred stock dividend | 63,295 | 37,500 |
Warrants issued with convertible debt | 0 | 35,702 |
Acquisition of equipment under capital lease | 30,271 | 0 |
Cashless exercise of stock options | $462 | $0 |
Basis_of_Presentation_Organiza
Basis of Presentation, Organization and Other Matters | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of presentation, organization and other matters | ' |
Note 1 - Basis of Presentation, Organization and Other Matters | |
Headquartered in Garden City, N.Y., Data Storage Corporation (“DSC” or the “Company”) offers its solutions to businesses within the healthcare, banking and finance, distribution services, manufacturing, construction, education, and government industries. | |
DSC derives revenues from long term subscription services and professional services related to implementation of cloud based services providing businesses in the education, government and healthcare industries protection of critical data, as well as, compliance for the clients email . In 2009 revenues consisted primarily of offsite data backup, de-duplication, continuous data protection and Cloud Disaster Recovery solutions, protecting information for our clients. In 2010 DSC expanded its solutions based on the asset acquisition of SafeData. In 2012 DSC continued to assimilate organizations, expanded its technology as well as technical group and positioned the new organization for growth. In October 2012 DSC purchased the email archive and data analytics software and assets of Message Logic. DSC has equipment for cloud storage and cloud computing in our data centers in Illinois, Massachusetts, New Jersey, and New York. DSC delivers its solutions over highly reliable, redundant and secure fiber optic networks with separate and diverse routes to the Internet. The network and geographical diversity is important to clients seeking storage hosting and disaster recovery solutions, ensuring protection of data and continuity of business in the case of a network interruption. | |
Condensed Consolidated Financial Statements | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results of operations for the full year. The condensed consolidated balance sheet at December 31, 2013 was derived from audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The other information in these condensed consolidated financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise. These condensed consolidated financial statements, including notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and additional information as contained in our Annual Report on Form 10-K for the year ended December 31, 2013. | |
Liquidity | |
The financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. For the nine months ended September 30, 2014, the Company has generated revenues of $3,066,263 but has incurred a net loss attributed to common shareholders of $571,316. Its ability to continue as a going concern is dependent upon achieving sales growth, reduction of operation expenses and ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations. The Company has been funded by the Mr. Charles M. Piluso, the Company’s Chief Executive Officer (“CEO”) and largest shareholder since inception as well as several Directors. It is the intention of Mr. Piluso to continue to fund the Company on an as needed basis. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Note 2 - Summary of Significant Accounting Policies | |
Principles of Consolidation | |
The condensed consolidated financial statements include the accounts of the Company and its subsidiary, Data Storage Corporation, a Delaware Corporation. All significant inter-company transactions and balances have been eliminated in consolidation. | |
Equity Investments | |
Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method. The Company's share of its equity method investee’s earnings or losses are included in other income in the accompanying Condensed Consolidated Statements of Operations. | |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. | |
Estimated Fair Value of Financial Instruments | |
The Company's financial instruments include cash, accounts receivable, accounts payable, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2014 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments. The carrying values of certain of the Company’s notes payable and capital lease obligations approximate their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace. | |
Goodwill and Other Intangibles | |
In accordance with GAAP, the Company tests goodwill and other intangible assets for impairment on at least an annual basis. Goodwill impairment exists if the net book value of a reporting unit exceeds its estimated fair value. The impairment testing is performed in two steps: (i) the Company determines impairment by comparing the fair value of a reporting unit with its carrying value, and (ii) if there is an impairment, the Company measures the amount of impairment loss by comparing the implied fair value of goodwill with the carrying amount of that goodwill. To determine the fair value of these intangible assets, the Company uses many assumptions and estimates using a market participant approach that directly impact the results of the testing. In making these assumptions and estimates, the Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management. | |
In September 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2011-08, "Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment", to allow entities to use a qualitative approach to test goodwill for impairment. ASU 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. The Company adopted ASU 2011-08 in fiscal 2013 and thus performed a qualitative assessment. This adoption did not have a material impact on the Company's condensed consolidated financial statements. | |
Revenue Recognition | |
The Company’s revenues consist principally of cloud storage and cloud computing revenues, SaaS and IaaS. Storage revenues consist of monthly charges related to the storage of materials or data (generally on a per unit basis). Sales are generally recorded in the month the service is provided. For customers who are billed on an annual basis, deferred revenue is recorded and amortized over the life of the contract. Set up fees charged in connection with storage contracts are deferred and recognized on a straight line basis over the life of the contract. | |
Net Income (Loss) Per Common Share | |
In accordance with FASB ASC 260-10-5 Earnings Per Share, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) adjusted for income or loss that would result from the assumed conversion of potential common shares from contracts that may be settled in stock or cash by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The inclusion of the potential common shares to be issued have an anti-dilutive effect on diluted loss per share and therefore they are not included in the calculation. Potentially dilutive securities at September 30, 2014 include 5,065,147 options and 133,334 warrants. | |
Property_and_Equipment
Property and Equipment | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property and Equipment | ' | |||||||
Note 3 - Property and Equipment | ||||||||
Property and equipment, at cost, consist of the following: | ||||||||
September | ||||||||
30, | December 31, | |||||||
2014 | 2013 | |||||||
Storage equipment | $ | 2,205,243 | $ | 2,205,243 | ||||
Website and software | 622,667 | 622,667 | ||||||
Furniture and fixtures | 22,837 | 23,861 | ||||||
Computer hardware and software | 91,687 | 91,687 | ||||||
Data center equipment | 947,365 | 916,070 | ||||||
3,889,799 | 3,859,528 | |||||||
Less: Accumulated depreciation | 3,076,834 | 2,728,547 | ||||||
Net property and equipment | $ | 812,965 | $ | 1,130,981 | ||||
Depreciation expense for the nine months ended September 30, 2014 and 2013 was $348,287 and $430,091, respectively. Depreciation for the three months ended September 30, 2014 and 2013 was $115,394 and $ 155,673, respectively. | ||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||
Goodwill and Intangible Assets | ' | |||||||||
Note 4 - Goodwill and Intangible Assets | ||||||||||
Goodwill and intangible assets consisted of the following: | ||||||||||
Estimated | September 30, 2014 | |||||||||
life | Gross | Accumulated | ||||||||
in years | amount | Amortization | ||||||||
Goodwill | Indefinite | $ | 2,201,828 | - | ||||||
Intangible Assets | ||||||||||
Intangible assets not subject to amortization | ||||||||||
Trademarks | Indefinite | 294,268 | - | |||||||
Intangible assets subject to amortization | ||||||||||
Customer list | 15-May | 897,274 | 697,402 | |||||||
Non-compete agreements | 4 | 262,147 | 262,147 | |||||||
Total Intangible Assets | 1,453,689 | 959,549 | ||||||||
Total Goodwill and Intangible Assets | $ | 3,655,517 | $ | 959,549 | ||||||
Scheduled amortization over the next five years as follows: | ||||||||||
For The Twelve Months Ending September 30, | ||||||||||
2015 | $ | 136,049 | ||||||||
2016 | 30,635 | |||||||||
2017 | 30,635 | |||||||||
2018 | 2,553 | |||||||||
Total | $ | 199,872 | ||||||||
Amortization expense for the nine months ended September 30, 2014 and 2013 was $164,629 and $183,744 respectively. Amortization expense for the three months ended September 30, 2014 and 2013 was $44,864 and $61,248 respectively. | ||||||||||
Investment_in_At_Equity
Investment in At Equity | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Equity Method Investments and Joint Ventures [Abstract] | ' | ||||
Investment in At Equity | ' | ||||
Note 5 – Investment in At Equity | |||||
The Company has a 50% non-controlling ownership interest in Secure Infrastructure & Services, LLC providing infrastructure-as-a-Service (IaaS) for IBM iSeries and AIX v7 systems, Power HA services and network infrastructure hardware and services as needed to support the IaaS and PowerHA implementation and ongoing needs for customers and services sold under the Company. ASC 810 requires the Company to evaluate non-consolidated entities periodically and as circumstances change to determine if an implied controlling interest exists. During fiscal 2013, the Company evaluated this equity investment and concluded that this is a variable interest entity and the Company is not the primary beneficiary. Secure Infrastructure & Services, LLC's fiscal year end is December 31. | |||||
The following presents unaudited summary financial information for Secure Infrastructure & Services, LLC. Such summary financial information has been provided herein based upon the individual significance of this unconsolidated equity investment to the consolidated financial information of the Company. | |||||
September | |||||
30, | |||||
2014 | |||||
Current assets | $ | 371,033 | |||
Non-current assets | $ | 36,600 | |||
Current liabilities | $ | 369,204 | |||
Members' equity | $ | 38,429 | |||
The investment balance carried on the Company's balance sheet amounts to $20,595 as of September 30, 2014. | |||||
Nine | |||||
Months | |||||
Ended | |||||
September | |||||
30, | |||||
2014 | |||||
Net sales | $ | 719,791 | |||
Gross profit | $ | 249,537 | |||
Operating expenses | $ | 234,847 | |||
Net ordinary income | $ | 14,690 | |||
Other income | $ | 26,500 | |||
Net income | $ | 41,190 | |||
The Company's share of the net income from Secure Infrastructure & Services, LLC for the nine months ended September 30, 2014 was $20,595. | |||||
Capital_Lease_Obligations
Capital Lease Obligations | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Capital Lease Obligations [Abstract] | ' | ||||
Capital lease obligations | ' | ||||
Note 6 – Capital Lease Obligations | |||||
The Company entered into a new lease agreement with Systems Trading, Inc. on May 1, 2014 to refinance all outstanding leases into one capital lease. This lease obligation is payable to Systems Trading, Inc. with monthly installments of $21,826 from June 1, 2014 through May 1, 2018 .This lease is secured with the computer equipment and has been capitalized. Pursuant to Accounting Standards Codification (“ASC”) 470-50-40, Debt Modifications and Extinguishments-Derecognition, the Company determined that modification accounting applied to the refinancing. The new capital lease obligation has an effective interest rate of 7.22%. | |||||
Future minimum lease payments under the capital leases are as follows: | |||||
As of September 30, 2014 | $ | 938,527 | |||
Less amount representing interest | -95,920 | ||||
Total obligations under capital leases | 842,607 | ||||
Less current portion of obligations under capital leases | -217,269 | ||||
Long-term obligations under capital leases | $ | 625,338 | |||
Long-term obligations under capital leases at September 30, 2014 mature as follows: | |||||
For The Twelve Months Ending September 30, | |||||
2015 | $ | 217,269 | |||
2016 | 230,669 | ||||
2017 | 244,896 | ||||
2018 | 149,773 | ||||
$ | 842,607 | ||||
The assets held under the capital leases are included in property and equipment as follows: | |||||
Equipment | $ | 1,603,461 | |||
Less: accumulated depreciation | -1,102,388 | ||||
$ | 501,073 | ||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
Note 7 - Commitments and Contingencies | |||||
Revolving Credit Facility | |||||
On January 31, 2008 the Company entered into a revolving credit line with a bank. The credit facility provides for $100,000 at prime plus .5%, 3.75% at September 30, 2014, and is secured by all assets of the Company and personally guaranteed by the Company’s principal shareholder. As of September 30, 2014, the Company owed $100,292 under this agreement. | |||||
Contingent Collateral Obligation | |||||
In connection with the 2012 acquisition of Message Logic, LLC, the Company acquired software subject to a UCC filing in the amount of $350,000 plus accrued interest. The Company believes that it will pay this lien regardless of whether they are required to pay any of the contingent purchase price and accordingly the liability has been recorded on the Company’s balance sheet. On September 5, 2014, the Company entered into an agreement whereby the Company will make payments of all arrears of interest over 7 months at $3,910 per month. In addition, the Company has agreed to make monthly interest payments of $1,553 per month with the principal balance of $350,000 payable on April 30, 2016. Upon signing of this agreement the contingent collateral obligation became classified as a note payable as opposed to its original contingent collateral obligation on the condensed balance sheet. | |||||
Operating Leases | |||||
The Company currently leases office space in Garden City, NY, and Warwick, RI and data centers in Westbury, NY and Waltham, MA. | |||||
The Company leases a data center in Westbury, NY on a month to month basis. Monthly rent is $1,500, plus utilities and the lease is with the Chairman of the Company. | |||||
The Company leases space in a data center in Waltham, MA. The lease calls for monthly payments under an annually renewable contract for space and services. The payments are approximately $29,000 per month depending upon services used and the original contract terms were renewed to September 30, 2015. | |||||
The lease for office space in Garden City, NY calls for escalating monthly payments ranging from $6,056 to $6,617 plus a portion of the operating expenses through June 2014. This lease was renewed for an additional year through June 30, 2015 at the rate of $6,617 per month. | |||||
The Company leases space in a data center in Warwick, RI. This lease commenced on February 1, 2014 and continues through January 31, 2019. | |||||
Minimum obligations under these lease agreements are as follows: | |||||
For The Twelve Months Ending September 30, | |||||
2015 | $ | 27,888 | |||
2016 | 27,888 | ||||
2017 | 28,976 | ||||
2018 | 29,520 | ||||
Thereafter | 9,840 | ||||
$ | 124,112 | ||||
Rent expense for the nine months ended September 30, 2014 and September 30, 2013 was $91,641 and $113,732 respectively. Rent expense for the three months ended September 30, 2014 and September 30, 2013 was $34,177 and $40,661 respectively. | |||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 8 - Related Party Transactions | |
Due to related party represents rent accrued to a partnership controlled by Mr. Piluso for the New York Data Center. The rent expense for the data center is $1,500 per month plus electric service. | |
As of September 30, 2014 the Company owed Mr. Piluso $934,459. These advances bear no interest and have no stated terms of repayment. | |
Convertible_debt
Convertible debt | 9 Months Ended |
Sep. 30, 2014 | |
Convertible Debt [Abstract] | ' |
Convertible debt | ' |
Note 9 – Convertible debt | |
Related Party | |
On January 31, 2012 the Company entered into a $500,000 convertible promissory note with a director of the Company. The note is convertible into the Company’s common stock at $0.85 per share and carries interest at 10%. Interest is payable quarterly through the maturity date of January 31, 2015. DSC has accrued interest on this note totaling $133,287 and is in arrears on its interest payments. | |
On February 28, 2013 the Company entered into a $100,000 convertible promissory note with a director of the Company carries interest at 10%. Interest is payable quarterly through the maturity date of February 28, 2014. The Company issued 66,667 warrants valued at of $17,851 which was recorded as a discount to the convertible promissory note. The note is convertible into common stock at $0.15 per share. In 2014, the Company defaulted on this note and is subject to additional interest of 5% per annum as well as additional 10% warrants for each year in default. DSC has accrued interest on this note totaling $15,863. Subsequent to the original maturity date the note was extended through February 28, 2015. | |
On August 9, 2013, the Company entered into a $100,000 convertible promissory note with the CEO of the Company. The convertible promissory note is convertible at $0.15and carries interest at 10%. Interest is payable quarterly through the maturity date of April 30, 2014. The Company issued 66,667 warrants valued at $17,851 in connection with this agreement, which was recorded as a discount to the convertible promissory notes based on its relative fair value with an offset to additional paid in capital. In 2014, the Company defaulted on this note and is subject to additional interest of 5% per annum as well as the additional 10% warrants for each year in default. DSC has accrued interest on this note totaling $11,192. Subsequent to the original maturity date the note was extended through February 28, 2015. | |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Equity [Abstract] | ' | ||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||
Note 10 - Stockholders’ Equity | |||||||||||
On September 22, 2014 the Company issued 462,395 shares of its common stock under a cashless stock option exercise | |||||||||||
Capital Stock | |||||||||||
The Company has 260,000,000 shares of capital stock authorized, consisting of 250,000,000 shares of common stock, par value $0.001, 10,000,000 shares of Series A Preferred Stock, par value $0.001 per share. | |||||||||||
Common Stock Options | |||||||||||
2008 Equity Incentive Plan | |||||||||||
In October 2008, the Company’s board of directors (the “Board”) adopted, the 2008 Equity Incentive Plan (the “2008 Plan”). Under the 2008 Plan, we may grant options (including incentive stock options) to purchase our common stock or restricted stock awards to our employees, consultants or non-employee directors. The 2008 Plan is administered by the Board. Awards may be granted pursuant to the 2008 Plan for 10 years from the date the Board approved the 2008 Plan. Any grant under the 2008 Plan may be repriced, replaced or regranted at the discretion of the Board. From time to time, we may issue awards pursuant to the 2008 Plan. | |||||||||||
The material terms of options granted under the 2008 Plan (all of which have been nonqualified stock options) are consistent with the terms described in the footnotes to the "Outstanding Equity Awards at Fiscal Year-End December 31, 2011”, including 5 year graded vesting schedules and exercise prices equal to the fair market value of our common stock on the date of grant. Stock grants made under the 2008 Plan have not been subject to vesting requirements. The 2008 Plan was terminated with respect to the issuance of new awards as of February 3, 2012. There are 2,435,414 options outstanding under this plan as of September 30, 2014. | |||||||||||
2010 Incentive Award Plan | |||||||||||
The Company has reserved 2,000,000 shares of common stock for issuance under the terms of the Data Storage Corporation 2010 Incentive Award Plan (the “2010 Plan”). The 2010 Plan is intended to promote the interests of the Company by attracting and retaining exceptional employees, consultants, directors, officers and independent contractors (collectively referred to as the “Participants”), and enabling such Participants to participate in the long-term growth and financial success of the Company. Under the 2010 Plan, the Company may grant stock options, which are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended, non-qualified stock options, stock appreciation rights and restricted stock awards, which are restricted shares of common stock (collectively referred to as “Incentive Awards”). Incentive Awards may be granted pursuant to the 2010 Plan for 10 years from the Effective Date. From time to time, we may issue Incentive Awards pursuant to the 2010 Plan. Each of the awards will be evidenced by and issued under a written agreement. | |||||||||||
On April 23, 2012, the Board of Directors of the Company amended and restated the Data Storage Corporation 2010 Plan. The 2010 Plan, as amended and restated, has been renamed the “Amended and Restated Data Storage Corporation Incentive Award Plan”. The new plan provides for flexibility in vesting periods and includes a limit of $100,000 per employee per year for incentive stock options. | |||||||||||
There are 3,845,146 options outstanding under this plan as of September 30, 2014. | |||||||||||
There are 1,154,854 shares available for future grants under the plans. | |||||||||||
A summary of the Company's option activity and related information follows: | |||||||||||
Number | |||||||||||
of | Range of | Weighted | |||||||||
Shares | Option | Average | |||||||||
Under | Price | Exercise | |||||||||
Options | Per Share | Price | |||||||||
Options Outstanding at January 1, 2014 | 6,921,084 | $ | 0.02 - 0.85 | $ | 0.24 | ||||||
Options Granted | - | - | - | ||||||||
Options Exercised | 640,524 | - | - | ||||||||
Options Expired | - | - | - | ||||||||
Options Outstanding at September 30, 2014 | 6,280,560 | $ | 0.02 - 0.85 | $ | 0.27 | ||||||
Options Exercisable at September 30, 2014 | 5,054,147 | 0.02 - 0.85 | $ | 0.26 | |||||||
Share-based compensation expense for options totaling $111,423 and $174,375 was recognized in our results for the nine months ended September 30, 2014 and 2013, respectively is based on awards vested. Share-based compensation expense for options totaling $36,833 and $58,125 was recognized in our results for the three months ended September 30, 2014 and 2013, respectively is based on awards vested. | |||||||||||
The valuation methodology used to determine the fair value of the options issued during the year was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options. | |||||||||||
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the warrants and is calculated by using the average daily historical stock prices through the day preceding the grant date. | |||||||||||
Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s estimated volatility is an average of the historical volatility of peer entities whose stock prices were publicly available. The Company’s calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price. | |||||||||||
As of September 30, 2014, there was $171,886 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.7 years. | |||||||||||
Common Stock Warrants | |||||||||||
A summary of the Company's warrant activity and related information follows: | |||||||||||
Number of | Range of | Weighted | |||||||||
Shares | Warrants | Average | |||||||||
Under | Price Per | Exercise | |||||||||
Warrants | Share | Price | |||||||||
Warrants Outstanding at January 1, 2014 | 133,334 | $ | 0.01 - 0.02 | $ | 0.01 | ||||||
Warrants Granted | - | - | - | ||||||||
Warrants Exercised | - | - | - | ||||||||
Warrants Cancelled | - | - | - | ||||||||
Warrants Outstanding at September 30, 2014 | 133,334 | 0.01 - 0.02 | 0.01 | ||||||||
Warrants Exercisable at September 30, 2014 | 133,334 | 0.01 - 0.02 | 0.01 | ||||||||
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2014 | |
Litigation [Abstract] | ' |
Litigation | ' |
Note 11 - Litigation | |
The Company has been named as a defendant in a lawsuit filed in New York State Supreme Court, Nassau County, by Richard Rebetti, the Company's former Chief Operating Officer. In the lawsuit, Rebetti v. Data Storage Corp. and Charles M. Piluso, Rebetti asserts claims for unpaid wages in the amount of $67,392 plus statutory damages and counsel fees. The Company intends to vigorously defend against this action and believes that it has counterclaims against Rebetti, and intends to interpose same in the action. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The condensed consolidated financial statements include the accounts of the Company and its subsidiary, Data Storage Corporation, a Delaware Corporation. All significant inter-company transactions and balances have been eliminated in consolidation. | |
Equity Investments | ' |
Equity Investments | |
Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method. The Company's share of its equity method investee’s earnings or losses are included in other income in the accompanying Condensed Consolidated Statements of Operations. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. | |
Estimated Fair Value of Financial Instruments | ' |
Estimated Fair Value of Financial Instruments | |
The Company's financial instruments include cash, accounts receivable, accounts payable, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2014 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments. The carrying values of certain of the Company’s notes payable and capital lease obligations approximate their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace. | |
Goodwill and Other Intangibles | ' |
Goodwill and Other Intangibles | |
In accordance with GAAP, the Company tests goodwill and other intangible assets for impairment on at least an annual basis. Goodwill impairment exists if the net book value of a reporting unit exceeds its estimated fair value. The impairment testing is performed in two steps: (i) the Company determines impairment by comparing the fair value of a reporting unit with its carrying value, and (ii) if there is an impairment, the Company measures the amount of impairment loss by comparing the implied fair value of goodwill with the carrying amount of that goodwill. To determine the fair value of these intangible assets, the Company uses many assumptions and estimates using a market participant approach that directly impact the results of the testing. In making these assumptions and estimates, the Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management. | |
In September 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2011-08, "Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment", to allow entities to use a qualitative approach to test goodwill for impairment. ASU 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. The Company adopted ASU 2011-08 in fiscal 2013 and thus performed a qualitative assessment. This adoption did not have a material impact on the Company's condensed consolidated financial statements. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company’s revenues consist principally of cloud storage and cloud computing revenues, SaaS and IaaS. Storage revenues consist of monthly charges related to the storage of materials or data (generally on a per unit basis). Sales are generally recorded in the month the service is provided. For customers who are billed on an annual basis, deferred revenue is recorded and amortized over the life of the contract. Set up fees charged in connection with storage contracts are deferred and recognized on a straight line basis over the life of the contract. | |
Net Income (Loss) Per Common Share | ' |
Net Income (Loss) Per Common Share | |
In accordance with FASB ASC 260-10-5 Earnings Per Share, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) adjusted for income or loss that would result from the assumed conversion of potential common shares from contracts that may be settled in stock or cash by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The inclusion of the potential common shares to be issued have an anti-dilutive effect on diluted loss per share and therefore they are not included in the calculation. Potentially dilutive securities at September 30, 2014 include 5,065,147 options and 133,334 warrants. | |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Schedule of property and equipment | ' | |||||||
Property and equipment, at cost, consist of the following: | ||||||||
September | ||||||||
30, | December 31, | |||||||
2014 | 2013 | |||||||
Storage equipment | $ | 2,205,243 | $ | 2,205,243 | ||||
Website and software | 622,667 | 622,667 | ||||||
Furniture and fixtures | 22,837 | 23,861 | ||||||
Computer hardware and software | 91,687 | 91,687 | ||||||
Data center equipment | 947,365 | 916,070 | ||||||
3,889,799 | 3,859,528 | |||||||
Less: Accumulated depreciation | 3,076,834 | 2,728,547 | ||||||
Net property and equipment | $ | 812,965 | $ | 1,130,981 | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||
Schedule of goodwill and intangible assets | ' | |||||||||
Goodwill and intangible assets consisted of the following: | ||||||||||
Estimated | September 30, 2014 | |||||||||
life | Gross | Accumulated | ||||||||
in years | amount | Amortization | ||||||||
Goodwill | Indefinite | $ | 2,201,828 | - | ||||||
Intangible Assets | ||||||||||
Intangible assets not subject to amortization | ||||||||||
Trademarks | Indefinite | 294,268 | - | |||||||
Intangible assets subject to amortization | ||||||||||
Customer list | 15-May | 897,274 | 697,402 | |||||||
Non-compete agreements | 4 | 262,147 | 262,147 | |||||||
Total Intangible Assets | 1,453,689 | 959,549 | ||||||||
Total Goodwill and Intangible Assets | $ | 3,655,517 | $ | 959,549 | ||||||
Scheduled amortization over next five years | ' | |||||||||
Scheduled amortization over the next five years as follows: | ||||||||||
For The Twelve Months Ending September 30, | ||||||||||
2015 | $ | 136,049 | ||||||||
2016 | 30,635 | |||||||||
2017 | 30,635 | |||||||||
2018 | 2,553 | |||||||||
Total | $ | 199,872 | ||||||||
Investment_in_At_Equity_Tables
Investment in At Equity (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Equity Method Investments and Joint Ventures [Abstract] | ' | ||||
Summary of financial information of unconsolidated equity investment | ' | ||||
Such summary financial information has been provided herein based upon the individual significance of this unconsolidated equity investment to the consolidated financial information of the Company. | |||||
September | |||||
30, | |||||
2014 | |||||
Current assets | $ | 371,033 | |||
Non-current assets | $ | 36,600 | |||
Current liabilities | $ | 369,204 | |||
Members' equity | $ | 38,429 | |||
Summary of net income or loss of unconsolidated equity investment | ' | ||||
The investment balance carried on the Company's balance sheet amounts to $20,595 as of September 30, 2014. | |||||
Nine | |||||
Months | |||||
Ended | |||||
September | |||||
30, | |||||
2014 | |||||
Net sales | $ | 719,791 | |||
Gross profit | $ | 249,537 | |||
Operating expenses | $ | 234,847 | |||
Net ordinary income | $ | 14,690 | |||
Other income | $ | 26,500 | |||
Net income | $ | 41,190 | |||
Capital_Lease_Obligations_Tabl
Capital Lease Obligations (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Capital Lease Obligations [Abstract] | ' | ||||
Summary of future minimum lease payments under capital leases | ' | ||||
Future minimum lease payments under the capital leases are as follows: | |||||
As of September 30, 2014 | $ | 938,527 | |||
Less amount representing interest | -95,920 | ||||
Total obligations under capital leases | 842,607 | ||||
Less current portion of obligations under capital leases | -217,269 | ||||
Long-term obligations under capital leases | $ | 625,338 | |||
Summary of long-term obligation under capital leases | ' | ||||
Long-term obligations under capital leases at September 30, 2014 mature as follows: | |||||
For The Twelve Months Ending September 30, | |||||
2015 | $ | 217,269 | |||
2016 | 230,669 | ||||
2017 | 244,896 | ||||
2018 | 149,773 | ||||
$ | 842,607 | ||||
Summary of assets held under capital leases included in property and equipment | ' | ||||
The assets held under the capital leases are included in property and equipment as follows: | |||||
Equipment | $ | 1,603,461 | |||
Less: accumulated depreciation | -1,102,388 | ||||
$ | 501,073 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of minimum obligations under operating lease agreements | ' | ||||
Minimum obligations under these lease agreements are as follows: | |||||
For The Twelve Months Ending September 30, | |||||
2015 | $ | 27,888 | |||
2016 | 27,888 | ||||
2017 | 28,976 | ||||
2018 | 29,520 | ||||
Thereafter | 9,840 | ||||
$ | 124,112 | ||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Employee Stock Option [Member] | ' | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||
Summary of option/warrant activity | ' | ||||||||||
A summary of the Company's option activity and related information follows: | |||||||||||
Number | |||||||||||
of | Range of | Weighted | |||||||||
Shares | Option | Average | |||||||||
Under | Price | Exercise | |||||||||
Options | Per Share | Price | |||||||||
Options Outstanding at January 1, 2014 | 6,921,084 | $ | 0.02 - 0.85 | $ | 0.24 | ||||||
Options Granted | - | - | - | ||||||||
Options Exercised | 640,524 | - | - | ||||||||
Options Expired | - | - | - | ||||||||
Options Outstanding at September 30, 2014 | 6,280,560 | $ | 0.02 - 0.85 | $ | 0.27 | ||||||
Options Exercisable at September 30, 2014 | 5,054,147 | 0.02 - 0.85 | $ | 0.26 | |||||||
Warrant [Member] | ' | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||
Summary of option/warrant activity | ' | ||||||||||
A summary of the Company's warrant activity and related information follows: | |||||||||||
Number of | Range of | Weighted | |||||||||
Shares | Warrants | Average | |||||||||
Under | Price Per | Exercise | |||||||||
Warrants | Share | Price | |||||||||
Warrants Outstanding at January 1, 2014 | 133,334 | $ | 0.01 - 0.02 | $ | 0.01 | ||||||
Warrants Granted | - | - | - | ||||||||
Warrants Exercised | - | - | - | ||||||||
Warrants Cancelled | - | - | - | ||||||||
Warrants Outstanding at September 30, 2014 | 133,334 | 0.01 - 0.02 | 0.01 | ||||||||
Warrants Exercisable at September 30, 2014 | 133,334 | 0.01 - 0.02 | 0.01 | ||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Options [Member] | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Potentially dilutive securities | 5,065,147 |
Warrant [Member] | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Potentially dilutive securities | 133,334 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $3,889,799 | $3,859,528 |
Less - Accumulated depreciation | 3,076,834 | 2,728,547 |
Net Property and Equipment | 812,965 | 1,130,981 |
Storage equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 2,205,243 | 2,205,243 |
Web site And Software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 622,667 | 622,667 |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 22,837 | 23,861 |
Computer Hardware And Software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 91,687 | 91,687 |
Data Center Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $947,365 | $916,070 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Depreciation expense | $115,394 | $155,673 | $348,287 | $430,091 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Goodwill and Intangible Assets [Line Items] | ' |
Goodwill, Gross amount | $2,201,828 |
Goodwill, Accumulated Amortization | 0 |
Intangible assets not subject to amortization | ' |
Trademarks, Gross amount | 294,268 |
Trademarks, Accumulated Amortization | 0 |
Intangible assets subject to amortization | ' |
Customer list, Gross amount | 897,274 |
Customer lists, Accumulated Amortization | 697,402 |
Non-compete agreements, Gross amount | 262,147 |
Non Compete Agreements Accumulated Amortization | 262,147 |
Total Intangible Assets, Gross amount | 1,453,689 |
Total Intangible Assets, Accumulated Amortization | 959,549 |
Total Goodwill and Intangible Assets, Gross amount | 3,655,517 |
Total Goodwill and Intangible Assets, Accumulated Amortization | $959,549 |
Goodwill, Estimated life in Years | 'Indefinite |
Trademarks, Estimated life in Years | 'Indefinite |
Customer Lists [Member] | Maximum [Member] | ' |
Intangible assets subject to amortization | ' |
Intangible assets subject to amortization, Estimated life in Years | '15 years |
Customer Lists [Member] | Minimum [Member] | ' |
Intangible assets subject to amortization | ' |
Intangible assets subject to amortization, Estimated life in Years | '5 years |
Noncompete Agreements [Member] | ' |
Intangible assets subject to amortization | ' |
Intangible assets subject to amortization, Estimated life in Years | '4 years |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 1) (USD $) | Sep. 30, 2014 |
Goodwill and Intangible Assets [Line Items] | ' |
2015 | $136,049 |
2016 | 30,635 |
2017 | 30,635 |
2018 | 2,553 |
Total | $199,872 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill and Intangible Assets [Line Items] | ' | ' | ' | ' |
Amortization expense | $44,864 | $61,248 | $164,629 | $183,744 |
Investment_in_At_Equity_Detail
Investment in At Equity (Details) (Secure Infrastructure And Services LLC [Member], USD $) | Sep. 30, 2014 |
Secure Infrastructure And Services LLC [Member] | ' |
Schedule of Equity Method Investments [Line Items] | ' |
Current assets | $371,033 |
Non-current assets | 36,600 |
Current liabilities | 369,204 |
Members' equity | $38,429 |
Investment_in_At_Equity_Detail1
Investment in At Equity (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Net income | $1,057 | ($15,209) | $20,595 | ($17,452) |
Secure Infrastructure And Services LLC [Member] | ' | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Net sales | ' | ' | 719,791 | ' |
Gross profit | ' | ' | 249,537 | ' |
Operating expenses | ' | ' | 234,847 | ' |
Net ordinary income | ' | ' | 14,690 | ' |
Other income | ' | ' | 26,500 | ' |
Net income | ' | ' | $41,190 | ' |
Investment_in_At_Equity_Detail2
Investment in At Equity (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Non-controlling ownership interest | 50.00% | ' | 50.00% | ' |
Investment carried amount to balance sheet | $20,595 | ' | $20,595 | ' |
Net (Gain) in equity method investment | 1,057 | -15,209 | 20,595 | -17,452 |
Secure Infrastructure And Services LLC [Member] | ' | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Net (Gain) in equity method investment | ' | ' | $41,190 | ' |
Capital_Lease_Obligations_Deta
Capital Lease Obligations (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Capital Lease Obligations [Line Items] | ' | ' |
As of September 30, 2014 | $938,527 | ' |
Less amount representing interest | -95,920 | ' |
Total obligations under capital leases | 842,607 | ' |
Less current portion of obligations under capital leases | -217,269 | -736,636 |
Long-term obligations under capital leases | $625,338 | $86,180 |
Capital_Lease_Obligations_Deta1
Capital Lease Obligations (Details 1) (USD $) | Sep. 30, 2014 |
Capital Lease Obligations [Line Items] | ' |
2015 | $217,269 |
2016 | 230,669 |
2017 | 244,896 |
2018 | 149,773 |
Total obligations under capital leases | $842,607 |
Capital_Lease_Obligations_Deta2
Capital Lease Obligations (Details 2) (USD $) | Sep. 30, 2014 |
Capital Lease Obligations [Line Items] | ' |
Equipment | $1,603,461 |
Less: accumulated depreciation | -1,102,388 |
Total | $501,073 |
Capital_Lease_Obligations_Deta3
Capital Lease Obligations (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Capital Lease Obligations [Line Items] | ' |
Capital lease combined monthly installments payable to Systems Trading, Inc. and IBM | $21,826 |
Description of related party leasing monthly installment | 'June 1, 2014 through May 1, 2018 |
Description of related party leasing arrangements | 'on May 1, 2014 |
Debt Instrument, Interest Rate During Period | 7.22% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2014 |
Commitments and Contingencies [Line Items] | ' |
2015 | $27,888 |
2016 | 27,888 |
2017 | 28,976 |
2018 | 29,520 |
Thereafter | 9,840 |
Total | $124,112 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Jan. 31, 2008 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jan. 31, 2008 | Sep. 30, 2014 | Jan. 31, 2008 | Sep. 30, 2014 | |
Subsequent Event [Member] | Chairman [Member] | Operating Lease One [Member] | Operating Lease One [Member] | Operating Lease Two [Member] | Operating Lease Two [Member] | Waltham, MA [Member] | Maximum [Member] | Maximum [Member] | Minimum [Member] | Minimum [Member] | |||
Garden City [Member] | Garden City [Member] | ||||||||||||
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Rate On Debt Under Revolving Credit Facility Excluding Prime Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.75% | ' | 0.50% | ' |
Total debt amount available under revolving credit facility | ' | $100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rent expenses per month | 6,617 | ' | ' | 1,500 | ' | ' | ' | ' | 29,000 | ' | 6,617 | ' | 6,056 |
Accured Interest | 350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total debt amount available under revolving credit facility | 100,292 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent Collateral Obligation Payment Peirod | '7 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent Collateral Obligation Monthly Interest Payable | 3,910 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent Collateral Obligation Principal Balance | ' | ' | 1,553 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collateral Obligation Collateral Amount | 350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease Expiration Date | 30-Jun-15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | 6,617 | ' | ' | 1,500 | ' | ' | ' | ' | 29,000 | ' | 6,617 | ' | 6,056 |
Operating Leases, Rent Expense, Net | ' | ' | ' | ' | $91,641 | $113,732 | $34,177 | $40,661 | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ' | ' |
Operating Leases, Rent Expense | $6,617 | ' |
Due to Related Parties, Noncurrent | 934,459 | 801,875 |
Charles M. Piluso, Cliff Stein, John Coghlan and Jan Burman and their affiliates [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to Related Parties, Noncurrent | 934,459 | ' |
Mr. Piluso [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Operating Leases, Rent Expense | $1,500 | ' |
Convertible_debt_Details_Textu
Convertible debt (Details Textual) (USD $) | 9 Months Ended | 0 Months Ended | 1 Months Ended | |
Sep. 30, 2014 | Aug. 09, 2013 | Feb. 28, 2013 | Jan. 31, 2012 | |
Chief Executive Officer [Member] | Director [Member] | Director [Member] | ||
Convertible Debt [Line Items] | ' | ' | ' | ' |
Convertible promissory note | ' | $100,000 | $100,000 | $500,000 |
Conversion price | ' | $0.15 | $0.15 | $0.85 |
Interest rate on note | ' | 10.00% | 10.00% | 10.00% |
Note maturity date | ' | 30-Apr-14 | 28-Feb-14 | 31-Jan-15 |
Note maturity date, description | ' | 'maturity date the note was extended through February 28, 2015 | 'maturity date the note was extended through February 28, 2015 | ' |
Warrants issued | ' | 66,667 | 66,667 | ' |
Warrants value recorded as a discount | ' | 17,851 | 17,851 | ' |
Addtional interest of warrant note | 10.00% | ' | 10.00% | ' |
Addtional interest of note | 5.00% | ' | 5.00% | ' |
Accrued interest on note | $11,192 | ' | ' | $133,287 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 9 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Options [Member] | Options [Member] | Options [Member] | Options [Member] | Options [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | |
Maximum [Member] | Maximum [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Minimum [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding Beginning Balance | 6,921,084 | ' | ' | ' | ' | 133,334 | ' | ' | ' | ' |
Granted | 0 | ' | ' | ' | ' | 0 | ' | ' | ' | ' |
Exercised | 640,524 | ' | ' | ' | ' | 0 | ' | ' | ' | ' |
Expired/Cancelled | 0 | ' | ' | ' | ' | 0 | ' | ' | ' | ' |
Outstanding Ending Balance | 6,280,560 | ' | ' | ' | ' | 133,334 | ' | ' | ' | ' |
Exercisable at September 30, 2014 | 5,054,147 | ' | ' | ' | ' | 133,334 | ' | ' | ' | ' |
Range price per share, outstanding, Beginning | ' | $0.85 | $0.85 | $0.02 | $0.02 | ' | $0.02 | $0.02 | $0.01 | $0.01 |
Range price per share, outstanding, Ending | ' | $0.85 | $0.85 | $0.02 | $0.02 | ' | $0.02 | $0.02 | $0.01 | $0.01 |
Range price per share, Exercisable | ' | $0.85 | ' | $0.02 | ' | ' | $0.02 | ' | $0.01 | ' |
Weighted Average Exercise Price Outstanding, Beginning | $0.24 | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' |
Weighted Average Exercise Price Outstanding, Granted | $0 | ' | ' | ' | ' | $0 | ' | ' | ' | ' |
Weighted Average Exercise Price Outstanding, Exercised | $0 | ' | ' | ' | ' | $0 | ' | ' | ' | ' |
Weighted Average Exercise Price Outstanding, Expired/Cancelled | $0 | ' | ' | ' | ' | $0 | ' | ' | ' | ' |
Weighted Average Exercise Price Outstanding, Ending | $0.27 | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' |
Weighted Average Exercise Price Outstanding, Exercisable at September 30, 2014 | $0.26 | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2010 | Apr. 23, 2012 | Oct. 31, 2008 | Sep. 30, 2014 | |
Two Thousand Ten Incentive Award Plan [Member] | Two Thousand Ten Incentive Award Plan [Member] | Amended And Restated DSC Incentive Award Plan [Member] | Two Thousand Eight Equity Incentive Plan [Member] | Two Thousand Eight Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum term of stock option from the date of grant | ' | ' | ' | ' | ' | '10 years | ' | ' | '10 years | ' |
Options outstanding | ' | ' | ' | ' | ' | 3,845,146 | ' | ' | ' | 2,435,414 |
Description of consistency of material terms of options granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Outstanding Equity Awards at Fiscal Year-End December 31, 2011, including 5 year graded vesting schedules and exercise prices equal to the fair market value of our common stock on the date of grant |
Reserved shares of common stock for issuance | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' |
Shares available for future grants | ' | ' | ' | ' | ' | 1,154,854 | ' | ' | ' | ' |
Amount of annual contribution per employee | ' | ' | ' | ' | ' | ' | ' | $100,000 | ' | ' |
Common stock, par value | $0.00 | ' | $0.00 | ' | $0.00 | ' | ' | ' | ' | ' |
Authorized capital stock, shares | 260,000,000 | ' | 260,000,000 | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 250,000,000 | ' | 250,000,000 | ' | 250,000,000 | ' | ' | ' | ' | ' |
Series A, preferred stock, shares authorized | 10,000,000 | ' | 10,000,000 | ' | 10,000,000 | ' | ' | ' | ' | ' |
Series A, preferred stock, par value | $0.00 | ' | $0.00 | ' | $0.00 | ' | ' | ' | ' | ' |
Total unrecognized compensation expense | 171,886 | ' | 171,886 | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense for options | $36,833 | $58,125 | $111,423 | $174,375 | ' | ' | ' | ' | ' | ' |
Weighted average period expected to recognized compensation expense (in years) | ' | ' | '1 year 8 months 12 days | ' | ' | ' | ' | ' | ' | ' |
Cashless Exercise Of Stock Options Shares | ' | ' | 462,395 | ' | ' | ' | ' | ' | ' | ' |
Litigation_Details_Textual
Litigation (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Litigation [Line Items] | ' |
Unpaid Wages | $67,392 |