Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Document And Entity Information | |
Entity Registrant Name | Data Storage Corp |
Entity Central Index Key | 1,419,951 |
Document Type | 10-Q |
Trading Symbol | DTST |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity a Well-known Seasoned Issuer | No |
Entity a Voluntary Filer | No |
Entity's Reporting Status Current | Yes |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 128,139,418 |
Document Fiscal Period Focus | Q3 |
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 156,305 | $ 255,817 |
Accounts receivable (less allowance for doubtful accounts of $90,000 in 2017 and $90,000 in 2016) | 582,086 | 807,515 |
Prepaid expenses and other current assets | 160,646 | 231,432 |
Total Current Assets | 899,037 | 1,294,764 |
Property and Equipment: | ||
Property and equipment | 5,226,246 | 3,401,251 |
Less-Accumulated depreciation | (3,516,008) | (3,222,591) |
Net Property and Equipment | 1,710,238 | 178,660 |
Other Assets: | ||
Goodwill | 3,985,700 | 3,985,700 |
Other assets | 57,367 | 54,504 |
Intangible assets, net | 303,766 | 329,242 |
Total Other Assets | 4,346,833 | 4,369,446 |
Total Assets | 6,956,108 | 5,842,870 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 996,717 | 1,219,247 |
Revolving credit facility | 50,412 | |
Accounts payable from acquisition | 374,762 | |
Dividend payable | 705,912 | 619,138 |
Deferred revenue | 695,672 | 919,103 |
Leases payable - related party | 658,307 | 254,078 |
Note payable - bank | 350,000 | 350,000 |
Total Current Liabilities | 3,406,608 | 3,786,740 |
Deferred rental obligation | 1,305 | 1,904 |
Note Payable - related party | 328,265 | 190,000 |
Leases payable long-term - related party | 1,135,089 | 133,825 |
Total Long-Term Liabilities | 1,464,659 | 325,729 |
Total Liabilities | 4,871,267 | 4,112,469 |
Stockholders' Deficit: | ||
Preferred Stock, $.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; 128,139,418 and 128,039,418 shares issued and outstanding in 2017 and 2016, respectively | 128,139 | 128,039 |
Additional paid in capital | 17,203,590 | 17,194,383 |
Accumulated deficit | (15,248,290) | (15,593,423) |
Total Stockholders' (Deficit) Equity | 2,084,841 | 1,730,401 |
Total Liabilities and Stockholders' (Deficit) | $ 6,956,108 | $ 5,842,870 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts related to accounts receivable | $ 90,000 | $ 90,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 1,401,786 | 1,401,786 |
Preferred stock, outstanding | 1,401,786 | 1,401,786 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 128,139,418 | 128,039,418 |
Common stock, outstanding | 128,139,418 | 128,039,418 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Sales | $ 2,036,299 | $ 922,919 | $ 6,387,499 | $ 2,912,153 |
Cost of sales | 1,226,430 | 646,364 | 3,766,448 | 1,930,788 |
Gross Profit | 809,869 | 276,555 | 2,621,051 | 981,365 |
Selling, general and administrative | 741,503 | 389,684 | 2,090,706 | 1,285,145 |
Income (Loss) from Operations | 68,366 | (113,129) | 530,345 | (303,780) |
Other Income (Expense) | ||||
Interest income | 2 | 34 | ||
Miscellaneous | 636 | |||
Interest expense | (34,748) | (70,231) | (100,650) | (204,467) |
Bad Debt Recovery | 1,542 | 1,508 | ||
Net gain (loss) on equity method investment | (2,362) | (2,572) | ||
Total Other Income (Expense) | (34,746) | (72,593) | (98,438) | (205,531) |
Income (loss) before provision for income taxes | 33,620 | (185,722) | 431,907 | (509,311) |
Provision for income taxes | ||||
Net Income (loss) | 33,620 | (185,722) | 431,907 | (509,311) |
Preferred Stock Dividends | (29,648) | (26,838) | (86,774) | (78,550) |
Net Income (loss) Attributable to Common Stockholders | $ 3,972 | $ (212,560) | $ 345,133 | $ (587,861) |
Income (loss) per Share - Basic and Diluted (in dollars per share) | $ 0 | $ (0.01) | $ 0 | $ (0.01) |
Weighted Average Number of Shares - Basic (in shares) | 128,139,418 | 36,588,240 | 128,077,148 | 36,588,240 |
Weighted Average Number of Shares - Diluted (in shares) | 128,272,752 | 36,588,240 | 128,210,482 | 36,588,240 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net Income (loss) | $ 431,907 | $ (509,311) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 318,893 | 157,071 |
Write off employee loan | 85,800 | |
Net (gain) loss on equity method investment | 2,572 | |
Non-cash interest expense | 174,851 | |
Stock based compensation | 9,307 | 36,420 |
Changes in Assets and Liabilities: | ||
Accounts receivable | 225,429 | 14,986 |
Other assets | 2,136 | (9,096) |
Prepaid expenses and other current assets | 65,787 | (43,965) |
Employee Loan | ||
Accounts payable and accrued expenses | (267,472) | 392,816 |
Deferred revenue | (223,431) | (94,057) |
Deferred rent | (599) | 490 |
Net Cash Provided by Operating Activities | 561,957 | 208,577 |
Cash Flows from Financing Activities: | ||
Issuance of Convertible Debt | 10,000 | |
Repayment of loan obligations | (428,873) | |
Repayments of capital lease obligations | (232,596) | (180,151) |
Net Cash Used in Financing Activities | (661,469) | (170,151) |
Increase (Decrease) in Cash and Cash Equivalents | (99,512) | 38,426 |
Cash and Cash Equivalents, Beginning of Period | 255,817 | 67,045 |
Cash and Cash Equivalents, End of Period | 156,305 | 105,471 |
Supplemental Disclosures: | ||
Cash paid for interest | 100,650 | 29,615 |
Cash paid for income taxes | ||
Non-cash investing and financing activities: | ||
Accrual of preferred stock dividend | 86,774 | 78,550 |
Assets acquired by capital lease | $ 1,824,996 |
Basis of presentation, organiza
Basis of presentation, organization and other matters | 9 Months Ended |
Sep. 30, 2017 | |
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 Melville, NY, Data Storage Corporation (“DSC” or the “Company”) offers its solutions and services to businesses within the healthcare, banking and finance, distribution services, manufacturing, construction, education, and government sectors. The Company focuses on cyber security solutions, cloud solutions and compliance services. DSC provides Infrastructure as a Service, Disaster Recovery as a Service and Email Archival and Compliance Solutions. DSC’s mission: Protecting client data, ensuring business continuity, assisting in their compliance requirements and providing better control over their digital information. DSC maintains equipment for cloud storage and cloud computing in our data centers in New York State and Massachusetts. DSC delivers its solutions over highly reliable, redundant and secure fiber optic networks with separate and diverse routes to the Internet. DSC’s 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. 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, 2017, the Company has generated revenues of $6,387,499 and achieved a net income attributable to common shareholders of $345,133. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Stock Based Compensation The Company follows the requirements of FASB ASC 718-10-10, Share-Based Payments 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 is included in other income in the accompanying 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, and accounts payable, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2017 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. Cash, Cash Equivalents and Short-Term Investments The Company considers all highly liquid investments with an original maturity or remaining maturity at the time of purchase, of three months or less to be cash equivalents. Recently Issued and Newly Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2016, the FASB voted to delay the effective date of ASU 2014-09 by one year to the first quarter of 2018 to provide companies sufficient time to implement the standards. Early adoption will be permitted, but not before the first quarter of 2017. Adoption can occur using one of two prescribed transition methods. In March and April 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” and ASU 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing” which provide supplemental adoption guidance and clarification to ASC 2014-09. ASU 2016-08 and ASU 2016-10 must be adopted concurrently with the adoption of ASU 2014-09. On May 28, 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers, On August 2015, FASB issued Accounting Standards Update No. 2014-15, “Presentation of Financial Statements - Going Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity’s Ability to continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The Company adopted this ASU effective January 1, 2017. The adoption of ASU 2014-15 did not have a material impact on our financial position or results of operations. In April 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. This ASU is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those years. Adoption of ASU 2016-05 did not have a material impact on our financial position or results of operations. During February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”). The standard requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the new standard. In March 2016, FASB issued ASU No. 2016-09, “Improvements to Employee Share-based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the standard and the impact on its consolidated financial statements and footnote disclosures. In January 2017, FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other Simplifying the Accounting for Goodwill” (ASU 2017-04”), which requires goodwill impairment loss to be measured as the excess of a reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). The new guidance eliminates Step 2, which an entity used to measure goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. “In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination,” the ASU is effect for the company on January 1, 2020. The Company will adopt the standard on that date. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments”, which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim reporting periods beginning after December 15, 2017 and early adoption is permitted. ASU 2016-15 provides for retrospective application for all periods presented. The Company is assessing the impact of ASU 2016-15 and will adopt it when effective. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments and assets subjecting the Company to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable. The Company’s cash and cash equivalents are maintained at major U.S. financial institutions. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company’s customers are primarily concentrated in the United States. The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts on factors surrounding the credit risk of specific customers, historical trends, and other information. For the nine months ended September 30, 2017 and the nine months ended September 30, 2016 DSC did not have any customer concentrations. Accounts Receivable/Allowance for Doubtful Accounts Accounts receivables are due within 30 days. The allowance for doubtful accounts reflects the estimated accounts receivable that will not be collected due to credit losses and allowances. Provisions for estimated uncollectible accounts receivable are made for individual accounts based upon specific facts and circumstances including criteria such as their age, amount, and customer standing. Provisions are also made for other accounts receivable not specifically reviewed based upon historical experience. Clients are invoiced in advance for services as reflected in deferred revenue on the Company’s balance sheet. Property and Equipment Property and equipment is recorded at cost and depreciated over their estimated useful lives or the term of the lease using the straight-line method for financial statement purposes. Estimated useful lives in years for depreciation are 5 to 7 years for property and equipment. Additions, betterments and replacements are capitalized, while expenditures for repairs and maintenance are charged to operations when incurred. As units of property are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At September 30, 2017, the Company had a full valuation allowance against its deferred tax assets. Per FASB ASC 740-10, disclosure is not required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not possibility that the outcome will be unfavorable. Using this guidance, as of September 30, 2017 and September 30, 2016, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company’s 2015, 2013 and 2012 Federal and State tax returns remain subject to examination by their respective taxing authorities. Neither of the Company’s Federal or State tax returns are currently under examination. 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. 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. Our revenue is also derived from equipment sales for cyber security, storage and managed service solutions. Revenue for equipment sales is recognized when persuasive evidence that an arrangement exists, installation has occurred, selling price is fixed or determinable, and collection is reasonably assured. Impairment of Long-Lived Assets In accordance with FASB ASC 360-10-35, we review our long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying value exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred $119,574 and $106,865 for advertising costs for the years ended September 30, 2017 and 2016, respectively. 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, 2017 include 133,334 warrants. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 - Property and Equipment Property and equipment, at cost, consist of the following : September 30, 2017 December 31, 2016 Storage equipment $ 2,100,932 2,100,932 Website and software 533,418 533,418 Furniture and fixtures 14,037 14,037 Computer hardware and software 86,184 86,184 Data Center Equipment 2,491,675 666,680 5,226,246 3,401,251 Less: Accumulated depreciation 3,516,008 3,222,591 Net property and equipment $ 1,710,238 178,660 Depreciation expense for the nine months ended September 30, 2017 and 2016 was $293,417 and $134,095, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 4 - Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following : September 30,2017 Estimated Gross Accumulated Goodwill Indefinite $ 3,985,700 N/A Intangible Assets Intangible assets not subject to amortization Trademarks Indefinite 294,268 N/A Intangible assets subject to amortization Customer list 5 - 15 897,274 894,721 Non-compete agreements 3 - 4 272,147 265,202 Total Intangible Assets 1,463,689 1,159,923 Total Goodwill and Intangible Assets $ 5,449,389 $ 1,159,923 Scheduled amortization over the next three years as follows: For the Twelve Months ending September 30, 2018 5,886 2019 3,333 2020 278 Total $ 9,497 Amortization expense for the nine months ended September 30, 2017 and 2016 was $25,476 and $22,976, respectively. Goodwill is amortized on a straight-line basis. |
Capital Lease Obligations - Rel
Capital Lease Obligations - Related Party | 9 Months Ended |
Sep. 30, 2017 | |
Capital Lease Obligations [Abstract] | |
Capital Lease Obligations - Related PArty | Note 4 – Capital Lease Obligations – Related Party On May 1, 2014 the Company entered into a new lease agreement with Systems Trading, Inc. (“Systems Trading”), an entity 100% owned by DSC President and director, Harold J. Schwartz 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%. On July 10, 2016, the Company entered into a lease with Systems Trading. The lease is for $14,443, calls for monthly payments of $420 and expires on August 1, 2018. It carries an interest rate of 3%. On November 1, 2016, the Company added to the existing lease with Systems Trading. The lease addendum totaled $7,998, calls for monthly payments of $258 and expires on March 1, 2018. It carries no interest. On January 24, 2017, the Company entered into a lease with Systems Trading to refinance old leases referenced above and to add newly acquired data center equipment. The lease is for calls for monthly payments of $59,940 and expires on February 1, 2020. It carries an interest rate of 6%. On April 27, 2017, the Company entered into a lease with Systems Trading to add newly-acquired data center equipment. The lease is for calls for monthly payments of $2,300, and expires on May 1, 2020. It carries an interest rate of 4%. Future minimum lease payments under the capital leases are as follows: As of September 30,2017 $ 1,937,357 Less amount representing interest (143,961 ) Total obligations under capital leases 1,793,396 Less current portion of obligations under capital leases (658,307 ) Long-term obligations under capital leases $ 1,135,089 Long-term obligations under the capital leases at September 30, 2017 mature as follows: For the twelve months ending September 30, 2018 $ 746,880 2019 746,880 2020 443,597 $ 1,937,357 The assets held under the capital leases are included in property and equipment as follows: Equipment $ 3,194,988 Less: accumulated depreciation 1,333,018 $ 1,861,970 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5 - Commitments and Contingencies Operating Leases The Company currently leases two office spaces in Melville, NY, and one in Warwick, RI. The lease for office space in Melville, NY calls for monthly payments of $3,498 beginning July 1, 2016. This lease commenced on June 1, 2016 and continues through December 31, 2017. On July 20, 2017, the Company rented additional office space in Melville, NY and commences on August 1, 2017 and continues through December 31, 2017. This new lease for the additional office space calls for monthly payments of $1,464.00. A second location that was part of the acquisition is also located in Melville, calls for monthly payments of $8,382 with a lease terminating in August 31, 2019. The lease for office space in Warwick, RI calls for monthly payments of $2,324 beginning February 1, 2015 which escalates to $2,460 on February 1, 2017. This lease commenced on February 1, 2015 and continues through January 31, 2019. Minimum obligations under these lease agreements are as follows: For the Year Ending September 30, 2018 $ 131,113 2019 102,351 $ 233,464 Rent expense for the nine months ended September 30, 2017 and 2016 was $160,085 and $101,865, respectively. |
Acquisition of business
Acquisition of business | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisition of business | Note 6 - Acquisition of business The unaudited pro forma condensed combined financial statements presented below have been prepared in order to present combined results of operations of the Company, ABC Services, Inc. and ABC Services II, Inc. (collectively, “ABC”) as if the asset acquisition had occurred as of January 1, 2016. Nine-months ended Revenue 7,517,132 Income from operations 558,206 Net Income 459,955 Preferred dividends 80,530 Net Income attributable to common shareholders 379,425 Earnings per share 0.01 |
Note Payable - Related Party
Note Payable - Related Party | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Note Payable - Related Party | Note 7 - Note Payable – Related Party On January 24, 2017, the Company refinanced accounts payable acquired in the business acquisition on October 25, 2016 with a non-interest-bearing note to the Company’s President in consideration for a $247,020 loan. The repayment terms of the note are $10,292 for a term of 24 months commencing on February 1, 2017. |
Note Payable - Bank
Note Payable - Bank | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Note Payable - Bank | Note 8 – Note Payable – bank There has been no default notice from Enterprise Bank. Enterprise Bank has requested that we move from an interest only payment to a self-amortized arrangement. The Company is in the process of renegotiating a new payment plan. Interest only payments have been paid with the last monthly payment made in September 2017. The interest rate on this note was 5.32%. The Company is in current negotiations to either modify or extend this loan. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9 - Stockholders’ Equity During the nine months ended September 30, 2017, the Company granted 100,000 shares of its common stock to a CTO of the company for services performed. 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 Preferred Stock, par value $0.001 per share. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 – Subsequent Events The Company has entered into a new lease agreement with RXR Realty LLC to rent office space at 48 South Service Rd., Melville, New York to commence on February 1, 2018. The lease calls for monthly payments of $7,189 with a lease terminating May 31,2023. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Stock-Based Compensation | Stock Based Compensation The Company follows the requirements of FASB ASC 718-10-10, Share-Based Payments |
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 is included in other income in the accompanying 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, and accounts payable, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2017 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. |
Cash, Cash Equivalents and Short-Term Investments | Cash, Cash Equivalents and Short-Term Investments The Company considers all highly liquid investments with an original maturity or remaining maturity at the time of purchase, of three months or less to be cash equivalents. |
Recently Issued and Newly Adopted Accounting Pronouncements | Recently Issued and Newly Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2016, the FASB voted to delay the effective date of ASU 2014-09 by one year to the first quarter of 2018 to provide companies sufficient time to implement the standards. Early adoption will be permitted, but not before the first quarter of 2017. Adoption can occur using one of two prescribed transition methods. In March and April 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” and ASU 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing” which provide supplemental adoption guidance and clarification to ASC 2014-09. ASU 2016-08 and ASU 2016-10 must be adopted concurrently with the adoption of ASU 2014-09. On May 28, 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers, On August 2015, FASB issued Accounting Standards Update No. 2014-15, “Presentation of Financial Statements - Going Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity’s Ability to continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The Company adopted this ASU effective January 1, 2017. The adoption of ASU 2014-15 did not have a material impact on our financial position or results of operations. In April 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. This ASU is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those years. Adoption of ASU 2016-05 did not have a material impact on our financial position or results of operations. During February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”). The standard requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the new standard. In March 2016, FASB issued ASU No. 2016-09, “Improvements to Employee Share-based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the standard and the impact on its consolidated financial statements and footnote disclosures. In January 2017, FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other Simplifying the Accounting for Goodwill” (ASU 2017-04”), which requires goodwill impairment loss to be measured as the excess of a reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). The new guidance eliminates Step 2, which an entity used to measure goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. “In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination,” the ASU is effect for the company on January 1, 2020. The Company will adopt the standard on that date. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments”, which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim reporting periods beginning after December 15, 2017 and early adoption is permitted. ASU 2016-15 provides for retrospective application for all periods presented. The Company is assessing the impact of ASU 2016-15 and will adopt it when effective. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments and assets subjecting the Company to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable. The Company’s cash and cash equivalents are maintained at major U.S. financial institutions. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company’s customers are primarily concentrated in the United States. The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts on factors surrounding the credit risk of specific customers, historical trends, and other information. For the nine months ended September 30, 2017 and the nine months ended September 30, 2016 DSC did not have any customer concentrations. |
Accounts Receivable/Allowance for Doubtful Accounts | Accounts Receivable/Allowance for Doubtful Accounts Accounts receivables are due within 30 days. The allowance for doubtful accounts reflects the estimated accounts receivable that will not be collected due to credit losses and allowances. Provisions for estimated uncollectible accounts receivable are made for individual accounts based upon specific facts and circumstances including criteria such as their age, amount, and customer standing. Provisions are also made for other accounts receivable not specifically reviewed based upon historical experience. Clients are invoiced in advance for services as reflected in deferred revenue on the Company’s balance sheet. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost and depreciated over their estimated useful lives or the term of the lease using the straight-line method for financial statement purposes. Estimated useful lives in years for depreciation are 5 to 7 years for property and equipment. Additions, betterments and replacements are capitalized, while expenditures for repairs and maintenance are charged to operations when incurred. As units of property are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At September 30, 2017, the Company had a full valuation allowance against its deferred tax assets. Per FASB ASC 740-10, disclosure is not required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not possibility that the outcome will be unfavorable. Using this guidance, as of September 30, 2017 and September 30, 2016, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company’s 2015, 2013 and 2012 Federal and State tax returns remain subject to examination by their respective taxing authorities. Neither of the Company’s Federal or State tax returns are currently under examination. |
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. |
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. Our revenue is also derived from equipment sales for cyber security, storage and managed service solutions. Revenue for equipment sales is recognized when persuasive evidence that an arrangement exists, installation has occurred, selling price is fixed or determinable, and collection is reasonably assured. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with FASB ASC 360-10-35, we review our long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying value exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. |
Advertising Costs | Advertising Costs The Company expenses the costs associated with advertising as they are incurred. The Company incurred $119,574 and $106,865 for advertising costs for the years ended September 30, 2017 and 2016, respectively. |
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, 2017 include 133,334 warrants. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment, at cost, consist of the following : September 30, 2017 December 31, 2016 Storage equipment $ 2,100,932 2,100,932 Website and software 533,418 533,418 Furniture and fixtures 14,037 14,037 Computer hardware and software 86,184 86,184 Data Center Equipment 2,491,675 666,680 5,226,246 3,401,251 Less: Accumulated depreciation 3,516,008 3,222,591 Net property and equipment $ 1,710,238 178,660 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and intangible assets | Goodwill and intangible assets consisted of the following : September 30,2017 Estimated Gross Accumulated Goodwill Indefinite $ 3,985,700 N/A Intangible Assets Intangible assets not subject to amortization Trademarks Indefinite 294,268 N/A Intangible assets subject to amortization Customer list 5 - 15 897,274 894,721 Non-compete agreements 3 - 4 272,147 265,202 Total Intangible Assets 1,463,689 1,159,923 Total Goodwill and Intangible Assets $ 5,449,389 $ 1,159,923 |
Schedule of amortization over the next two years | Scheduled amortization over the next three years as follows: For the Twelve Months ending September 30, 2018 5,886 2019 3,333 2020 278 Total $ 9,497 |
Capital Lease Obligations - R20
Capital Lease Obligations - Related Party (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Capital Lease Obligations [Abstract] | |
Schedule of future minimum lease payments | Future minimum lease payments under the capital leases are as follows: As of September 30,2017 $ 1,937,357 Less amount representing interest (143,961 ) Total obligations under capital leases 1,793,396 Less current portion of obligations under capital leases (658,307 ) Long-term obligations under capital leases $ 1,135,089 |
Schedule of long-term obligations under capital leases | Long-term obligations under the capital leases at September 30, 2017 mature as follows: For the twelve months ending September 30, 2018 $ 746,880 2019 746,880 2020 443,597 $ 1,937,357 |
Schedule of assets held under the capital leases | The assets held under the capital leases are included in property and equipment as follows: Equipment $ 3,194,988 Less: accumulated depreciation 1,333,018 $ 1,861,970 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum obligations | Minimum obligations under these lease agreements are as follows: For the Year Ending September 30, 2018 $ 131,113 2019 102,351 $ 233,464 |
Acquisition of business (Tables
Acquisition of business (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of operational activities | The unaudited pro forma condensed combined financial statements presented below have been prepared in order to present combined results of operations of the Company, ABC Services, Inc. and ABC Services II, Inc. (collectively, “ABC”) as if the asset acquisition had occurred as of January 1, 2016. Nine-months ended Revenue 7,517,132 Income from operations 558,206 Net Income 459,955 Preferred dividends 80,530 Net Income attributable to common shareholders 379,425 Earnings per share 0.01 |
Basis of presentation, organi23
Basis of presentation, organization and other matters (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Revenues | $ 6,387,499 | |||
Net income attributable to common shareholders | $ 3,972 | $ (212,560) | $ 345,133 | $ (587,861) |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Accounts receivables due | 30 days | |
Advertising costs | $ 119,574 | $ 106,865 |
Warrant [Member] | ||
Potentially dilutive securities | $ 133,334 | |
Property And Equipment [Member] | Minimum [Member] | ||
Useful lives | P5Y | |
Property And Equipment [Member] | Maximum [Member] | ||
Useful lives | P7Y |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 5,226,246 | $ 3,401,251 |
Less: Accumulated depreciation | 3,516,008 | 3,222,591 |
Net property and equipment | 1,710,238 | 178,660 |
Storage Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 2,100,932 | 2,100,932 |
Website And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 533,418 | 533,418 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 14,037 | 14,037 |
Computer Hardware and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 86,184 | 86,184 |
Data Center Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 2,491,675 | $ 666,680 |
Property and Equipment (Detai26
Property and Equipment (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 293,417 | $ 134,095 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill and intangible assets [Abstract] | |
Goodwill, Gross Amount | $ 3,985,700 |
Goodwill, Accumulated Amortization | |
Intangible assets not subject to amortization | |
Trademarks, Gross Amount | 294,268 |
Trademarks, Accumulated Amortization | |
Intangible assets subject to amortization | |
Customer list, Gross Amount | 897,274 |
Customer lists, Accumulated Amortization | 894,721 |
Non-compete agreements, Gross Amount | 272,147 |
Non-compete agreements, Accumulated Amortization | 265,202 |
Total Intangible Assets, Gross Amount | 1,463,689 |
Total Intangible Assets, Accumulated Amortization | 1,159,923 |
Total Goodwill and Intangible Assets, Gross Amount | 5,449,389 |
Total Goodwill and Intangible Assets, Accumulated Amortization | $ 1,159,923 |
Goodwill, Estimated life in years | Indefinite |
Trademarks, Estimated life in years | Indefinite |
Non-compete Agreements [Member] | Minimum [Member] | |
Intangible assets subject to amortization | |
Intangible assets subject to amortization, Estimated life in years | 3 years |
Non-compete Agreements [Member] | Maximum [Member] | |
Intangible assets subject to amortization | |
Intangible assets subject to amortization, Estimated life in years | 4 years |
Customer Lists [Member] | Minimum [Member] | |
Intangible assets subject to amortization | |
Intangible assets subject to amortization, Estimated life in years | 5 years |
Customer Lists [Member] | Maximum [Member] | |
Intangible assets subject to amortization | |
Intangible assets subject to amortization, Estimated life in years | 15 years |
Goodwill and Intangible Asset28
Goodwill and Intangible Assets (Details 1) | Sep. 30, 2017USD ($) |
Scheduled amortization over next two years: | |
2,018 | $ 5,886 |
2,019 | 3,333 |
2,020 | 278 |
Total | $ 9,497 |
Goodwill and Intangible Asset29
Goodwill and Intangible Assets (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 25,476 | $ 22,976 |
Capital Lease Obligations - R30
Capital Lease Obligations - Related Party (Details) | Sep. 30, 2017USD ($) |
Summary of future minimum lease payments under the capital leases | |
As of September 30,2017 | $ 1,937,357 |
Less amount representing interest | (143,961) |
Total obligations under capital leases | 1,793,396 |
Less current portion of obligations under capital leases | (658,307) |
Long-term obligations under capital leases | $ 1,135,089 |
Capital Lease Obligations - R31
Capital Lease Obligations - Related Party (Details 1) | Sep. 30, 2017USD ($) |
Summary of obligations under capital leases | |
2,018 | $ 746,880 |
2,019 | 746,880 |
2,020 | 443,597 |
Total obligations under capital leases | $ 1,937,357 |
Capital Lease Obligations - R32
Capital Lease Obligations - Related Party (Details 2) | Sep. 30, 2017USD ($) |
Summary of assets held under capital leases included in property and equipment | |
Equipment | $ 3,194,988 |
Less: accumulated depreciation | 1,333,018 |
Total | $ 1,861,970 |
Capital Lease Obligations - R33
Capital Lease Obligations - Related Party (Details Narrative) - USD ($) | Apr. 27, 2017 | Jan. 24, 2017 | Nov. 01, 2016 | Jul. 10, 2016 | May 01, 2014 | Sep. 30, 2017 | Apr. 27, 2016 |
Capital lease obligation | $ 1,793,396 | ||||||
Systems Trading, Inc. [Member] | Computer Hardware and Software [Member] | |||||||
Capital lease obligation | $ 7,998 | $ 14,443 | |||||
Interest rates on capitalized leases | 6.00% | 3.00% | 7.22% | 4.00% | |||
Capital leases contingent monthly rental payments | $ 2,300 | $ 59,940 | $ 258 | $ 420 | $ 21,826 | ||
Description on capital lease obligation | On April 27, 2017, the Company entered into a lease with Systems Trading to add newly-acquired data center equipment. The lease is for calls for monthly payments of $2,300, and expires on May 1, 2020. It carries an interest rate of 4%. | On January 24, 2017, the Company entered into a lease with Systems Trading to refinance old leases referenced above and to add newly acquired data center equipment. The lease is for calls for monthly payments of $59,940 and expires on February 1, 2020. It carries an interest rate of 6%. | On July 10, 2016, the Company entered into a lease with Systems Trading. The lease is for $14,443, calls for monthly payments of $420 and expires on August 1, 2018. It carries an interest rate of 3%. | The Company entered into a new lease agreement with Systems Trading, Inc. (“Systems Trading”), an entity 100% owned by DSC President and director, Harold J. Schwartz to refinance all outstanding leases into one capital lease. This lease obligation is payable to Systems Trading, Inc. with monthly installments of $21,826 from June 1, 2014 through May 1, 2018. This lease is secured with the computer equipment and has been capitalized. |
Commitments and Contingencies34
Commitments and Contingencies (Details) | Sep. 30, 2017USD ($) |
Summary of minimum obligations under operating lease agreements | |
2,018 | $ 131,113 |
2,019 | 102,351 |
Total | $ 233,464 |
Commitments and Contingencies35
Commitments and Contingencies (Details Narrative) - USD ($) | Jul. 20, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Operating Leased Assets [Line Items] | |||
Operating leases, rent expense, net | $ 160,085 | $ 101,865 | |
Warwick, RI [Member] | |||
Operating Leased Assets [Line Items] | |||
Description of rental payment | The lease for office space in Warwick, RI calls for monthly payments of $2,324 beginning February 1, 2015 which escalates to $2,460 on February 1, 2017. This lease commenced on February 1, 2015 and continues through January 31, 2019. | ||
Lease expiration date | Jan. 31, 2019 | ||
Warwick, RI [Member] | Minimum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating leases, rent expense | $ 2,324 | ||
Warwick, RI [Member] | Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating leases, rent expense | $ 2,460 | ||
Melville [Member] | |||
Operating Leased Assets [Line Items] | |||
Description of rental payment | The Company rented additional office space in Melville, NY and commences on August 1, 2017 and continues through December 31, 2017. | The lease for office space in Melville, NY calls for monthly payments of $3,498 beginning July 1, 2016. This lease commenced on June 1, 2016 and continues through December 31, 2017. | |
Lease expiration date | Dec. 31, 2017 | Dec. 31, 2017 | |
Operating leases, rent expense | $ 1,464 | $ 3,498 | |
Melville [Member] | |||
Operating Leased Assets [Line Items] | |||
Description of rental payment | A second location that was part of the acquisition is also located in Melville, calls for monthly payments of $8,382 with a lease terminating in August 31, 2019. | ||
Lease expiration date | Aug. 31, 2019 | ||
Operating leases, rent expense | $ 8,382 |
Acquisition of business (Detail
Acquisition of business (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue | $ 2,036,299 | $ 922,919 | $ 6,387,499 | $ 2,912,153 |
Income from operations | 68,366 | (113,129) | 530,345 | (303,780) |
Net Income attributable to common shareholders | $ 33,620 | $ (185,722) | $ 431,907 | $ (509,311) |
Earnings per share (in dollars per share) | $ 0 | $ (0.01) | $ 0 | $ (0.01) |
Acquisition of ABC I & ABC II [Member] | ||||
Revenue | $ 7,517,132 | |||
Income from operations | 558,206 | |||
Net Income | 459,955 | |||
Preferred dividends | 80,530 | |||
Net Income attributable to common shareholders | $ 379,425 | |||
Earnings per share (in dollars per share) | $ 0.01 |
Note Payable - Related Party (D
Note Payable - Related Party (Details Narrative) - Non-Interest Bearing Note [Member] | Jan. 24, 2017USD ($) |
Repayments of note | $ 10,292 |
Repayments of note term | 24 months |
Mr. Charles M. Piluso [Member] | |
Face amount of loan | $ 247,020 |
Note Payable - bank (Details Na
Note Payable - bank (Details Narrative) | Sep. 30, 2017 |
Debt Disclosure [Abstract] | |
Debt interest rate | 5.32% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Capital stock authorized | 260,000,000 | |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Mr. Chuck Paolillo [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 100,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - RXR Realty LLC [Member] | Oct. 02, 2017USD ($) |
Subsequent Event [Line Items] | |
Monthly lease payament | $ 7,189 |
Lease termination date | May 31, 2023 |